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Depending on the credit card issuer and the card, there can be foreign transaction fees assessed when you purchase an item overseas as well as annual fees. There are also some credit cards that don’t charge any foreign transaction fees or annual fees at all.

Opting for a no annual fee and no foreign transaction fee credit card may seem like the obvious choice when selecting a card — and often it is. However, there are some scenarios in which avoiding fees won’t necessarily be a cardholder’s top priority. Learn the full story here.

What Are Foreign Transaction Fees and When Are They Applied?

A foreign transaction fee is a charge that you might pay when you make a purchase on your credit card while in a foreign country. For instance, you might get charged a foreign transaction fee when buying a ticket to visit a museum or dining at a restaurant abroad. These fees might also get tacked on when you take out money from an ATM in another country.

You don’t necessarily have to be in a foreign country to get charged a foreign transaction fee though. Sometimes, a foreign transaction fee might kick in if you’re buying something from a company that’s based in a foreign country and that processes the transaction in its local currency. For instance, let’s say you buy a pair of shoes from a retailer based in France. If the purchase is processed in euros, you might be charged a foreign transaction fee.

A foreign transaction fee is typically based on a percentage of the transaction amount. For instance, if your card charged a 2% foreign transaction and you bought an item that cost $100, the foreign transaction fee would be $2.

Foreign transaction fees are a common credit card fee that will show up on your credit card statement, and they can make your travels more expensive. Say you spend $4,000 on a trip overseas, and your credit card charges a 2% foreign transaction fee. In that case, you’d pay $80 extra to cover the cost of foreign transaction fees.

How Much Are Foreign Transaction Fees?

The amount of foreign transaction fees varies depending on the credit card issuer. That being said, most foreign transaction fees are between 1% and 3% of the transaction amount. A number of cards don’t have a foreign transaction fee.

One thing to note: Foreign transaction fees are different from currency conversion fees. In some cases, you might get hit with a double whammy and be charged both. You could also face a credit card convenience fee, depending on where you use your card.

Foreign Transaction Fees by Credit Card Issuers

Here’s a look at foreign transaction fees charged by the major credit card issuers. On average, here’s how much they can run, depending on which card you’re using and the issuing bank or credit union. Just keep in mind that they may vary depending on the different types of credit cards available from an issuer.

Credit Card Issuer	Average Foreign Transaction Fee
Visa	0% or 3%
Mastercard	0% or 3%
Discover	0%
American Express	0% to 2.7%

Recommended: How Credit Cards Work

What Are Annual Credit Card Fees and When Are They Applied?

Some cards come with an annual credit card fee. This fee is a yearly charge collected by a credit card issuer in order to use the card. Often, paying an annual credit card fee allows cardholders to tap into special perks and benefits, such as higher credit card points earnings on purchases, extended warranties and price protection, and travel or cash back perks.

The annual credit card fee will turn up on your credit card statement once a year as a single lump-sum charge. Usually you’re charged during the same billing cycle or month in which you initially signed up for the card. Once you pay the annual fee, the next time you’ll get charged is in 12 billing cycles.

You’ll cover a card’s annual fee just like you would any other purchase you put on your card. The fee will show up on your card and get folded into your statement.

How Much Are Annual Fees Typically?

The amount of an annual fee depends largely on the card, but in general, annual fees can run anywhere from $95 per year to upwards of $500. There are a number of credit cards available that don’t charge an annual fee. And some that do also offer the opportunity to get the fee waived.

Do Cards With No Annual Fees Tend to Also Have No Foreign Transaction Fees?

Whether cards that skip out on charging annual fees will also have no foreign transaction fees varies. There’s no hard-and-fast rule. In some instances, a card might have an annual fee but no foreign transaction fee. On the flip side, a credit card might have a foreign transaction fee but no annual fee. Or a card could charge both fees or neither fee.

Before opening an account, it’s important to read the fine print and comb through the terms and fees of a given credit card. This will outline the fees a card might charge as well as the rate of credit card purchase interest charges. That way, you’ll know what you’re getting into with any given card.

Recommended: How to Avoid Interest On a Credit Card

No Annual Fee and No Foreign Transaction Fee Credit Cards: Who They’re Great For

Here’s a closer look at when a one-two punch of a credit card with no foreign transaction fees and no annual fee might best benefit you.

Online Shoppers

If you do a lot of your shopping online, particularly through brands that aren’t U.S.-based, you might find a no annual fee and no foreign transaction fee credit card beneficial. That way, if you happen to buy something from a merchant based in a foreign country and with credit card processing done in their local currency, you can save on foreign transaction fees.

