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I have $66K in student debt. How can I get a credit card?


Q. I am a recent graduate with school loans of $66,000 and I keep applying for credit cards and keep getting denied. Is there a credit card that I can get with my loans? I don’t want to use the credit card to pay for the loans, I just want to build my credit so I can move into my apartment at the end of the year.
— Trying

A. There are several steps you can take to get a credit card and build your credit, even if you have a lot of student debt.

If you are getting denied on a regular basis for traditional credit cards, stop applying, said Steven Gallo, a certified public accountant and personal financial specialist with U.S. Financial Services in Fairfield.

He said the repeated denials will only hurt your credit score.

First, Gallo said, consider why you may be getting denied. Are you working, do you have an income source? Have you had delinquent payments on your student loans? Have you had any credit issues in the past?

“Based on my experience, simply having student debt of $66,000 should not be the reason for being denied a credit card unless you have no income source to show that you can pay the card off,” Gallo said.

Your only solution may be to get what is called a secured credit card, he said, noting that they are offered by many banks and lending institutions.

These cards are much easier to obtain because they require the applicant to deposit money in an account with the institution as a security deposit,” he said.
The rules for these types of credit cards vary between lenders but they all work on the same premise, he said.

“You place funds in an account, and you are given a credit card with a spending limit equal to or slightly higher than the amount deposited,” he said. “You then can use the card like any other credit card and by continuing to use it responsibly you build up your credit score and over time the bank will transition you to a traditional unsecured credit card.”

It is important when choosing a provider that you go with one that reports the card use to the credit bureaus: Experian, TransUnion and Equifax.

Otherwise, your responsible credit usage will not be recognized.

“Make sure that you carefully review with your lender of choice the guidelines for determining your credit limit and how and when you will get your security deposit back,” Gallo said. “Also inquire as to what needs to happen before you can transition to a traditional card, as each lender has their own requirements.”

Good luck with both your credit and your new apartment.

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This story was originally published on Oct. 7, 2021. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.