Sometimes getting the first credit card in the United States is not easy, especially if you don’t have a credit history or have damaged credit. Here are some steps to take if you were denied a credit card.
Do not get discouraged: The first thing to do is not get discouraged. Even if one company denies your application, there are many other companies in USA wanting to have you as a customer.
Find out the Reasons for the Denial: If your credit card was denied, you will receive a letter in the mail that includes the specific reason for the denial. Use this information to find out what you need to improve to get your credit card. You may need to apply for a different type of credit card or need to improve your credit history.
To ask for an explanation, you can call the toll-free number (800) or (888) listed in the letter with the credit card company’s denial.
Consider alternate options to build or rebuild credit: For this, consider following options to get card which are easier to get:
Department Store or Gas Card
Department stores and fuel companies usually have easy credit card approval process compared to card companies. So basically getting your first credit card with this option is little less complicated. However, consider that they have high interest rates and it is more expensive to maintain a balance. Another negative aspect of these cards is that they can only be used for a particular store or gas station chain. Although they limit what you can buy, they also offer discounts/rewards that may be interesting.
Here are few of the features/benefits of having department cards:
- Varying cash back on gas purchase, travel, restaurants
- Typically such cards come with no annual fee
- Discounts on purchasing products of their own brand
- Reward point for every dollar spend. (This varies for each card).
Few of the prominent cards offered by departmental stores are:
- Amazon Prime Rewards Visa Signature Card
- Target REDcard
- Gap Inc Visa Card
- Lowe’s Advantage Card
- Costco Anywhere Visa® Card by Citi
Secured Credit Card
When your (lack of) credit history prevents you from obtaining a standard credit card, you can apply for a secured credit card. With this, you make a deposit and the bank keeps this deposit in case you do not make your payments as agreed. Many credit card issuers will convert your secured credit card to an unsecured one, as long as you make your monthly payments on time. Don’t worry that a secured credit card will hurt your chances of getting other credit cards because there is nothing in your credit history to indicate that you have a secured credit card.
Here are few of the features/benefits of having secured cards:
- No annual fee in most cases
- The deposit kept is refundable
- Many of these companies provide free tips/education on credit management
- Cashbacks on certain amount of transaction/purchase at gas stations, restaurants,
- If your transaction history is satisfactory then such companies may also convert your secured card to unsecured card
Few of the secured credit cards in USA are:
- BankAmericard® from Bank of America
- Capital One® Secured Mastercard®
- Discover it® Secured
- OpenSky® Secured Visa® Credit Card
- Digital Federal Credit Union Visa Platinum Secured Credit Card