Plus, if you have a strong credit score and can snag a card that offers a better-than-average rate of cash-back rewards or points, you might not need to splurge on a card with an annual fee to gain access to added perks.

International Travelers

Foreign transaction fees can rack up quickly if you’re putting purchases on your card while traveling in other countries. For instance, if you spend $5,000 on your credit card while on a trip overseas, and your card charges 3% for foreign transaction fees, that could cost you an additional $150.

To avoid this expenditure, you might be better off looking for a card that doesn’t have foreign transaction fees. You’ll further avoid cuts to your travel budget by skipping out on paying an annual fee.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

No Annual Fee and No Foreign Transaction Fee Credit Cards: Who They’re Bad For

If you fall within one of the following groups, you might not find that it’s worthwhile to focus on finding a credit card with no annual fee and foreign transaction fee.

People Who Want the Most Rewards and Perks

For those looking for the most competitive rewards rate, lucrative travel perks, or a sizable welcome bonus, then a credit card with an annual fee might be their best bet. By taking advantage of these benefits offered by the card, you could still come out ahead even with the annual fee, as the perks can effectively offset the cost of the fee.

Just make sure to do the math ahead of time and ensure you’ll take enough advantage of the available perks before agreeing to a hefty annual fee.

Recommended: Choosing a Rewards Credit Card

Those With Poor or Limited Credit

If you have poor credit or a limited credit history, you might not be faced with the choice of credit card miles vs. cash back when choosing a card. Instead, your options may be pretty limited. For those in this situation, a credit card that charges an annual fee and/or foreign transaction fees may still be their best — or only — available option.

By using your credit card responsibly, you may be able to build your score and qualify for a card with more competitive terms.

Tips for Save on Credit Card Fees When Traveling Abroad

Hoping to avoid credit card fees while you’re out of the country? Here are some pointers to keep in mind:

•   Ask about fees ahead of time. If you’re not sure which of your credit cards does or does not charge foreign transaction fees, it can pay to ask ahead of time. Then, you can opt to avoid using a card with a hefty rate for foreign transaction fees while you’re traveling. Even if you can’t avoid these fees entirely due to the credit cards you have, you’ll at least avoid a surprise when you get home from your trip and be able to spend more strategically.

•   Consider getting a no foreign transaction fee credit card. If you have the time ahead of your trip, can weather a dip in your credit, and are in the market for a new card, then getting a credit card with no foreign transaction fees can make sense. This is especially true if you have a number of trips abroad planned for the future.

•   Exchange cash before leaving the country. Another way to dodge fees while traveling is to exchange U.S. dollars for the local currency in the country you’re visiting before you leave. This will allow you to avoid potentially costly trips to the ATM and added fees when swiping your credit card. Just make sure to take safety into consideration before taking out a huge amount of cash.

Recommended: Can You Buy Crypto With a Credit Card?

The Takeaway

A no annual fee no foreign transaction fee credit card can save you money — especially if it comes with its own set of perks that you don’t have to pay extra for. Plus, you don’t have to keep as close an eye on your spending abroad so you can better kick back and enjoy the sights. However, these cards aren’t right for everyone. Understanding your financial goals and options can help you make the right decision for your situation.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What does it mean when a credit card has no foreign transaction fees?

A credit card with no foreign transaction fee means that you won’t get dinged with a fee should you make a purchase in a foreign country. Depending on how much you end up spending while traveling, it could save you a significant chunk of change.

Why are no annual fees important?

A credit card with no annual fee can mean you save money and access similar services without a surcharge. Plus, you won’t have to work as hard for the annual fee to pay off. In other words, you won’t have to strategize to make the most of any special perks, nor will you need to worry about spending a certain amount to offset the cost.

Is 3% foreign transaction fee a lot?

A 3% foreign transaction fee is on the high end of average. The rate of foreign transaction fees can vary, but they typically run anywhere from 1% to 3%, with some cards not charging any foreign transaction fees.

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Photo credit: iStock/RgStudio

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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How old an authorized user has to be really depends on the credit card issuer. Some set the minimum age for an authorized user on a credit card at 13, while others require that an authorized user is 15 or even 16. Many issuers don’t specify a minimum age requirement at all.

In other words, it’s largely up to the adult’s discretion whether a minor seems old enough to become an authorized user. While it can serve as an educational tool and help build their credit, it also can lead to racking up debt and impacting both parties’ credit. You’ll want to make sure you know what you’re getting into in order to determine if it’s the right arrangement for you.

