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Living in the U.S. as a new immigrant can be a logistical challenge. One important thing on the to-do list is figuring out how to earn, save, and spend money. Even immigrants who arrive with funds in a bank account may find it difficult to rent an apartment or obtain a loan to purchase a car because they don’t have a credit history in the country.

For some immigrants, a secured credit card can help build credit and smooth the path to purchasing. Read on for a closer look at this unique type of credit card and how to build credit as a new immigrant.

What a Secured Credit Card Is and How It Works

A secured credit card is used like a traditional credit card, but it is “secured” by cash you deposit in the bank. The money in the account is collateral for the credit card issuer in the event that you don’t pay your bill. Immigrants often obtain a secured credit card because it’s the first step on the pathway to building a credit history. You don’t need a credit score to get a secured credit card, as you do when applying for a traditional credit card.

Security Deposit and Credit Limit

With a secured credit card, your security deposit is the amount you deposit into your bank account to “secure” what you borrow with the card. If you charge something to the card and don’t pay your bill, the bank can take possession of the portion of your security deposit that is equal to what you owe, plus any penalties. The size of the security deposit will determine the credit limit on the card.

Billing and Payments

It’s best to pay your secured credit card balance off each month if you can do so. Not only does this reflect favorably on your credit profile, but it can save you money on interest. Secured credit cards can have a fairly high annual percentage rate (APR), which is the cost of borrowing including interest and fees. The average APR on a secured credit card in early 2026 is 26.13%, several percentage points higher than the average APR on a rewards card, which is 23.66%.

Reporting to Credit Bureaus

Unlike debit cards, which draw funds directly from a checking account, the card issuer may report your use and payment history on your secured credit card to the credit bureaus that compile credit reports. That’s why using a secured credit card could be a good initial step if you’re looking to build a U.S. credit profile.

Why Immigrants Often Start With Secured Credit Cards

As we’ve seen, having a secured credit card is one of the ways to build a credit history, which is important because it will yield your credit scores — numbers that lenders, landlords, and even some employers use as a gauge of how well you manage your finances. Immigrants often start with a secured credit card because it is generally possible to obtain one even if you have no credit history in the U.S.

Immigrants aren’t the only group that can benefit from a secured credit card. People with a poor credit history might use a secured card as a stepstone to a stronger credit score. College students, who are often starting their journey as credit users, may also find secured credit cards helpful, though they might also use a credit card created specifically for students.

Lack of U.S. Credit History

Lack of a credit history in the U.S. is a primary reason an immigrant might use a secured credit card. Even if you have a strong credit score in your country of origin, it usually won’t carry over to the U.S. A new arrival to the country typically needs up to six months of payment history before one of the main U.S. credit bureaus — Equifax®, Experian®, and TransUnion® — can calculate a U.S. credit score.

Accessible Without SSN

One of the things that make a secured credit card an appealing choice for an immigrant with no credit history is that a Social Security number (SSN) isn’t typically required to obtain this type of account. Many immigrants don’t have an SSN. We’ll get into the application process, and what’s required for a secured credit card, in more detail below.

A Pathway to Building Credit

There are several possible ways to build a U.S. credit profile once you are in the country. In addition to obtaining a secured credit card, you might become an authorized user on someone else’s credit card, such as a spouse’s account.

You might also be able to obtain a credit-builder loan. Offered by smaller banks and credit unions, a credit builder loan is deposited in an account for the borrower, who pays off the loan, with interest, over time. After the money is repaid, the loan, plus interest, is disbursed to the borrower. Making those regular loan payments is a way to build a credit history.

Once you’ve been using a secured credit card — and potentially other methods — to build a credit history, you can begin to monitor your credit score to see how it changes over time. You can check your credit scores via the credit bureaus. Many banks also help account holders check their scores as well. Here’s a look at how the scores from one commonly used credit score company, FICO®, stack up.

How to Build Credit as an Immigrant Using a Secured Credit Card

If you decide to apply for a secure credit card, here’s information on what you’ll need for the application — and how to use the card once you have it.

Apply With an SSN or ITIN

If you have a Social Security number, you can use it to apply for a bank account. But a SSN is not required to open a bank account in the U.S. Instead, you might be asked for an Individual Taxpayer Identification Number (ITIN). This is a tax processing number issued by the Internal Revenue Service (IRS) to ensure that people — including undocumented immigrants — pay taxes even if they do not have a SSN.

Members of the immigrant community who might want to obtain an ITIN include a foreign national legally in the United States who is filing a U.S. tax return; a foreign national student, professor, or researcher who is filing a U.S. tax return but does not qualify to receive an SSN; a dependent or spouse of a U.S. citizen or lawful permanent resident; or a dependent or spouse of a foreign national on a temporary visa.

You will also be asked for identification. This might be a valid passport or your visa (for example, an F-1 or J-1 visa). You’ll need proof of your U.S. address, as well, and an initial deposit on the card.

Can you build credit with an ITIN number? Indeed, you can. Applying for a secured credit card is often the first step.

Use the Card for Small, Regular Purchases

Developing a credit history once you have a secured credit card is fairly simple. The first step is to use the card. Try making modest, routine purchases, such as buying groceries. Don’t spend up to the maximum credit limit if you can avoid it. Using your maximum allotted credit line signals to the credit bureaus that you might be at risk of not paying your bill. Your amount owed and credit utilization (the proportion of your available credit used) contribute significantly to your overall credit score.

