When I first set foot to live in this country a few years back, I quickly found out how important credit history is. Even subscribing to a simple cellphone service quickly taught me that with no history, no one would trust me. Before I could subscribe, they required a huge deposit. I didn't want to waste my money on putting in a huge deposit and gain no interest on it, so I thought that the next logical step was to apply for credit. But no matter where I turned to, no one would issue me one because I had no credit history. Even those institutions that sent me mail with the invitation to apply would turn me down. It was quite frustrating. How the heck do I build a history if no one was willing to take the risk and give me one??!! I even sent a letter to Standard Chartered Bank to see if they would issue me credit here since I was a founder member credit card holder in the Philippines and had history there. They sent a letter of regret saying that they are not in the business of credit cards in the US.
Finally, I just resorted to paying for a secured credit card. It was like a debit card wherein my credit limit was the amount that I had 'deposited'. The money earned no interest and the APR for purchases was ridiculously high, if you did not pay your monthly bill in full. The only advantage was, credit bureaus are not able to tell that it is secured. Through that, as well as being an authorized user on my husband's cards after we got married, I was slowly able to build my own solid history, and I eventually replaced that secured high-interest card with a few of low-interest, perk-filled, no annual fee credit cards.
Today, I scoff and thumb my nose at those companies that snubbed me before because of insufficient history. They really want my business now, it is not even funny. Our small mailbox gets stuffed with pre-approved offers daily. Today, I had three offers, a Citibank Diamond Preferred, a Chase Visa Platinum and an American Express Platinum. One even offers a free companion airline ticket! And you guessed right. Now, I get the pleasure of turning them down! Hmp!
:)
Note: To be fair to AMEX, they've treated me very, very well from the beginning. They were the only one who took a risk with me so they will have my business for a long, long time. Their Platinum program just has an expensive annual fee. A Financial Planner advised me never to pay an annual fee for a credit card. She said it was a waste of money since there are so many credit cards that offer the same without the annual fee. She's right!
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5 comments:
hi. found you through AnP. i'm quite lucky that when I moved to NZ, my husband has a credit history so it was quite easy to access all these credit card facilities BUT we are paying annual fees on our cards! arrgghhhh!
A great tip...
When I was sixteen someone told me to apply for a Sears card to establish some credit history. I applied for the card, was surprised that I got approved, made a purchase (I think I bought a hammer), and never used it again. A couple of months later I started getting offers for other credit cards and the ball started rolling from there on. Someone had a theory that Sears is good about approving people for credit, and when history is built with a big department store like Sears, others tend to follow suit, and pretty soon Mastercard, Visa, and American Express noticed based on the card activity on the Sears card. And to this day when I view my credit history, my Sears card is still the oldest card noted on that history. :) That turned out to be good advice.
P.S.
The Sears card had no annual fee, and there were no other conditions or strings attached.
I followed that advice in my first quarter in the US and tried to apply for store cards as well, Victoria's Secret and a May Company store, to be specific. They turned me down! I never got to try SEARS because by that time, I didn't want to get rejected again. But I did hear the same advice. JC Penney is the same, I hear.
Thanks for dropping by, Christine! Kiora! (I hope that's right.)
Also...
I agree with your financial advisor in that you shouldn't pay annual fees for any credit card...unless it is an airline mileage card. But not just any airline card or those cards that promise you coupons for trips (and have a ton of other conditions), I mean the card from the airlines themselves and establish a direct dollar to miles translation. I use an airline mileage card to pay for purchases, and I also try and pay for all the bills I possibly can through the card. Right now my Netflix, gym membership, cable bill, and a myriad of other bills go through the card. If I can pay my mortgage through the card I would. Of course, just like any other card, it requires due diligence to pay it every month. I don't suggest having a rolling balance on the card. Nevertheless, it has paid off quite well for me. Due to the activity on the card, I am able to get at least one free round trip ticket a year within the continental U.S. And...sometimes, especially if there is an emergency, it is nice to just get on a plane and use miles that are accumulated based on purchases you would have made anyway. I feel the annual fee is a small price to pay for the saved miles.
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