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NerdWallet’s Best Credit Cards for New Immigrants

March 11, 2016
Credit Card Basics, Credit Cards, Credit Cards for Bad Credit
NerdWallet's Best Credit Cards for New Immigrants
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  • Digital Federal Credit Union Visa Platinum Secured Credit Card

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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.

» MORE: A financial guide for immigrants in the U.S.

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 cardholders 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.

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 13.25% Variable APR. 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 $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.

Kevin Cash is a staff writer at NerdWallet, a personal finance website. Email: kcash@nerdwallet.com. Twitter: @kevin_cash.


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