Pay Your Balance on Time Every Month

As you use your secured credit card, be diligent about using your credit card responsibly. Pay your bill on time each month, and try to avoid carrying a balance.

Paying off your balance keeps your credit utilization low and helps you avoid interest charges. One way to ensure your bill is paid on time is to set up automatic bill payments.

Build a Credit History Over Time

With careful use, a secured credit card may form the foundation for your credit history in the U.S. so that you can build credit over time. “Your credit score is based on factors such as how often you pay your bills on time, how many loans and credit cards you have, what your debt is relative to your credit limits, and the average age of your accounts. It also considers negative financial events, such as judgments, collections, and bankruptcies,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi.

As time passes, you may add other forms of credit to the mix when you are thinking about how to build credit as an immigrant. A car loan, unsecured credit card (such as a rewards card or cash-back card), and eventually a mortgage might one day be part of your credit mix. Having diverse forms of credit and making on-time payments are both factors in your credit score. The length of time you have on your accounts comprises 15% of your FICO credit score, for example, while the diversity of your credit mix accounts for 10%.

Common Misconceptions

It can sometimes feel lonely to find your way in a new country. But if you are an immigrant in the U.S., you are hardly alone. In a country of more than 340 million people, 15.4% of all U.S. residents were immigrants as of June 2025, according to a Pew Research Center analysis of Census Bureau data. That’s roughly 51.9 million people, at all stages of their immigrant — and financial — journey. Some of them may find using secured credit cards to be a helpful first step.

There are some common misconceptions among new users of secured credit cards, so it’s worth understanding these before you apply for an account. Some people mistake the security deposit they make when starting a secured credit account for a fee. The security deposit is simply that — a deposit. You’ll get the money back when you close the account, provided you pay your bills on time and are in good standing.

And speaking of paying bills: Another common misconception about secured credit cards is that these cards work like a debit card. They don’t. Money is not subtracted from your checking account when you use a secured credit card. You will receive a monthly statement and you will need to pay the bill at that point. You will decide where the funds are drawn from to make that payment.

Finally, bear in mind this common mistaken belief about the ITIN you may need to obtain your secured credit card. The ITIN does not provide you with any legal status in the U.S. It’s not a work authorization. It is an official number from the IRS, but the purpose of the ITIN is to enable you to pay taxes. If you have an ITIN and don’t file taxes for three years, the number will be invalidated.

The Takeaway

For those exploring how to build credit as a new immigrant to the U.S., a secured credit card can be one good way to begin to develop a credit history. Getting a secured credit card requires making a deposit into a bank account that will serve as the security for the credit card. As long as you make your payments promptly and keep your balance low, you can make purchases, develop a healthy financial profile, and eventually expand your credit options.

As you consider a secured credit card, it’s a good idea to explore different card issuers. Ask about interest rates, any fees, and what documents are required to open an account.

FAQ

Can immigrants build credit without an SSN?

It is possible for an immigrant to build a credit history without a Social Security number, but doing so might involve applying to the Internal Revenue Service (IRS) for an ITIN, an Individual Taxpayer Identification Number. You can use this number to obtain a secured credit card, which is a first step on the path to a credit history and credit scores for many immigrants.

What’s the fastest way to build credit as an immigrant?

One way to build a credit history as an immigrant is to obtain a secured credit card, which is a credit card that is secured by a refundable security deposit. You won’t need a Social Security number or a credit score to obtain this type of card, and making regular small purchases and consistent payments on the account will show credit bureaus that you can handle finances responsibly.

Do secured credit cards work if you have no credit history at all?

Secured credit cards are a good solution for anyone who has no credit history at all. Debit cards don’t typically report users’ payment history to the credit bureaus, but issuers of secured credit cards usually do report, and this is the first step in building a credit history and eventually having a credit score.

How long does it take to build credit as an immigrant?

It can take up to six months of consistent use of a secured credit card to begin to build a U.S. credit history. Some newer credit scoring systems take less time, but if you are hoping to use your credit score to obtain an unsecured credit card or a loan, you will typically need a longer timeline.

What documents do immigrants need to apply for a secured credit card?

Opening a secured credit card involves creating a bank account where your security deposit will be held. To do this, you’ll need identification. This might be a valid passport or a visa. You’ll also need proof of your U.S. address. This could be a utility bill, lease agreement, or an official government letter mailed to you at your physical address. A Social Security number is not required, but some banks will require you to have an Individual Taxpayer Identification Number (ITIN) that you obtain from the IRS.

Photo credit: iStock/jacoblund

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 Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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There are several explanations for why your credit score might fluctuate by a few points now and then. But if you’ve noticed that your score is down by as many as 20 points, and you can’t think of any reason for this dramatic drop, it’s a good idea to do some checking ASAP. This can help you determine what affected your score and what you should do about it.

Read on for some common reasons why your credit score could unexpectedly drop by 20 points, and how you can improve and protect your score going forward.

Why Did Your Credit Score Drop 20 Points?

The fact that you even noticed that your credit score took a dip is proof that you’re paying attention to your finances, so give yourself a high five for that. If there’s a problem — a credit reporting error, for example, or possibly identity theft — you’ve got a head start on getting it fixed. And if it’s something you did without knowing it could impact your score (at least not by this much) you can resolve to do better in the future.

Even if you’re doing everything right — including paying bills on time, keeping low credit card balances, and using credit score monitoring to track how you’re doing — you can’t always know from month to month what will happen to your credit score. That’s because credit scoring systems like FICO® Score and VantageScore® use information from a credit report to assess your creditworthiness and assign it a number from 300 (the lowest score) to 850 (the highest).