How Old Does an Authorized User Have to Be?

While the minimum age to get a credit card of your own is 18, an authorized user on a credit card can be as young as 13.

That being said, the minimum age for an authorized user on a credit card ultimately depends on the credit card company, as each issuer has its own age requirements. Some set the minimum age to 13 years old, while others may make authorized users wait to get a credit card at 16 or 15 (SoFi requires an authorized user to be age 15 or older). Some credit card issuers don’t specify a minimum age for authorized users on credit cards.

Factors to Consider Before Adding a Minor as an Authorized User

Before you add a minor as a credit card authorized user, consider the following factors.

Whether You’ll Have to Pay a Fee

Depending on the particular type of credit card and issuer, you might have to pay an additional annual fee to add an authorized user. For example, the Chase Sapphire Reserve card currently charges a $75 fee to add an authorized user.

Check with your card card issuer to see if you might get hit with a fee for adding authorized users to your account.

If They’re Old Enough to Handle the Responsibility

Even if you can add an authorized user as young as 13 to your card, doing so might not be in your best interest — or theirs. For instance, a child in their early teens might not have a basic grasp of managing finances, or they might not be mature enough to handle the financial responsibility and abide by basic credit card rules.

If you’re adding your minor as an authorized user to help them establish credit, a few years is enough time for them to be on their way. Plus, should you slip on your credit, it could also impact your child’s credit.

Recommended: How to Avoid Interest on a Credit Card

How You’ll Track the User’s Purchases

Most credit cards don’t issue unique card numbers to each authorized user. That means if you have multiple authorized users on an account, you won’t be able to easily figure out who made which purchases. Before you go ahead with adding an authorized user, make sure you have a system worked out so you’re not stuck covering their spending (unless you want to).

Whether You’ll Give Access to the Card

While you can give an authorized user their own card, you don’t have to, especially if you’re worried about how they’ll spend with it. If you’re strictly adding a child to your card to help them build credit, there’s no need to hand them a card. They don’t need to have access to your credit card number, either.

Steps to Add a Minor as an Authorized User

First and foremost, you’ll want to carefully weigh the pros and cons of adding someone under the age of 18 as an authorized user. If you have decided that you want to proceed, you’ll need to do the following.

1. Educate the Child About Credit Card Basics

Before adding a minor as an authorized user and giving them the privilege to spend on your card, sit them down and walk them through how credit cards work. For instance, you’ll want to explain what a credit limit is, how interest rates work, what one’s financial responsibility is when putting purchases on a card, and why it’s beneficial to build credit.

Recommended: What Is the Average Credit Card Limit?

2. Reach Out to the Credit Card Company

Next, you’ll need to contact the credit card company to let them know you’d like to add an authorized user to your card. You can do so by calling the number on the back of the card or by logging onto your account online.

You usually need to provide the following information about the individual you’re adding as an authorized user:

•   Name

•   Date of birth

•   Social Security number

•   Address (for them to receive the card)

•   Additionally, you may be able to set spending limits or restrictions for the authorized user at this point in the process.

3. Check Your Account

To make sure the authorized user was correctly added, log on to your account on the issuer’s website or through the app. Double-check to make sure the minor’s name and details are all correct. You might also receive an email notification informing you of this change.

The Cost of Adding an Authorized User

Many credit card issuers do not charge a fee to add an authorized user to an account. However, premium credit cards or cards that already charge annual fees, may charge an annual fee for adding authorized users. This fee may apply per authorized user, or you may pay a flat cost for up to a certain number of users.

Beyond this potential fee, there are other costs you could incur by adding an authorized user. For instance, additional purchases made by the authorized user could cause you to rack up a balance. Plus, their activity can impact your credit utilization, which could hurt your credit score.

Recommended: What Is a Charge Card?

Pros and Cons of Adding a Minor as an Authorized User

Here’s an overview of the advantages and downsides of adding a minor as an authorized user to your credit card:

Pros

Adding an authorized user can have the following benefits:

•   Can help build credit: A major upside of adding a minor as an authorized user is that it can help them establish credit at a young age. They’ll have a more firm financial footing as a result.

•   May allow you to earn more rewards: Another person making purchases on your card means there’s greater potential to earn more rewards. You can gain rewards more quickly than if you would if you were the sole user.

•   Serves as an educational tool: You may find that adding a minor as an authorized user to your card can help them learn credit basics and how to manage credit card debt, especially if you coach them through the process.

Recommended: Can You Buy Crypto With a Credit Card?

