SECRETS TO USE SMART CREDIT CARDS WHEN STUDYING IN THE USA
One of the cultural differences you may experience when studying in the US is the culture of using credit cards. According to USIS Education, opening a credit card is not a top priority for international students, but using the credit wisely will bring benefits in the long run - especially for you. plan to find a job or settle in the US after graduation.
Open credit card while studying abroad in USA: Is it really necessary?
International students in the US can open a checking account to pay for living and studying expenses. However, in the US, credit cards (Credit cards) are widely used as (if not superior to) cash, making opening a card almost an obvious choice. Without a credit card, you will have difficulty, even unable to do some things such as shopping online, renting a car, making a deposit ...
A Debit Card is a good option for those who cannot make a credit card or are not ready to open a credit card. But if you only use a debit card, you won't be able to take advantage of the security payment feature and the benefits and rewards that credit cards offer, as well as the opportunity to increase your credit score - something that almost every work Americans are trying to achieve. Without a good credit history, you can't afford to choose a mobile plan, rent a car, rent a car, or make the necessary loans. Although the length of time you spend studying in the United States can only last for a few years, using a valid credit card while you're staying in the United States will create a good credit history to easily carry out these activities, as well. such as facilitating a favorable US settlement in the future.
Some useful credit terms
American credit scores use many credit scoring systems such as Vantage Score, the most popular being FICO score to measure your creditworthiness when using money. Usually if you don't have a credit history for the last 6 months, you won't have an FICO score.
The annual percentage rate (APR): If you do not pay the entire amount borrowed from the bank to consume when the monthly payment is due, you must pay interest on that amount. To attract cardholders, you usually get interest free for about 6 months - the first 1 year of card opening. After that time, APR will increase to 15-30% per year.
Annual fee: Some credit cards charge an annual fee - a fixed annual fee that customers must pay to the bank to pay for credit card services.
Late payment fee: Fee payable if not paid in full and on time the minimum payment amount.
Bonus policy: Use your credit card responsibly and pay in full on time, not only without interest or late payment fees, but also enjoy many benefits such as cash back, Amazon Prime discounts, redeeming shopping points for services such as movie tickets, books and clothes, or airline tickets.
The secret to opening cards and building a good credit history
If you plan on settling in the United States or looking for a job in the United States after graduation, you should begin building your credit history as soon as possible. And one of the first things to do is to choose the right credit card. Sharing with USIS Education, American students instructed their experience in choosing a card: The important criteria when choosing a credit card is that there is no annual fee, the lowest payment fee and the lowest APR, plus the main Bonus book for cash back or exchange points. Other types of surcharges such as over-payment fees, foreign currency payment fees, card opening fees, etc. should also be explored, in order to compare credit card providers currently on the market.
In fact, banks will have different credit card opening conditions. If you already have a credit card from a bank in Vietnam or an American bank like Citi Bank or American Express, take it with you. Good credit history in Vietnam will make it easier for American banks to accept credit card requests in the US for you.
Another option is to register a secured credit card by depositing a security deposit into the bank, in return they will give you a credit card based on the amount you deposit. Another way is to register for a specific retailer's credit card, such as a Walmart Credit Card. Even just for shopping at that store, you'll enjoy member-only promotions, refunds, and other utilities while still building your credit history.
Once you have your card, it is very important to pay your monthly balance in full, as your payment history accounts for 35% of your FICO credit score. Using your card regularly and paying ALL outstanding loans will help avoid late payment fees and interest, as well as show you are responsible for paying in full and on time, thereby increasing your credit score. If you live in a shared apartment with many other international students, you can schedule automatic payments for fixed fees such as electricity, water and Internet so your bills are always paid on time.
In short, if you plan to live in the US for a long time or settle in the US, building a credit score is important. Just starting early, being patient, and spending responsibly, credit in the US gives you a lot of advantages. And most importantly, USIS Education expects you to choose a reputable bank with many preferential policies for students before opening the card.