If the information in your credit reports is up to date and correct, your credit score will reflect that. But it’s up to each individual lender to decide when or even if it will report information to the three major credit reporting agencies: Equifax, Experian, and Transunion. And sometimes the reports can be incomplete or incorrect. If that’s happened to you, your score may drop, or it may not be as high as you think it should be.

What Factors Impact a Credit Score?

FICO® and VantageScore® use different formulas to calculate credit scores, but the same basic factors from your credit report can move your score up or down. And some things can have a bigger influence on your score than others.

Here’s how FICO® breaks down what affects your credit score:

•   Payment history (35%): Your record of paying your bills late or on time can have the biggest impact on your FICO® Score. A spending app can help you keep tabs on upcoming bills. 

•   Amounts owed (30%):  Even if you’re managing it well, carrying a lot of debt could affect your score. This category applies to the amount you owe overall, but it puts a priority on your credit utilization. Lenders generally like to see a credit utilization rate of 30% or lower.

•   Length of credit history (15%): This category looks at the age of your oldest account, the age of your newest account, and the average age of all your accounts together.

•   Credit mix (10%): Lenders also may want to see that you, as a borrower, can handle different types of financing, including credit cards, installment loans, retail accounts, and mortgage loans. So FICO® includes this in its credit scoring formula.

•   New credit (10%): When you apply for some type of financing, whether it’s a new credit card or a new car, the lender may make what’s known as a hard credit inquiry, which could cause a dip in your score. The drop is typically small and temporary, but you might notice a bigger change if you make several credit applications at around the same time.

Should You Be Worried About Your Credit Score Dropping?

It’s normal to feel frustrated and concerned if your credit score drops suddenly, especially if you don’t understand what happened. But the good news is, it can be pretty easy to find out what’s up. If your financial institution, credit card company, or your favorite money tracker app offers you a way to get your credit score regularly, you may have access to a brief summary that explains what caused that number to go up or down. This can be a good place to start looking for clues as to why your score dropped by 20 points.

It’s also useful to know how to read a credit report so you can get the information you need to catch errors or spot identity theft. This can help you get to the bottom of what’s affecting your score and take steps to get that number back in line with what you think it should be. You have the right to request a free copy of your credit report from each of the credit bureaus once a year by visiting AnnualCreditReport.com.

Reasons Your Credit Score Might Go Down

It could be that something you did (or didn’t do) caused your score to drop, and you might not even know it. Maybe you closed an old account that you didn’t use anymore, or maybe you applied for a loan or new credit card. It’s also possible that you have an old unpaid balance hanging out there that you thought was cleared up but isn’t.

Examples of Credit Score Dropping

A combination of several factors could explain why your credit score seems to have suddenly and randomly dropped by 20 points. Here are some examples of why a credit score can go down:

You’re Using a Large Percentage of Your Available Credit

Are you close to maxing out all the credit you have available to you? Did you recently make a large purchase with your credit card that pushed you close to your credit limit? Even if you’re paying your bills on time, if your credit utilization rate is higher than 30%, it could explain a reduction in your credit score.

You Closed an Old Credit Card Account

It may seem counterintuitive (and super frustrating) that canceling a credit card  can have a negative effect on your credit. But there are a couple of reasons why closing a credit card account can lower your credit score. 

First, when you cancel a card, you reduce your available credit, which can cause a jump in your credit utilization rate. Second, closing an older account can affect the length of your credit history, which is another factor that goes into determining your credit score. It may make sense to close the account anyway if the card has high fees or if it’s hard to resist overspending. But if you do cancel a card, especially one you’ve had for a while, you can expect to see a temporary drop in your credit score.

You Made a Late Payment

Maybe you simply forgot to pay a credit card bill. Or maybe you failed to make a payment in a month when money was tight and figured you’d play catch-up with a bigger payment the next time. Either way, if the credit card company reported your late payment to a credit reporting agency, it could be the reason your credit score dropped. Remember: Payment history is the biggest factor in calculating your credit score.

You Made the Final Payment on an Installment Loan

When it comes to determining your credit score, your “credit mix” isn’t as big of a factor as your payment history or the amount of available credit you have. But if you recently paid off a car loan, personal loan, or some other type of installment loan — and your credit mix is now limited to just credit card debt — it could have an affect on your score. 

That doesn’t mean you shouldn’t celebrate your accomplishment or that you should run out and apply for another loan. But it could help explain why your credit score is lower than you think it should be.

What Can You Do If Your Credit Score Dropped by 20 Points?

There are a few steps you may want to consider taking right away if you notice a big drop in your credit score.

Review Your Credit Reports

If you find an error on your credit report, such as a payment incorrectly reported as late, the Consumer Financial Protection Bureau (CFPB) recommends filing a formal dispute, in writing, with both the credit reporting company and the entity that provided the information (such as a credit card company). By law, the credit reporting company must investigate your dispute and notify you of its findings.

If you notice signs that you may be the victim of identity theft (such as unknown accounts or unfamiliar debt), you may choose to alert the credit bureaus. You can also report identity theft on the Federal Trade Commission’s site, IdentityTheft.gov.

Prioritize Timely Payments

The biggest factor in determining your credit score is your payment history, so keeping track of your bills is important. If payment deadlines tend to get away from you, you may want to set up online bill pay to reduce your bill-paying burden. Or you can put payment due dates on a physical or digital calendar, then set up alerts on your phone so you know it’s time to pay. 