Cons

Beware of the potential downsides of having an authorized as well:

•   May cause you to rack up debt: It can be easy to rack up debt and overspend on the credit card with an authorized user. This is especially possible if you’re giving a child access to your card who is still wrapping their head around financial basics.

•   Can’t easily track who is making the purchases: Because purchases aren’t tracked by the authorized user, it might be tough to figure out which person was responsible for which transaction with your card. This is particularly tricky when you have, say, a joint account user and several authorized users.

•   Can impact credit of both primary cardholder and authorized user: If having additional users on your card equates to carrying a higher balance, that can up your credit utilization ratio. As credit usage makes up 30% of your credit score, you’ll want to keep that ratio under 30%, preferably closer to 10%. Beyond potentially hurting your credit, also know that any irresponsible credit behavior on your card can hurt your authorized user’s credit. For instance, if you are late on a credit card payment, both your credit and the credit of the minor you added to your card can suffer.

Recommended: When Are Credit Card Payments Due?

Tips for Managing a Minor as an Authorized User

If those possible downsides are making you nervous, here are a few things you can do to ensure your minor uses their privileges responsibly:

•   Set limits. Talk to your child and give them an amount they can spend on the card each billing cycle. Also, determine if they’ll be responsible for helping you pay off their share. Or perhaps you might consider an alternative arrangement, such as doing chores around the house to cover purchases they made on their credit card. Hash this out beforehand.

•   Treat the card as a teaching tool. Sit down with your child and go over basics of a credit card, such as how interest fees work, how to read a billing statement, and what can happen if you’re late or miss a payment. You’ll also want to teach them how repayment works.

•   Set alerts. To keep an eye on your child’s spending, consider setting alerts on your credit card. You can set it up so you get notifications for transactions over a certain amount, or any transactions made online, in person, or over the phone.

Recommended: Tips for Using a Credit Card Responsibly

Removing a Minor as an Authorized User

Removing a minor as an authorized user from a credit card is a relatively simple and painless process. To do so, you call the number on the back of the card and let them know the name of the person you’d like taken off. If you have several authorized users on a card, be sure to specify which card user you’re removing.

It’s not a bad idea to leave a paper trail and send a letter to the credit card company reiterating that you’ve requested the change over the phone.

The Takeaway

The minimum age for an authorized user on a credit card varies depending on the credit card issuer. Some require an authorized user to be 13, while others set the age limit at 15 or 16 or even have no formal limit at all. Before adding a minor as an authorized user on a credit card, you’ll want to carefully weigh the pros and cons before doing so. If you decide to add a child as a user, set some ground rules and teach them credit and financial basics beforehand.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Do some issuers allow authorized users with no minimum age?

Usually the minimum age requirement to add an authorized user to a credit card is at least 13. However, there are several credit card issuers that don’t note a specific minimum age.

How many authorized users can I add to my account?

It depends on the credit card issuer. Some allow, say, between four and seven, while others have no limit as to how many authorized users you can add to a credit card. The number of authorized users might also depend on what type of card it is, such as a rewards or travel credit card.

Is an authorized user relationship or a joint account holder better?

It depends on what kind of privileges you want the additional card user to have and the reason you’d like to add them. If you want to help build someone’s credit and not have them responsible for making payments, then an authorized user could be the better route. If you’d like the user to be equally responsible for making payments and have access to make changes on the account, a joint account holder might make sense.

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Photo credit: iStock/Manuel Tauber-Romieri

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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If someone has opened a credit card in your name, it’s important to act fast. There are clear steps you can take to stop the fraudster in their tracks and avoid any harm to your credit score and bank account.

Read on to learn what is likely happening and how to protect yourself.

Finding Out That Someone Opened a Credit Card in Your Name

You won’t always immediately know that someone has stolen your identity. However, there are several ways to stay on top of potential identity theft and keep it from getting out of control.

Watch out for some of these common signs of credit card fraud:

•   Bills in the mail for an unfamiliar account in your name

•   Email or text notifications for a new account opening that you did not initiate

•   Notification that an account in your name has gone to a debt collections agency

•   Notification from an identity monitoring service or free credit monitoring service that a new account has been opened

•   Unfamiliar activity while reviewing your free credit report

•   An unexplained drop in your credit score

•   Credit application rejection because of a drop in your score

These signals can indicate that a form of bank fraud is underway.

Recommended: Credit Card Scams You Should Know About

7 Steps to Take When Someone Opens a Credit Card in Your Name

If someone opens a credit card in your name, know that it can happen to anyone. In 2023, the Federal Trade Commission (FTC) received 2.6 million fraud reports from consumers, though it’s likely that many more cases of fraud went unreported.

