Cash or Credit? What would you answer?
For me, it was cash ‘til I got to the United States. But the Wu Tang Clan song C.R.E.A.M. (Cash Rules Everything Around Me) doesn’t ring so true here. Credit rules.
Yup, a high credit score is what the American Dream is all about. Forget the white picket fence, a high credit score is your meal ticket forever.
But how do you get a credit score? I was clueless. Born in Nigeria and raised in England, I knew nothing about the American credit system.
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I was raised in a household where owning a credit card was in the same lane as stealing food from my mother’s pot. Forbidden.
My mother was always quick to let me know about one aunt or cousin who was in debt due to all their credit cards.
The way I grew up in Nigeria, there was one simple rule. If you don’t have the money to buy an item, don’t LOOK at it. You either save for it or forget about it. Getting something you couldn’t afford was synonymous with stealing.
With this thorough education on credit, I ran away from credit cards every chance I got.
But credit cards are important in the United States, as they allow you to build up a credit history. Without one, you can’t buy or rent an apartment or even a car.
As a foreigner living in the U.S., this was news to me.
My First Credit Card FAIL
The first thing I did was to try my bank for a credit card. That should be easy, I thought. After all, I do have an account with them.
I sat and applied for a credit card with a smiling, suit-wearing “financial advisor.”
A few weeks later I got the rejection letter. Trust me, rejection in all forms is basically the same.
To get a credit card, you need to have credit history. I had only been in New York for two years and didn’t have a credit history.
I tried rival banks. Four credit card rejections later, the verdict was the same.
Side note: Do NOT apply for a dozen credit cards in the same month. It will lower your credit score.
A Little Help From My Friends
I decided to seek advice from my friends.
Amaka Ogbonna, 26, said she had gotten her card with no issue at all and had been given a credit limit that almost made my hairline disappear.
Aniekeme Umoh, 22, had gotten her first card while she was in college, during her sophomore year.
So why was my issue different?
“Income,” they both answered simultaneously. Amaka is a Registered Nurse, so her income immediately allowed her to receive a card.
Aniekeme’s tuition and living expenses were covered by her parents while she was in school, which meant she always had money coming into her account.
And me?! I was a graduate student with a starter job, living in the Upper West Side trying desperately to live out the lyrics to ‘Independent Woman’ by Destiny’s Child.
Please don’t ask how that is going.
So what was I to do? Pray for a miracle to happen.
It happened in the form of one of the many credit card applications I filled out online. I had become obsessed.
Capital One! They gave me my first card. The limit is laughable (less than $350) but it’s getting me somewhere, and with that limit I definitely won’t be in debt and homeless.
No worries, Mother.
My Quick Tips for Getting Your First Credit Card
- Don’t apply for too many cards at once. Every time you apply for credit, your credit score lowers. This is because during every application, the bank will run a credit check.
- Shop around for a credit card like you’re shopping for college. This will help you avoid applying for a dozen credit cards at once, which would lower your credit score. There are even websites that will match you to appropriate credit cards based on your credit score, like Card Match on CreditCards.com.
- Be realistic in your expectations. In the words of my friend Amaka, “A $40,000 income probably won’t get you an American Express Card with a $10,000 limit.” Don’t use lustful eyes to get a credit card, use your bank account. Get what you can afford.
- Secured credit cards can help you build your credit history. If you have zero or bad credit, a secured credit card is a great option to help you build your credit history. You are required to put down a deposit equal to the credit limit you would want (minimum deposits can be as low as $300 at some banks). The lender keeps the money and gives you a limit totaling the amount you deposit or a percentage above that amount. Check out this list of secured credit card providers from Bankrate.
- If possible, go for a card with no annual fees and a 0% APR in the first 12 months. This allows you to familiarize yourself with credit without having to pay any fees or interest for the first year.