When you pay a bill, be sure to note the details, such as the date, amount, and confirmation number if paid online.

If You Can, Delay Applying for New Credit

You may want to wait until your credit score comes back up a bit before applying for a new credit card or loan. If you want to get the best interest rate or you’re worried about getting approved, you’ll want your credit to be shipshape. It also can be a good idea to avoid authorizing several companies to do a hard credit pull if you’re shopping for a mortgage, car loan, or credit card.

How Can You Build or Repair Your Credit?

If you’ve been working to improve your creditworthiness, even a small dip in your credit score can be disappointing. But you don’t have to let a negative fluctuation deter you from your goal.

How can you continue to build your credit? Besides paying your bills on time, managing your credit utilization, and having a good credit mix, you also can help lenders see that you’re a good risk by paying down high-interest debt — and keeping it paid off.

How Can You Monitor Your Credit Score?

There are several ways you can check your credit score without paying. Many credit card companies and financial institutions offer free credit reporting and scoring as a benefit to cardholders. (You may have to opt-in to begin receiving this service). If your personal information was compromised in a data breach, you may be offered free credit monitoring for a specific period of time. You also can pay for a credit monitoring service to get regular updates.

Allow Some Time Before Checking Your Credit Score?

Though credit score updates can occur at any time, checking about once a month should provide a good gauge of how you’re doing. (You can check your own credit score any time you like without any negative impact.) 

If you get a free credit score from your bank or credit card, you’ll probably receive a new score monthly. With a credit monitoring service, on the other hand, you may receive an alert any time there’s a significant change in your score or some type of suspicious activity.

Pros and Cons of Tracking Your Credit Score

Tracking your credit score can help you protect your credit and may provide added incentive to keep working on your financial health. Here are some pros and cons to consider:

Recommended: Why Did My Credit Score Drop After Dispute?

The Takeaway

A 20-point drop in your credit score can be worrisome. But there are several steps you can take to determine what caused such a significant change and then try to fix it.

It also can be helpful to be proactive instead of reactive when it comes to your credit score. By paying attention to the factors that can have the biggest impact on your credit, such as your payment history and credit utilization, you can keep working to build and protect your credit.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

Why did my credit score drop 20 points randomly?

It may seem as though your credit score dropped randomly, but there’s usually something behind a dip of 20 points or more — and it’s worth looking into. It could be a late payment, an error on your credit report, a sign of identity theft, or some other reason.

Why did my credit score drop and I don’t know why?

A change in your credit score reflects a change in a credit report. It may be that you made a late payment and you didn’t think your credit card company would report it. Or maybe you made a major purchase that changed your credit utilization rate. If you’re concerned, you may want to check your records against your most recent credit reports.

Is it normal for a credit score to drop 25 points?

A credit score can drop for many reasons. Though a 25-point dip is something you’ll probably want to check into (if you can’t figure out why it happened), there are steps you can take to dispute information in your credit report and repair your credit score.

Photo credit: iStock/milan2099

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

SORL-Q324-002

If you’re considering a new credit card, frequent travelers may benefit from choosing one that includes Priority Pass^™ membership. Depending on the airport you’re traveling through, this perk could unlock access to lounges and travel experiences that make waiting for a flight far more comfortable. Instead of sitting at the gate, you may be able to relax, work, game, eat, or even sleep in a dedicated space.

Because credit cards offer different levels of Priority Pass^™ access, it’s important to understand exactly what the benefit includes and whether it fits your travel habits. Choosing the right credit card involves weighing annual fees, perks, and travel frequently — so it pays to know what you’re getting.

What Is Priority Pass^™?

Priority Pass^™ is a global airport lounge membership that offers access to over 1,800 lounges and travel experiences worldwide. Amenities vary by location but often include complimentary food and drinks, wifi, quiet seating or sleeping areas, and even spa services.

Travelers can purchase a Priority Pass^™ membership directly, but many premium travel credit cards include membership as a built-in perk. When bundled with a credit card, the value can be significant — especially for people who travel frequently.

Benefits of Priority Pass^™

Priority Pass^™ membership is popular because it provides lounge access regardless of which airline you fly, the class of your ticket, or your frequent-flyer status. Here’s a closer look at what you can expect.

Airport Lounges

Priority Pass^™ grants access to a large international network of airport lounges and, in some airports, restaurants or rest spaces. These lounges typically provide complimentary snacks and drinks, comfortable seating, free wifi, and sometimes showers. For travelers facing long layovers or delays, a lounge can offer a calm and productive alternative to a crowded terminal.

Some lounges even allow advance reservations so you can guarantee entry before you arrive.

Recommended: Guide to Choosing a Rewards Credit Card

Private Suites

Select airports offer Minute Suites or similar private rooms where travelers can nap, work, or relax between flights. These suites typically include a daybed sofa, white noise machine, and smart TV. Priority Pass^™ members may recessive a complimentary hour and discounted rates on additional time.

Game Lounges

Certain airports now feature gaming lounges. Members can usually access a gaming station equipped with an Xbox Series X, PlayStation 5, or a high-end gaming PC, along with noise-canceling headphones and a specialized gaming chair. Many locations include one snack and one non-alcoholic drink (or one alcoholic drink for those 21+ without a snack).