If your identity has been stolen, it’s important to take a breath but remain focused. Knowing what to do if someone applies for a credit card in your name allows you to act quickly. That’s why we’ve put together seven steps to take as soon as you realize someone has opened a credit card in your name.

1. Contact the Bank or Card Issuer

You may not be a customer of the specific financial institution where the credit card was opened, but that doesn’t mean you can’t call them. In fact, the first thing you should do is contact the credit card issuer’s fraud department and file a report. You can usually find the bank’s customer service information online.

The credit card issuer should be able to close the account during the fraud investigation. But if they won’t, you can ask them to freeze the account until the investigation is complete.

Just in case, it’s a good idea to change the username and password of major online accounts, including your email and online bank logins.

2. Report the Identity Theft to the FTC

The report you file with the credit card issuer is the first of many. Next, file an identity theft report with the FTC at IdentityTheft.gov . The FTC will create a recovery plan and issue you an Identity Theft Report, which you may need when working with the credit card issuer and credit bureaus. When you file the report online, you’ll even be able to access form letters to send to creditors about the fraud.

3. File a Police Report

The FTC also recommends filing a police report any time your identity is stolen. The police can provide you with a copy of the report, which may be helpful in closing new accounts, disputing fraudulent charges, and working with credit bureaus to repair your credit report.

Recommended: What Is a Charge Card?

4. Consider a Fraud Alert or Credit Freeze

To further protect your identity, the FTC recommends that you place a free, one-year fraud alert on your credit report or a credit freeze. You should only have to contact one of the three credit bureaus — Equifax®, Experian®, and TransUnion® — and that bureau must coordinate with the other two. Such alerts ensure that lenders are more thorough in verifying your identity before awarding a line of credit in your name.

Victims of identity fraud can choose between two fraud alerts: initial and extended.

•   Initial fraud alerts last one year but don’t require evidence of identity theft; these alert periods are renewable.

•   Extended fraud alerts require the FTC Identity Theft Report and last for seven years. They also remove you from any credit card and insurance offers for the next five years.

You may also want to freeze your credit report with each of the three credit bureaus. To do so, you’ll need to contact each bureau independently. When you freeze your credit report, creditors won’t be able to access it unless you temporarily unfreeze it. This prevents fraudsters from opening credit in your name.

5. Check Your Credit Reports in Detail

As a consumer, you have access to a free credit report every year from AnnualCreditReport.com , and that increases to two a year if you have an extended fraud alert. Creating accounts with individual credit bureaus may also get you access to free credit reports.

It’s important to comb through your credit report upon becoming a victim of credit card fraud. Doing so allows you to identify any other fraudulent accounts or activity you may not yet be aware of.

6. Dispute Fraud with Credit Bureaus

To protect your credit score and remove fraudulent activity found in your report, you’ll need to contact the credit bureaus. You can dispute the fraud online with all three bureaus:

•   Dispute fraud at Experian

•   Dispute fraud at Equifax

•   Dispute fraud at TransUnion

You’ll need a valid copy of your FTC Identity Theft Report for this process, as well as proof of identity and a letter that details which information on the report is fraudulent. Credit bureaus can then work with creditors on any fraudulent account and block them from sending your information to debt collectors.

Recommended: Does Applying for a Credit Card Hurt Your Credit Score?

7. Remove Charges and Close the Account

Some credit card issuers and banks will immediately remove false charges and close the fraudulent account when you contact them in step one. However, if they could not do that when you first filed, it’s a good idea to get back in touch with them now that you have reports from the FTC and local police.

At this point, you should be able to close the fraudulent account and remove any fraudulent charges.

Recommended: Understanding Purchase Interest Charges on Credit Cards

What If a Relative Opens the Card in Your Name?

Because of their close proximity to personal information, family members can more easily commit identity fraud. While it may be hard to believe, family members do occasionally steal relatives’ identity, especially those of children and seniors.

In fact, around 75% of child identity fraud is committed by a friend or family member with access to the child’s information. Identity theft is also a form of elder abuse. Overall, about 72% of the funds lost by those over age 60 involves a person known to the elder, whether a family member, friend, or caregiver.

You now know what to do when someone opens a credit card in your name. But what about when it’s a family member you care about? While it’s ultimately your decision, you risk significant damage to your financial future by not taking action.

Not only will you be on the hook for any expenses in your name and damage done to your credit score, but you’ll also face other future barriers:

•   Your lower credit score may make it more difficult to rent an apartment, get utilities turned on, or find discounts on auto insurance.

