If you’re new to the United States, odds are you don’t have enough of a credit history to be approved for most credit cards. But secured cards are designed specifically for people who haven’t used credit in the past, and applying for one is a good first step for immigrants looking to start using credit in their new country.
Secured cards work much like regular credit cards. The key difference is that these cards require a refundable security deposit — a sum of money that you give the card issuer to hold as a guarantee that you’ll pay your bill. The typical security deposit is a few hundred dollars; in most cases, your credit line will be equal to your deposit. So if you put down a $200 deposit for a secured card, most issuers will allow you to use up to $200 worth of credit. Each secured card has its own nuances, though, and it’s important to fully research a card before making your decision.
Here are NerdWallet’s picks for best credit cards for new immigrants:
No annual fee, low starting deposit: Capital One® Secured MasterCard®
The Capital One® Secured MasterCard® is a solid choice for new immigrants looking to start building credit without shelling out a lot of cash. New cardholders make a security deposit of $49, $99 or $200, depending on creditworthiness. You can pay your security deposit in increments, rather than all at once, which affords a fair amount of flexibility to those on tighter budgets.
For most secured cards, the credit line is equal to the initial security deposit. But the credit line on the Capital One® Secured MasterCard®, regardless of the deposit, starts at $200. If you deposit more than the minimum, you can get a higher credit limit. (The maximum is $3,000.) If you use your card responsibly, you may be able to get a credit line increase with no additional deposit.
A welcome feature for new credit users, the Capital One® Secured MasterCard® comes equipped with an intuitive credit-tracking tool. The tool gives cardmembers unlimited free access to their FICO credit score with a credit simulator that allows them to see how certain actions can affect their score. You’ll also receive an alert from TransUnion, a credit bureau, whenever your credit report changes.
Plus, the Capital One® Secured MasterCard® reports to all three major credit bureaus, so good credit behavior with this card will work to help improve your score. That comes with an annual fee of $0.
High credit limit: Wells Fargo Secured Visa Card
For those looking to extend their credit line beyond the low limits of most secured cards, the Wells Fargo Secured Visa Card allows cardholders to make a deposit (and have a credit line) of up to $10,000. As with most secured cards, this card’s limit is equal to the initial deposit. So however large a credit line you need, deposit that amount — as long as it’s at least $300, the deposit minimum.
The Wells Fargo Secured Visa Card is available to temporary U.S. residents, although upgrading to an unsecured card is restricted to U.S. citizens and permanent residents with a Social Security number. Payment activity on the Wells Fargo Secured Visa Card is shared with all three credit bureaus, TransUnion, Experian and Equifax.
Unlike the Capital One® Secured MasterCard®, this card’s annual fee is $25. But if you’re a bigger spender who would prefer to not be limited to the relatively small credit lines offered by most secured cards, the Wells Fargo Secured Visa Card just might be worth the cost.
Lower APR: Digital Federal Credit Union Visa Platinum Secured Credit Card
Credit card interest rates tend to be high, so it’s almost never advisable to carry a balance on a card from month to month. But if you do find yourself with a balance you can’t pay off all at once — even if only for a month or two out of the year — the relatively low APR on the Digital Federal Credit Union Visa Platinum Secured Credit Card could save you a large chunk of money.
The ongoing APR is 11.5% Variable . That’s costly, but it’s still considerably better than the APRs of most secured cards, which are typically in the high teens or even above 20%. Along with its low APR, this card comes with no fees or penalty rates for cash advances or balance transfers. And like the other cards here, it reports to the credit bureaus.
And though the card’s minimum deposit is a relatively high $500, its annual fee is $0. So if you can afford the upfront costs and think it’s possible you might hold a balance from time to time, the Digital Federal Credit Union Visa Platinum Secured Credit Card is a card worth considering.
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