UPDATE Feb. 19, 2020: This article was originally published on March 29, 2018, and has been updated to reflect the latest features of the card.
When moving to the U.S. for work, professionals from other countries often struggle to find financial products that they qualify for, especially when it comes to credit cards.
That’s because regardless of the income they’ll earn here or the financial health of the company they’re joining, they’ll still lack a U.S. credit history and likely also a Social Security number — both of which are typically required by many traditional U.S. card issuers.
CreditStacks hopes to help solve this problem with a credit card that doesn’t rely on traditional credit factors to vet applicants. The card doesn’t earn rewards, but it saves cardholders money on fees while helping them build a credit history in the U.S.
The basics of CreditStacks
CreditStacks started shipping credit cards to qualified customers in January 2018. The card is designed specifically for working professionals who are new to the U.S., which CEO Elnor Rozenrot says is a market that needs assistance. Previously, there was a waiting list to apply, but as of December 2019, anyone can apply for the CreditStacks Mastercard through the company’s website.
CreditStacks doesn’t rely on traditional factors like credit history or Social Security numbers to vet applicants.
“When I came to the U.S., I couldn’t get a credit card, and it just drove me nuts,” said Rozenrot, who is from Israel. “I walked into a bank on my second day in the U.S., and they opened a bank account for me, but wouldn’t give me a credit card. Six months later, I got a card that only had a $300 credit line. I knew I wasn’t the only one, so I joined up with two other immigrants that had the same issue, and with a veteran U.S. banker, and we decided to figure out how to solve this problem once and for all.”
Here’s a look at the card’s baseline benefits:
- No annual fee
- No security deposit
- A credit limit of up to $5,000
- An APR of 16.99% variable (as of February 2020)
- No penalty APR
- No foreign transaction fee
- Reporting to the Equifax credit bureau. (In November 2019, CreditStacks said it would eventually report to all three major bureaus, including Experian and TransUnion.)
- Travel benefits, including a collision damage waiver for rental cars, insurance for lost or damaged luggage, travel accident insurance and trip cancellation/interruption reimbursement
- Safety benefits and other perks, including MasterCard ID Theft Protection, extended warranty and price protection
What makes CreditStacks different
CreditStacks offers some features that can be difficult to find elsewhere, including:
- No Social Security number required, with some exceptions. Although applicants will have to report their Social Security number to CreditStacks within 60 days of activating their card, it’s not required upfront. Instead, applicants will need to provide their passport, visa information and proof of income in the U.S. One exception: Applicants who have lived in the U.S. for one year or longer will have to provide a Social Security number with their application and undergo a credit check.
- No credit score required. Applicants who lack a U.S. credit history can still receive a credit card as long as they qualify in other ways. When vetting an applicant, the company looks at over 200 data points to determine the creditworthiness of the applicant, including debt-to-income ratio, whether they’ve been brought to the U.S. by an established company and whether there are any red flags in their online presence. Rozenrot declined to provide examples of what CreditStacks would consider an online red flag, but he noted that applicants who lack an online presence entirely might give the issuer pause.
- Fewer costs. CreditStacks doesn’t charge an annual fee, so you won’t pay to hold the card. Cardholders also avoid foreign transaction fees, meaning there aren’t extra charges to use the card internationally. There’s also no penalty APR, so the issuer won’t raise the interest rate if you pay late or miss a payment. And unlike secured credit cards, which require upfront collateral, you won’t owe a security deposit.
- Relatively high credit limit. Applicants may be eligible for up to $5,000 in credit. This is fairly high for someone new to credit in the U.S., although it’s possible to find even higher limits in this category. Secured credit cards, by comparison, tend to offer credit limits of only a few hundred dollars.
To determine creditworthiness, CreditStacks looks at factors such as debt-to-income ratio and whether the applicant has been brought to the U.S. by an established company.
- Advance approval. The CreditStacks application process allows applicants to be approved up to 60 days before starting their new job in the U.S. With other major credit card issuers, you may have to wait until you’ve already started your new job in the U.S. before applying.
- Cell phone insurance. CreditStacks provides up to $600 in cell phone protection for cardholders who pay their monthly bill with the eligible CreditStacks card. This is a somewhat rare benefit for personal credit cards, and one that can be particularly helpful since CreditStacks’ cardholder account management system is mobile-only.
Rozenrot says that a key component of CreditStacks’ mission is to provide guardrails that help customers manage their credit responsibly. For example, the company also has an autopay feature that it hopes will help customers make their payments on time and not accumulate debt, so they can keep their credit utilization at the recommended 30% or less of their total credit limit.
For newcomers to the U.S., CreditStacks can lower some of the barriers to entry for credit cards, while also keeping fees low as credit history is established. But it’s worth noting some of the card’s possible downsides:
- Limited credit bureau reporting. In early 2018, the company said it would report account information to all three major credit bureaus. Nearly two years later, it is reporting only to Equifax. As a result, activity on the account wouldn’t be reflected in credit scores or reports pulled from the other bureaus, Experian and TransUnion.
- Approval process. The timeline for approval is currently within two business days from a customer’s application, although Rozenrot said the company is working on improving that speed. And exceptions may exist that result in a longer approval process. Contrast that with an application for a secured card from a major issuer, which will typically approve or deny an application within minutes.
- No rewards. You won’t earn any rewards with the card. If this is important to you, look for secured and unsecured cards that offer rewards that you can qualify for.
- Mobile-only account access. There’s a CreditStacks app, but you won’t be able to access your online account on a desktop computer. Rozenrot says the company wanted to be able to communicate with customers on a regular basis via push notifications and email to teach people how to work with the U.S. credit system.
That’s part of what Rozenrot says is the company’s overall goal — to ease the path for working professionals who are making the transition to a different country.
“The key part to remember is where we come from,” Rozenrot said. “It paints our approach to our customers. We wanted to make the card and experience that we wish we could have gotten.”