•   You may have issues with government support, student loans, and even tax returns if the family member is using your identity in more than one way.

•   You could obtain a criminal record if the family member uses your identity when/if arrested. You also risk being complicit in a crime if you do not report the family member who is committing identity theft.

Ultimately, the steps are the same when reporting a friend or family member, whether it’s a spouse (or an ex), sibling, parent, child, or another relative. You may face one additional task — and that’s confronting the family member before filing your reports.

The Takeaway

When someone opens a credit card in your name, that can indicate identity theft. It’s crucial that you stay calm and act quickly by filing reports with the credit card issuer, FTC, police, and credit bureaus. You may also want to add alerts to or freeze your credit. By taking swift action, you may be able to avoid long-term damage to your finances.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What happens if someone applies for a credit card in your name?

If someone applies for a credit card in your name, it’s important to remain calm and act fast. You’ll need to file reports with the credit card issuer, FTC, local police, and credit bureaus. You may want to put fraud alerts and/or freezes on your credit report and work closely with the credit card issuer to remove any fraudulent charges and close the account.

How do I stop someone from opening a credit card in my name?

While identity theft can happen to anyone, you can make it more difficult for fraudsters to open a credit card in your name by freezing your credit report. You can also put a fraud alert on your account and use credit and identity monitoring services to get notifications about any suspicious activity. Reviewing your bills, bank activity, credit score, and credit report regularly are all helpful ways to detect fraud.

Can someone open a credit card with my Social Security number?

It is possible for a person to use your Social Security number to open a credit card in your name. Thus, keeping your Social Security number private and secure is important for protecting your identity.

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Photo credit: iStock/Prostock-Studio
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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Building good credit (or any credit at all) doesn’t happen overnight. Instead, if you’re starting from scratch, you may need to have an open credit account for around three to six months before you first get a credit score.

From there, a good credit profile and good credit score can take a while to build. In reality, it can be much faster and easier to lower your credit score, which is why it’s vital to aim to make solid financial choices, like consistently paying your bills on time. Building and maintaining good credit isn’t always easy, but by following a few simple steps, you can improve your standing.

How Long It Can Take to Build Credit From Scratch?

The exact length of time it takes to build credit from scratch varies. That being said, it’s usually around three to six months from the time you first open a credit account.

Even though establishing and building credit can take time, it’s worth it as a way to improve your overall financial situation. Having good credit can make it easier to get approved for loans and secure lower interest rates.

Recommended: How to Avoid Interest on a Credit Card

4 Ways to Build Credit

If you’re hoping to begin building credit, here are some tactics you might consider.

Become An Authorized User

One way to help build your credit is by becoming an authorized user on an account of someone who already has good credit. This might be a trusted friend or family member. As they manage the account responsibly, that can have a positive impact on your credit score as well. Just know that if they miss or make late payments, that can also negatively impact your credit.

Recommended: When Are Credit Card Payments Due?

Apply For a Credit Card

If you’re getting a credit card for the first time, know that it is possible to apply for and get approved for a credit card with no existing credit history. However, you do need to be selective about which card you apply for.

You’re unlikely to get approved for, say, a rewards credit card if you don’t already have excellent credit. Still, there are credit cards that are marketed toward those who have no credit or a limited credit history. You might also consider a secured credit card, where you put down a refundable deposit that then serves as your credit limit.

If you can get approved for a credit card, and then use your credit card responsibly, such as by making on-time payments, can help you build up your credit.

Recommended: What to Know About Purchase Interest Charges on Credit Cards

Get a Cosigner

If you aren’t able to get approved for a loan on your own, you might consider applying for credit with a cosigner. Using a cosigner with good credit can help improve your chances of getting approved for a loan.

Then, your loan payments will be reported to the major credit bureaus and hopefully help you start building your credit score. Of course, that depends on your making those payments on time.

Maintain Good Credit Habits

Once you have opened a credit account like a loan or credit card, it’s important to practice good credit habits. This includes paying your statement off in full, each and every month. Demonstrating a pattern of reliably paying your bills over time shows potential lenders that you’re likely to repay your debts.

Recommended: Does Applying for a Credit Card Hurt Your Credit Score?

Factors That Affect Credit Score Calculations

There are five major factors that affect your credit score:

•   Credit utilization: Your credit utilization is the amount of the credit you’ve used compared to your total available credit. It’s recommended to keep this ratio to 30% or less.

