cheri song
Dec 20, 2022
On making your first credit card, pt2
I've seen some advertisement for Tomo Credit floating around on this app. It's a new company that I am totally unfamiliar with though, so if somebody can dispense with me some experience dealing with them in the past, it'll be very appreciated! I always do welcome an opportunity to learn more about the mess of the system that is the American Credit Score system #creditscore
In the meantime though, I would like to continue my earlier post with some general tips and goals for your first credit card.
1. This might come off as a bit obvious, but you need a SSN or an ITIN. I believe even students on F1 visa can apply for an SSN, if they work 3-4 hours weekly at the school cafeteria or library. Even if it's a bother, it's worth getting an SSN for a lot of things in United States so definitely get it if it's an option!
2. Now before, it was actually kind of a thing for people to just sign up to random cards willy nilly for their welcome package, only to cancel it almost immediately once they got it, but due to Chase's new 5/24 rule that's no longer recommended.
What's 5/24 rule? Well, basically, if you've been approved for any five credit cards within the last 24 months, you are not going to be approved for any Chase Credit Card. This means that unless you are careful, you might miss out on huge, jackpot promotions and welcome offers they give out every so often. Besides, Chase Cards are generally top of the line when it comes to benefits, welcome offers, travel insurance, etc. I really wouldn't want you to miss all these things just because you got a credit card from, I dunnow, the Gap store for a 15 dollar discount or whatever. Speaking of which...
3. You are probably not getting a Chase or Amex card as your first card
This might just be from personal experience but I've literally never heard of anyone who got approved for a Chase card as their first credit card. Obviously I don't know the exact algorithm or requirement they have, but I think they need you to have a decently long transaction history with a credit card before they consider you as a candidate for approval. After a year of credit card usage with another credit card product, you should probably be able to qualify for Chase cards, and Amex cards after only a few months. And then all the mileage benefits and cheaper trips to other countries won't just be a pipe dream anymore!
4. Your first card is probably going to be a bank issued one, Discover Student Card, or a secured card
Probably the best option for your first credit card is to get it from your the major bank that your school or company that you work for deals with (Bank of America, Citi, Wells Fargo, what have you). Just get either the one geared towards students or the most basic option without annual fees. They might tell you 'you need a co-signer' or 'you need some credit history' or some such, but as long as you have a decent amount of cash on hand and in your account, you can probably negotiate out an approval with an agent as long as you 'promise' to make them your primary bank.
The credit card limit doesn't even need to be big. 500 dollar should be plenty enough as long as you refrain from making any big purchases with it.
If you don't like any of the options offered by your bank, you could consider a Discover Student Credit Card. I've never got one myself, but I've heard it's comparatively easy to obtain one than most other credit cards.
There's also Tomo Credit which I've heard is pretty easy to get, but it does things differently from other credit companies. If anyone knows more about how they work, I would really appreciate you telling me about it!
Finally, there are Secured Credit Cards, which is probably the most generic way to get your first credit card. As the name implies, you need to put down a security deposit with the issuing company for you to get a secured card approved for usage. There aren't actually that many major banks that offer secured cards as a product, I believe, but I've heard that local banks and credit unions offer them much more regularly. Of the major banks, I'd recommend using Citi Bank's secured card. It has no annual fees and you can sign up for it online, but it has no signup package last time I checked.
I hope this information helps someone in the future!
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