YOU’RE GOING NOWHERE WITHOUT A CREDIT CARD
isiting the United States? Moving to the United States? If you’re coming to the U.S. from a nation where it’s the norm to make everyday purchases with cash, and you don’t know what the problem of carrying around a couple hundred dollars in your wallet is, it’s about time for you to lose that habit before stepping on the U.S. soil.
Most obviously, you don’t want to carry any cash on you to avoid becoming a target of a crime. How does a pickpocket (or even worse, a thief) know that you have cash? Well, didn’t you just take out a $20 bill out of your wallet to buy your coffee? There you go.
Besides safety issues, we’ll walk you through the reasons you need to bring credit cards with you to the United States. Yes, you read that right. “Credit cards” in plural.
Checking into a Hotel
Gone are the days you can prepay for your stay at the front desk upon check-in. If you are staying at a hotel, the receptionist at the front desk will require you to present a credit card and a form of government issued identification. Note that if you do not have a valid U.S. driver’s license or a state ID, you will need to show a passport. Make sure that the name on your credit card appears exactly the same as it does on your ID. The hotel will not accept a credit card even if it belongs to your parent, sibling, child, or whoever else you are closely associated with. If you have recently changed your name (say, you got married), then you would want to make sure that the name that appears on both your ID and credit card is updated.
Most, if not all, hotels in the U.S. will charge what is called an authorization hold to your credit card for incidentals such as dining, parking, and other charges billed to the room. While the authorization will only show as “pending” on your online banking account and won’t be debited from your card unless you actually bill the incidentals to your room, your credit limit will temporarily decrease for that amount. The system will automatically decline your credit card if the room charge for your 4-night stay costs $1200 and you only have a credit limit of $1200 on your card. The amount of this authorization hold varies by hotel, but expect it to be anywhere from $50 to $200 per night on average.
If you use a debit card for your stay, note that the authorization hold will show as a pending charge in a similar manner to how it will be shown when using a credit card. You will need to have in your bank checking account a balance that will cover such charges on top of room rate and taxes.
Also, expect rental car companies to have a similar policy if you plan on renting a vehicle, and some of them will only accept credit cards and NOT debit cards.
Have Multiple Cards Handy
Call your credit card company ten billion times to let them know that you’re going on a vacation, and their fraud department will somehow still manage to place a security block on your card. The worst you could assume is that there will be a huge line behind you by the time you attempt to swipe the credit card for the 32nd time and then finally decide to call your card company, but in the worst case scenario, they would’ve already cancelled your card and will have to send you a new credit card to your address on file – in your home country. We don’t consider holding a paper cup begging strangers for spare change an ideal vacation or your first step to living in the United States. Hopefully, you won’t either.
In the U.S., credit cards are generally accepted in the order of:
- VISA/MasterCard
- Discover
- American Express
Local businesses often may not accept American Express because it tends to charge a higher fee to the merchants. Do an online search to see why so many consumers still choose to have American Express though, and you can decide for yourself if one of their cards appeal to your needs.
While VISA and MasterCard are generally accepted by most merchants, we have seen exceptions. Neiman Marcus, an upscale department store, only accepted American Express and their own charge card until they updated their policy in 2011. As USA Today reports in its article, some of the major supermarket brands owned by Kroger including Smith’s no longer accepts VISA credit cards although they will still accept VISA debit cards.
We would strongly recommend you to carry two credit cards from different card companies at the very least.
Bring Credit Cards from Your Home Country
In the United States, we have what is called a Social Security Number. You can do a research on your part to find out more about it, but simply put, it’s a nine digit number given to all Americans at birth, and credit bureaus record your creditworthiness with this number. If you are not authorized to work in the United States, which is most likely the case of the majority of students on an F-1 visa, you probably will not be able to obtain a Social Security Number.
Even if the Social Security Administration assigns you a Social Security Number, that’s only the first step to building your credit history. Unless you were blessed with parents or guardians that were generous enough to establish a good credit on your behalf in the U.S. before you turned 18, you will have virtually no credit. Credit history from other countries do not transfer into American credit history, so you could have paid all your bills on time in your home country for decades, make multi-million dollars annually, and have a balance of $200,000,000 in your bank account; but you will still have zero credit history in the United States if you have only recently received a Social Security Card.
With virtually zero credit history, some banks may approve you for their entry level credit card with minimal credit limits. Don’t apply for multiple credit cards immediately because that will significantly hurt your credit score. At a later date, we will guide you more in depth on how to build your credit score.
Protection From Unauthorized Charges
All credit card consumers with US issued cards are protected from fraud. Your country most likely has a similar law that will not hold the consumer responsible for unauthorized charges in the event that you lose your card, your card is stolen, or you become a victim of skimming. Make sure to know how the protection works in the country where your card was issued and the policies that applies to your particular credit card as it can vary from one card to the other, let alone different countries.
Is Cash Ever Used in the US?
Very rarely, some merchants may not accept credit cards because of the fees they need to pay. It is highly unusual to see such business today though, and you can expect that virtually all merchants in the US will accept credit cards. Sometimes, smaller stores may have a minimum amount you will need to spend to use a credit card, but that minimum limit is usually low at around $10.
Splitting the bill at the restaurant is easy as well as you could pay a single tab with multiple cards. If you’re dining with a huge party and don’t want to abuse your server with fifty different credit cards, Venmo and Paypal is commonly used to transfer money among friends.
You may come across some offices that do not accept cash at all for security reasons. Their tactic is that by not having any cash on premises, they can minimize the chances of being a target of bank-robbery style incidents.
Public transportation, especially buses, and parking meters in some cities may not accept credit cards, but those have pretty much changed across the nation as well.
When staying at a hotel, it is always nice gesture to thank your bellperson or valet agent with a few bucks, so you may want to have a few dollar bills handy.
Some cab drivers may prefer cash to avoid fees and may even try to make you use hard cash with their unique stories, but nine out of the ten times we were given a story on a cab about their credit card machine malfunctioning, it was usually an inaccurate statement.
Alternatively, you can use a rideshare app like Uber which we have introduced in our article here.
To Sum it Up
- Having a few credit cards is pretty much mandatory in the U.S.
- Carry at least two credit cards with different logos.
- You will need a credit card to check into a hotel.
- Other businesses may also not accept cash.
- Bring credit cards from home country if you’re traveling or just settling into the U.S.
- Never carry excessive cash on you.
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