•   Payment history: This indicates how reliably you make payments on your existing accounts.

•   Types of credit accounts: Having a good mix of different types of credit accounts has a positive impact on your credit score, as it indicates to lenders that manage multiple types of accounts.

•   Your average age of accounts: Having a lengthy credit history is a positive sign. This shows you have experience in responsibly managing accounts.

•   New credit: Opening a number of accounts or making a number of hard inquiries in quick succession can suggest to lenders that you’ve overextended yourself and are in need of funding to bail you out.

Recommended: Starting Credit Score for 18-Year-Olds

Things to Keep in Mind Before Building Credit

If you’re looking to build good credit, here are some tips on establishing credit to keep in mind.

Have a Solid Financial Plan

The first thing you’ll want to do is make a budget. Getting a new credit card should not be viewed as a way to fix your budget or dig yourself out of a financial hole. Instead, the best way to use a credit card is as a tool of convenience for money that you already have. Make sure that you have the financial ability and discipline to pay your bills in full, each and every month.

Watch Out For Scams

Usually building credit is something that you do over a period of several months or years. If someone tells you that they can build or repair your credit quickly, it could be a sign of a credit card scam. There aren’t many shortcuts to the simple rules noted above, like regularly paying your bills on time.

Don’t Open Too Many Accounts At Once

You might think that since opening a credit account can help build credit, opening many accounts will help build credit even faster. However, that is usually not the case. Many lenders view a high number of credit inquiries in a short period of time as a negative indicator. They may see it as a potential red flag that someone is in a bad financial situation.

The Takeaway

If you’re just starting out and have no credit history at all, you generally start without an actual credit score. It can take a few months after you open a credit account to start establishing a score. As you continue to show that you’re responsible for the credit you have, your score will likely increase. Building credit can take time, and you should be skeptical of any people or programs that say they can build your credit fast.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What credit score do you start with?

There isn’t a starting credit score for those without any credit history. While you might think that you start with the lowest possible credit score (like 300) and have to build your way up, you actually don’t start with any credit score at all. As you open credit cards or other accounts, you’ll start to establish a credit history and score.

How long does it take to build a good credit score?

It usually takes anywhere from three to six months to start building a credit score after you’ve opened your first credit account. You’ll then continue to build and improve your credit by continually making on-time payments. You can always check your credit score periodically to see where you’re at on your credit journey.

How long does it take to recover from a hard inquiry on your credit?

Usually when you apply for a new credit card or other loan, your potential lender will pull your credit file. This is known as a hard inquiry. Since the number of recent hard inquiries is one factor in determining your credit score, applying for credit cards can lower your credit score. However, these inquiries typically only lower your score by a few points and drop off your report after a few months.

How fast can you build your credit in 3 months?

How fast you can build your credit depends on a number of factors. Generally, it takes a few months after you’ve opened a credit account to even establish any credit. Your credit score will improve as you continue to use your credit responsibly. It’s best to think about building credit as more of a marathon than a sprint.

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Photo credit: iStock/YakobchukOlena

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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A black credit card is a financial product extending a line of credit to wealthy, high-spending consumers. Colloquial references to a black credit card typically refer to the American Express Centurion Card that launched in 1999. It quickly developed a reputation for being more than a credit card — rather, it became a status symbol of ultra wealth and almost limitless spending power.

Here’s a look at what a black credit card is in detail, how to get one, and the card’s benefits and drawbacks.

What Is a Black Credit Card?

A black credit card is an ultra-luxury private banking credit card product that’s designed to support the credit needs of the world’s wealthiest individuals, which can include A-list celebrities, professional athletes, and multi-millionaires. These are individuals who likely spend six figures a year using their credit card.

Although the black credit card meaning was originally derived from the AmEx Centurion Card, it now includes other luxury cards that have since come to the market. The list of exclusive card products include the Dubai First Royale Mastercard and the J.P. Mortgage Reserve Card.

Although the Mastercard Black Card might have the phrase “black card” in its name, it’s more accessible and arguably not in the same caliber as the aforementioned cards. That’s because consumers can submit an application online for this card without first being invited, which is more in line with typical credit card rules.

How Black Credit Cards Work

Unlike other consumer credit cards, the most exclusive black credit cards aren’t available for online applications. Card issuers publish very limited details — if any at all — about how to apply for the card or what it takes to receive an invitation. All of the elusiveness can enhance the allure of black cards.

Aside from their exclusiveness, black cards are generally known for having no credit limit, allowing members to spend freely. However, credit card issuers have already determined who they feel is financially capable of wielding the black card’s limitless buying power.

