Should I apply for a real credit card or a store card to boost my credit score?
April 20, 2008 10:06 PM   Subscribe

Recently relocated to US, trying to build credit - already got a secured credit card, should I get a store credit card or try for a real one?

I relocated to the US 6 months ago and have been gainfully employed since. I got a secured credit card upon arrival and have been diligently using it and paying off the balance each month.

I've recently started getting credit card offers in the mail which I'm assuming means my credit rating is now starting to rise.

What are my next steps? Should I apply for a "real" credit card? A store card? both?

Is there any advantage in having a store card? Is this considered in a different category than secured and unsecured cards in terms of diversity of credit (supposedly having a positive affect on one's credit score)?

My goals are to raise my credit score, I have no intention of carrying a balance.
posted by shimon to Work & Money (7 answers total) 6 users marked this as a favorite
Do you have checking and savings accounts with a bank in the US? If so, apply for an actual credit card through this bank. You're more likely to be approved; you probably won't get a fantastic interest rate but that doesn't matter if you're going to pay it down to zero each month. I'd advise against store cards due to the ridiculous interest rates and limited utility they have. A Citibank Visa would be more useful.
posted by cgomez at 10:18 PM on April 20, 2008

I'd say get a real card and avoid store cards, ask your bank if the secured card can be changed to unsecured.

Links that will help: lots of good info and comparison shopping for credit cards - avoid ones with annual fees.

A few things to avoid

Lifehacker link about store cards

FTC link
posted by clanger at 10:26 PM on April 20, 2008

Thanks cgomez.

I don't intend to carry a balance so interest rates aren't really a concern - I ask about store credit cards as I understand that diversity of credit is something that can raise your score and was wondering if a store credit card was in a different category than run-of-the-mill secure/unsecure cards.

I do have a checking/savings account at a US bank, thanks for the tip.
posted by shimon at 10:28 PM on April 20, 2008

Welcome to the USA. Offers of credit cards, even those that say pre-approved are usually just invitations to apply. The fine print usually says something like "subject to approval." Store cards are definitely in the middle tier between secured and unsecured multi-purpose cards such as VISA.

Personally I like my Sears credit card. Sears merchandise is high quality and they offer service contracts, extended warranties on the what they sell. So I would recommend them as a next step. You can use a Sears card to charge a number of outside services. Sears offers their own Master Card, so ater establishing a good credit history with the Sears card it should be easier to obtain their Master Card.

I have found that American Express cards are not that difficult to obtain. The regular card is due in full each month.
posted by swarkentien at 10:32 PM on April 20, 2008

Using just the secured credit card I got myself up to and excellent Experian credit rating within 6 months. The trick is to pay everything off but for a dollar every month. The fact that you use it every month, pay off the majority, but carry a small balance seems to do something good.
posted by merocet at 7:05 AM on April 21, 2008

Usually store cards these days are just Visa or Mastercards that can be used anywhere. The only difference is the logo on the card.
posted by gjc at 8:28 AM on April 21, 2008

You don't say where you originated from. I came to the US from the UK, so I was able to have my UK bank (HSBC) set me up a bank account and have me issued with a real credit card through HSBC USA on my arrival. If you cannot transfer your credit record to an affiliate bank, then avoid store cards and go for a real credit card. You may find that all of those mailshot offers do not translate to credit - a friend of mine received these, but was still turned down for a credit card until he had been working for two years. swarkentien is correct: American Express have some good cards that are slightly easier to obtain - try their Blue card account - this is a regular credit card (does not need to be paid off each month) and you should be good for a relatively low credit limit if you are working full-time. You could also try one of the local banks - call in and see a bank advisor. They can often pull strings if they feel you are a good risk.
posted by sgmax at 8:13 PM on April 21, 2008 [1 favorite]

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