Spa Treatments

At participating airports, Priority Pass^™ partners with Be Relax spas to offer eligible members complimentary, pre-flight wellness services. Options may include oxygen aromatherapy, back or foot massages, manicures, and mini facials — which can be a welcome perk before a long flight.

Free Guests

Many Priority Pass^™ memberships through credit cards allow you to bring guests into lounges. The number of free guests depends on the card. Many premium cards include free access for immediate family or up to two guests, while others charge fees for guests.

Examples of Credit Cards that Offer Priority Pass^™ Membership

Credit card perks change frequently, but cards that commonly include Priority Pass^™ membership include:

•   Capital One Venture X Rewards Credit Card

•   Chase Sapphire Reserve Reserve®

•   The Platinum Card® from American Express

•   Bank of America® Premium Rewards® Elite credit card

•   U.S. Bank Altitude® Connect Visa Signature® Card

•   Marriott Bonvoy Brilliant® American Express® Card

•   Citi Strata Elite℠ Card

Is It Better to Just Pay for Priority Pass^™

Priority Pass^™ can be purchased directly, but the math doesn’t always favor buying it outright. Here’s a look at the costs:

•   A Standard membership is $99, entitling you to a $35 per visit fee and a $35 guest fee.

•   A Standard Plus membership is $329 per year with 10 free visits, then $35 per visit; guests cost $35 each.

•   A Prestige membership is $469 per year with unlimited visits; guests cost $35 each.

If a credit card offers complementary membership at a similar annual fee, the card may provide value because it often includes additional travel benefits, such as annual statement credits, free checked bags, insurance protections, and no foreign transaction fees.

Pros and Cons of a Credit Card With Priority Pass^™

Credit cards with Priority Pass^™ have both benefits and drawbacks. Here are some to consider:

Pros

•   Enhanced airport comfort: Lounge access can make travel significantly more enjoyable. Complimentary food, quiet seating, and reliable wifi can transform long layovers or delays into productive or relaxing time.

•   Potential long-term savings: Food and drinks at airports can be expensive. Regular lounge visits can offset a credit card’s annual fee over time.

•   Extra travel perks: Cards offering Priority Pass^™ often include travel credits, trip insurance, TSA PreCheck or Global Entry credits, and strong travel rewards programs.

Cons

•   High annual fees: Previum travel cards often have annual charge fees of $395 to $895. If you don’t travel frequently, the value may not outweigh the cost.

•   Lounge access limitations: Some lounges restrict entry during peak times, and not all airports have participating locations.

•   Guest fees may apply: Not all cards include free guest access, so bringing family or travel companions may cost extra.

Priority Pass Tips

If you decide to get a credit card with Priority Pass^™, here are some steps that can help you get the most out of your membership:

•   Check the app: Download the Priority Pass^™ app to easily locate participating lounges, restaurants, and other experiences in the airport you’re traveling through. The app also gives you a digital membership card.

•   Prebook when possible: Some locations allow you to reserve a spot at an airport lounge in advance. If it’s during peak travel season or you want to guarantee a place, prebooking can be a good way to skip the line and guarantee your seat.

•   Know the access rules: While some cards with Priority Pass^™ grant unlimited visits, others may limit the number of free visits per year or restrict access to certain partners. Always check your specific card’s benefits guide.

•   Verify your card’s guest policy: If you are traveling with family or friends, confirm how many guests, if any, are included for free with your credit card’s Priority Pass^™ benefit to avoid unexpected charges.

•   Use non-lounge experiences: Many members overlook spas, game rooms, work spaces, and sleep suites that participate in Priority Pass^™. If included in your membership, they can offer excellent value, especially during long layovers.

•   Track your visits: If your membership includes a limited number of visits, you’ll want to keep track so you don’t accidentally incur charges.

The Takeaway

A credit card with Priority Pass^™ can be a valuable perk for frequent travelers, offering comfort, convenience, and potential savings at airports worldwide. If you travel often and can offset the annual fee with lounge visits and other card perks, a premium travel credit card with Priority Pass^™ membership may be worth considering.

While SoFi does not currently offer credit cards with Priority Pass^™, we do offer other credit cards that may suit your needs.

Looking for a new credit card? Consider credit card options that can make your money work for you. See if you're prequalified for a SoFi Credit Card.

FAQ

What is the advantage of having a Priority Pass^™?

The main advantage of having a Priority Pass^™ is gaining access to a global network of over 1,800 airport lounges and travel experiences, regardless of your airline, ticket class, or frequent-flyer status. This allows travelers to enjoy complimentary food and drinks, comfortable seating, free wifi, and a quiet, productive alternative to crowded airport terminals during layovers or delays.

Do you need your credit card with Priority Pass^™?

You can use your credit card to access Priority Pass^™ lounges or you can download the digital membership card via the Priority Pass^™ app. Most participating lounges will scan the physical or digital membership card for entry, along with your boarding pass. The credit card itself is generally only needed if you are using it to pay for additional guest fees or other purchases.

You generally do not need to carry the physical credit card that provides your Priority Pass^™ membership to access lounges. Instead, you can present your physical Priority Pass^™ card (if you have one) or the Digital Membership Card found within the Priority Pass^™ app. You typically must also present a valid same-day boarding pass.

Does Priority Pass^™ give you free lounge access?

Yes, for members with an unlimited-visit membership (like the Prestige tier or those provided by certain premium credit cards), lounge access is free for the member. However, guests may incur a fee of $35 per person, depending on the specific membership or credit card benefit.