Recommended: Does Applying for a Credit Card Hurt Your Credit Score?

Requirements for Getting a Black Credit Card

Specific black credit card requirements and thresholds vary between black card products. However, they generally include the following factors:

•   Minimum annual spending

•   Income and/or net worth

•   Creditworthiness

If you believe that you meet the criteria for a black credit card, you can reach out to the card issuer directly to see if you’re eligible. American Express, for instance, may offer existing members an online form for its Centurion Card for those who want to request consideration.

Worth noting: The Centurion Card is currently said to have a one-time $10,000 initiation fee and an annual fee of $5,000 thereafter.

Recommended: The History of Credit Cards

What Kinds of Perks Do Black Credit Cards Offer?

Whether you’re still learning how credit cards work or are experienced with credit, you likely know that different cards offer varying benefits, including rewards, travel and shopping credits, and more. The perks of a black credit card also differ depending on the type of black card.

For example, the AmEx Centurion Card, offers the following black card benefits:

•   VIP airport lounges. Access to AmEx’s Global Lounge Collection, including the coveted The Centurion Lounge.

•   Travel accommodation enhancements. Upgraded bookings and credits through AmEx’s Fine Hotels and Resorts program, with 900 hand-selected, iconic properties, and elite status with additional hotel programs.

•   Airline loyalty status. Complimentary top-tier status through airline partner loyalty programs.

•   Unique experiences. Access to one-of-a-kind travel experiences around the world.

•   Travel inconvenience credit. Up to a $2,000 credit per traveler for carrier-related inconveniences, like delays, and up to $10,000 for canceled trips.

•   Travel insurance. Up to $100,000 in travel medical assistance, and up to $1 million in travel accident insurance.

•   Rental car insurance. Up to $75,000 in car rental loss and damage insurance.

•   Saks Fifth Avenue credit. Quarterly $250 shopping credit, up to $1,000 per year.

•   Equinox fitness club membership. Access to clubs in multiple countries.

•   Additional buying protection. Purchase protection, return protection, and extended warranty for goods purchased on the card.

•   Personalized support. Access to personal shoppers and 24/7 personal concierge service.

As noted above, fees, benefits, fees, and spending requirements will vary among different types of credit cards, including those that fall into the ultra-luxury category.

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Pros and Cons of Using a Black Card

As a card that’s not intended for the masses, the card’s pros and cons highly depend on which side of the eligibility spectrum you fall under. Here’s a closer look at black credit card benefits and drawbacks:

Pros of Using a Black Card	Cons of Using a Black Card
No credit limit	Accessible by invitation only
Status symbol	High initiation and annual fees
Luxury perks	High spending requirement
Tailored service experience	High income requirement

Is a Black Credit Card Worth It?

With a reputation of having excessively high annual fees and high minimum spending criteria, a black card can carry a high price tag. It’s important to consider that you can afford this kind of credit card — that is, assuming you’ve received an invitation in the first place.

Weigh the black card benefits, and consider if you’d actually be using a credit cardin such a way that it would be worth it for your needs.

Recommended: When Are Credit Card Payments Due?

The Takeaway

Black cards are typically reserved for wealthy customers who have demonstrated the ability to spend hundreds of thousands on a credit card and repay that amount with ease. If you’re an everyday consumer or it’s your first time getting a credit card, a pricey black card probably isn’t a practical credit card solution.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What does it mean to have a black credit card?

Being invited as a black card member means that you’ve met the card issuer’s underwriting criteria in terms of having a high income, high net worth, high spending activity, and more. It’s perceived as being a card that’s only accessible to ultra-wealthy individuals.

How much does a black credit card cost?

Black credit card fees vary between card products but often cost hundreds to thousands of dollars in annual fees each month. The AmEx Centurion Card, for example, has a $10,000 initiation fee and a $5,000 annual membership fee thereafter.

Are black credit cards actually black?

Generally, black credit cards are designed with a black color scheme. However, some of these cards that fall into the exclusive black card category aren’t black. For example, the J.P. Morgan Reserve card is made of brass and palladium and has a silver metal finish.

What is the difference between a black card and a platinum card?

The AmEx Platinum Card is more accessible to consumers than the AmEx Centurion Card, also dubbed the black credit card. Members who want to apply for a Platinum Card can do so on their own online, while the black card is offered by invitation only. The requirements and annual membership fees of both cards also vastly differ, with the black category charging higher fees and having higher spending requirements as well as more robust perks.

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Photo credit: iStock/Lemon_tm

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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