For those with a limited number of visits (like the Standard Plus membership), a certain number of visits are included annually, after which a $35 fee applies per visit for the member and each guest. It’s a good idea to check the specific terms of your membership or credit card benefit to understand exactly what is included.

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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.

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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Your credit utilization ratio is a factor that represents how much of your available credit you have already used; the higher it goes, the closer you are to maxing out your credit limit, which can negatively impact your credit score.

Granted, there are several factors that make up your credit score, which is an important three-digit number that can impact your ability to borrow funds and at what interest rate. While the exact makeup and percentage of each factor varies depending on the company calculating the score, there are a few commonalities.

Since your credit utilization is one of the more important contributors to your credit score, it’s important to understand it. Here, you’ll learn what credit utilization is, how it impacts your credit score, and how to manage it.

What Is a Credit Utilization Ratio?

Credit utilization, history of payments, length of credit history, credit mix, and number of recent inquiries are among the factors that make up a credit score.

A simple way to calculate your credit utilization ratio is by dividing your current outstanding balance by your total credit limit. Your credit utilization ratio can be anywhere from 0% (you have a $0 balance) to 100% (your credit cards are all maxed out).

Generally, a low credit utilization ratio is viewed as a positive factor in determining your credit score. It can show that you aren’t living beyond your means and are managing debt well.

What Is Utilization Rate?

Your utilization rate is another name for your credit utilization ratio. In other words, it is determined by the amount of available credit you have and your current credit card balance. You can calculate your utilization rate by dividing your current balance by your total available credit. Lowering your utilization ratio can be a great way to maintain a good credit score.

How Utilization Rate Affects Credit Scores

Your utilization rate is one of the factors that makes up your credit score, along with other factors like your payment history, number and type of accounts, and your average age of accounts.

Having a low utilization rate is a positive factor in making up your credit score, so it can make good financial sense to keep your utilization rate down.

“The further away a person is from hitting their credit limit, the healthier their credit score will be, in most circumstances,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “A borrower’s debt-to-credit ratio, also known as their credit utilization rate, should ideally be no more than 30%. Higher utilization can negatively affect a person’s credit score.”

Why Utilization Rate Affects Credit Scores

The reason your utilization rate affects your credit score is that it is explicitly named as a factor by the companies that calculate credit score. Having a higher credit utilization can decrease your credit score.

It makes a bit of sense, after all: If your total balance is approaching the available limit on your credit card, you may not have the financial cushion to weather an emergency. Having a balance too close to your credit limit might also indicate that you are struggling with cost of living or impulsive buying. That can give lenders pause if you are applying for additional credit.

How Can You Calculate Your Credit Utilization Ratio?

It’s fairly simple to calculate your credit utilization ratio, as long as you know the outstanding balance and your total credit limit for all your credit cards. Then it’s just a matter of basic math. Here’s how to find your number:

•   Add up your total balances across all of your cards.

•   Divide it by your total credit limit.

•   Multiply the result by 100 to get your credit utilization ratio percentage.

Examples of Credit Utilization

Here are two examples of calculating your credit utilization ratio:

•   You have one credit card with a $10,000 credit limit, and you have a current balance of $2,000. Your credit utilization ratio is 20% ($2,000 divided by $10,000 times 100).

•   You have two credit cards, both with a $7,500 credit limit. You have a balance of $1,000 on one of your cards and a balance of $4,000 on the other card. Your credit utilization rate is 33.3% (a total balance of $5,000 divided by a total limit of $15,000 times 100).

How Can You Lower Your Credit Utilization Ratio?

There are a few ways that you can lower your credit card utilization. Consider these ideas:

Keep Credit Card Balances as Low as Possible

One of the best ways to lower your credit utilization ratio is to keep your card balances as low as possible. One way to do that is by following the 15/3 credit card payment strategy. This strategy has you make an additional credit card payment each month to minimize your average balance.

Pay Off Your Balances

In a similar vein, one way to keep your credit utilization ratio low is to avoid carrying a balance on your credit cards. If you can start the habit of paying off your credit cards in full, each and every month, doing so will help keep your utilization ratio low.

Request a Credit Limit Increase

In addition to keeping your total credit card balance low, you can also lower your credit utilization ratio by increasing your total credit limit. Many credit card issuers will increase your credit limit after you have shown a positive usage history or if your underlying financials have changed.

If you have recently gotten a salary increase or paid down other debt, consider asking your issuer to increase your credit limit. This is not to say you should spend up to that limit, however (which could cause a decrease in your credit score). Rather, the goal is to make any balance you are working on paying down yield a lower credit utilization vs. the newly higher limit.

Apply for a New Credit Card

Because your utilization rate is calculated based on your total available credit, another way to positively impact your ratio is by applying for a new credit card. If you are approved, the credit limit on your new card will then be factored into the calculation. If nothing else changes, that will lower your utilization ratio. If you struggle to manage payments on the account(s) you already have or tend to run up balances on any new line of credit you have, this probably isn’t the strategy for you. Learn more about credit cards and how to use them wisely by exploring this credit card guide.

Maintaining your total credit limit is also why it may not make sense to cancel unused credit cards. After all, a credit line, even on an unused card, contributes to your overall available credit. Bear in mind, too, that opening a new account could negatively impact your credit score as it could lower the overall age of your accounts on record, which is also part of the credit score calculation.

The Takeaway

Your credit utilization ratio is defined as your total outstanding credit card balance divided by your total credit limit. This utilization ratio is one of the key factors that contributes to your credit score. Generally, a higher credit utilization ratio leads to a lower credit score, and vice versa. If you are trying to cultivate a strong credit score, lowering your utilization ratio can be one way to make that happen.

Looking for a new credit card? Consider credit card options that can make your money work for you. See if you're prequalified for a SoFi Credit Card.

FAQ

Does high credit utilization lower credit score?

Yes, your utilization ratio is one factor that makes up your credit score, and a high credit utilization can lower your credit score. If you’re looking to build your credit score, one thing you can do is lower your utilization ratio by paying down your balance on existing credit cards or by increasing your total credit limit.

Why did my credit score drop when my credit utilization decreased?

While credit utilization is a major factor that makes up your credit score, it is not the only factor. Even if your credit utilization decreases, that may be offset by changes in some of the other factors that make up your credit score (such as late payments), causing an overall decrease.

How does high credit utilization affect credit score?

Your credit utilization percentage is among the biggest factors that make up your credit score. A high credit utilization can be a negative factor that drags your credit score down. One way to build your credit score is to lower your utilization ratio, either by increasing your credit limit or paying down your existing balances.

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SoFi Credit Cards are issued by SoFi Bank, N.A. pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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 Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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While many people use cash less often today, you can still use it to pay a credit card bill at some ATMs and retail locations, or by using the mail technique (put a money order purchased with cash, not the cash itself, in the envelope).

You might want to pay your credit card in cash if you work in a cash-based business, or if a relative hands you an envelope stuffed with bills as a birthday gift. It’s good to know that you can pay what you owe on your plastic with that money at some ATMs and retail locations or by sending a money order. Here, you’ll learn more about paying a credit card bill with cash and other ways to pay, as well as tips for keeping your credit card account in good standing.

When Should I Pay My Credit Card Bill?

Before diving into ways to pay your credit card bill, make sure you understand the billing cycle so you can better time how and when to pay a credit card bill.

•   A credit card’s billing cycle is the time between two statement closing dates. This period is usually anywhere from 28 to 31 days.

•   Another important tidbit about credit cards: A grace period for a credit card exists between the end of the statement closing date and your credit card payment due date. During a grace period, you aren’t charged any interest.

•   You always want to pay your credit card bill (at least the minimum payment) by your payment due date — for good reasons that you’ll learn about next.

Why You Should Pay Your Credit Card Bill on Time

As mentioned, you should always pay your credit card bill by the payment due date to avoid negatively impacting your credit score. Here’s what you need to know:

•   Payment history is usually the largest single contributor to your credit score at 35%. Your score may dip if you fall behind on your credit card payments.

•   If you continue being late paying your credit card, your account could enter delinquency and then default. After you’ve defaulted on a credit card, your card will likely go to collections, which can seriously injure your credit score.

•   If you can manage to pay your credit card on time and in full, you won’t owe any interest charges. So those purchases you put on your card won’t cost anything in interest.

A sober truth: Americans dole out more than $120 billion in credit card interest a year. Paying off your balance in full each cycle puts your share of that money back into your pocket.

Why You Should Pay Your Credit Card Early

You’ll carry a lower balance when you pay your credit card before the due date. This means more available credit, which reduces your credit utilization ratio. (That’s the percentage of your credit limit that your current balance accounts for.) And the lower your credit utilization, the better.

Your payment history gets reported to the credit bureaus, and a lower credit utilization figure could help build your credit score.

If you’re carrying a balance, you’re charged interest daily on your balance. So, lowering your balance by making an early payment means you’ll be paying less in interest.

Another reason why it’s a good idea to pay your credit card before the payment date is that it increases your available credit. If you were planning to make a major purchase on your card, you’ll usually have to spend within the credit available.

Recommended: Guide to Paying Credit Cards with Debit Cards

How Can I Pay My Credit Card Bill?

There are several main ways you can pay your credit card bill. Take a closer look at your options here.

Online Payments

Many credit card networks and companies offer the option to pay online. You can do this either through the card’s mobile app or by logging on to your account on your computer.

To make sure you’re always on top of your payments, you can opt for auto payment, which you may see called autopay. You can link a bank account, which sets you up for recurring monthly payments. You can choose whether you want to pay the minimum, full, or custom amounts each month. That way, you won’t have to quibble over whether you’ll remember to pay your bills. You just want to be sure you have enough money in your account to cover that payment so you can avoid the headache and fees that overdraft can trigger.

Recommended: How Do Credit Card Companies Make Money?

Over the Phone

Another way to pay your credit card bill is to call the number on the back of your credit card (or look for the customer service number online) and make a payment over the phone. Usually, this is an automated service, and you provide your bank routing and account number.

While this is a fairly convenient way to make a credit card payment, it’s easy to forget a payment due date and let it slip. There may also be a surcharge for paying this way.

By Mail

If you get paper credit card statements in the mail, you can also send payment via a check. Should you decide to go this route, you’ll need to be sure the check arrives to the credit card issuer before the cutoff time. It needs to arrive by 5pm the day it’s due or be deemed late.

With Cash

Yes, when your credit card bill is due, it’s entirely possible to pay using cash. If you’re wondering how you can pay a credit card with cash, there are typically three ways:

•   By making a cash payment through an ATM. You probably can only do so at the credit card issuer’s ATM. You select the option to send cash, then deposit the money at the ATM.

•   In-person, provided the credit card issuer has physical branches.

•   By sending a money order. Don’t put cash in the mail; instead use your cash to purchase a money order. That way if the money order is lost in the mail and hasn’t been cashed, you can cancel it.

Can You Pay a Credit Card With Another Credit Card?

Typically, you can’t use a credit card to pay off another credit card. In other words, you can’t link your credit card and make an online payment, nor can you swipe a credit card to make an in-person payment.

However, with a balance transfer, you move the balance from one card to another, usually to save on interest. In this way, you are technically using a new credit card to nix the balance from an older card, then paying down the balance on the new card. This might be helpful if you are paying off a large credit card bill and are able to obtain a promotional interest rate on the new card that is lower than the rate on your original card.

Another option could be getting a cash advance on one credit card to pay another. This, however, will usually involve a high interest rate and fees, so proceed with caution.

Should You Carry a Balance on Your Credit Card?

Carrying a balance means shouldering interest fees. Plus, you’re increasing your credit utilization, which can reduce your credit score. In a perfect world, you should aim to pay off your balance in full each billing cycle.

However, if you need to carry a balance on your credit card, make it a top priority to make the minimum payments and pay on time, all the time. Getting that bill paid on time, as noted above, can help build your credit.

When Do You Receive Your Credit Card Bill?

If you get paper statements, you can expect to receive your credit card statement at least 21 days before your bill is due. This is legally required of credit card issuers. In some cases, they might send you your bill before the 21-day mark.

If you opt for paperless statements, you can view your bill as soon as the billing cycle ends. Downloading your credit card bill from your card issuer’s app at the end of a billing period is also an option — and can be the most convenient one.

Tips for Paying Credit Card Bills

Staying on top of your credit card bill is an important part of your financial life. Credit card debt carries high interest in most situations and can spiral upward if you aren’t diligent about monitoring and paying your balance.

•   Set up autopay. The easiest way to make sure you pay your credit card on time is to set up automated credit card payments. You only need to do it once, and you can choose either to make the minimum payment, pay your monthly statement balance in full, or pick a specific amount.

•   Monitor your accounts. Mistakes can and do happen. To make sure there are no errors or fraudulent activity, comb through your transactions regularly. When looking over your statements, besides transactions you should see any refunds, credits, fees, your minimum payment, and how much of your balance remains.

•   Document cash payments. If you do decide to pay with cash, remember to get a receipt and make sure the payment shows up on your credit card statement.

•   Always pay on time. Make it a top priority to stay on top of your credit card bills. If you’re struggling to keep up, consider reaching out to your credit card issuer and seeing if it is able to move your payment due date or temporarily lower your minimum monthly payment.

•   Make early payments. You can also break up your credit card payments into chunks, and pay a portion before your due date. This will increase your available credit limit, and lower your credit usage, which can help build your credit score. Plus, you’ll be paying less in interest.

One method you can try is the 15/3 credit card payment method. You split your credit card payment in half. Then, you pay half 15 days before the due date, and the remaining half three days before.

For example, your bill is due on the 24th of the month. And this month’s balance is $700. In this case, you pay $350 on the 9th of the month, and the other $350 on the 21st of the month. This can help you knock down your debt faster, plus lower your credit utilization.

•   Make more than the minimum payment. To pay off your debt more quickly and cut down on how much interest you pay, aim to pay more than your minimum. If you receive a tax refund or a work bonus, lucky you! When wondering what to do with a windfall, why not commit to putting at least part of it toward your credit card payments?

•   Take action if your credit card debt is getting too high. If you are struggling to pay off your debt or even the minimum due, it can be a wise move to look into such options as a balance transfer credit card, which will give you a period of no or low interest to play catch-up; using a lower-interest personal loan to pay off the card’s balance; or working with a nonprofit, well-regarded credit counseling agency to find solutions. You can find more information about choosing and using credit cards wisely by exploring this credit card guide.

The Takeaway

It is possible to pay a credit card bill with cash. To do so, you will likely want to find the card issuer’s ATM or bank branch, or you could send a money order through the mail. That said, whenever dealing with high-interest credit card debt, it’s wise to educate yourself about how the billing cycles and due dates work, so you can pay off the debt as well as possible and avoid snowballing interest charges. Periodically assess the credit card you’re using and any competitors’ offers to help ensure you’re getting the best interest rate and fees available for your financial profile.

Looking for a new credit card? Consider credit card options that can make your money work for you. See if you're prequalified for a SoFi Credit Card.

FAQ

What credit cards can you pay in cash?

Can you pay a credit card bill with cash? Yes: Credit card issuers that have ATMs or physical bank branches typically will accept cash for a credit card payment. These include Chase, Capital One, Citibank, Discover, Bank of America, Wells Fargo, U.S. Bank.

How do I pay a credit card bill with cash?

You can typically pay a credit card bill with cash in one of three ways: by visiting the card issuer’s physical location and making a payment, depositing a cash payment at a card issuer’s ATM, or purchasing a money order with cash, then mailing it to the credit card company.

Can I pay cash at an ATM for a credit card?

Yes, you can pay cash for a credit card bill, provided you are accessing your card issuer’s ATM. Then you’ll need to insert your card at the ATM, select the correct payment option, and follow the on-screen directions about how to proceed. You’ll need to insert the cash payment into the ATM and get a receipt for your transaction.

Photo credit: iStock/Abdullah Durmaz

SoFi Credit Cards are issued by SoFi Bank, N.A. pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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 Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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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