A Social Security Number (SSN) is required to open up a new credit card account in most cases. A person who doesn’t have this form of identification can open up a credit account, but is subject to different rules. This article explains how is a person who doesn’t have a SSN or a bank account can gain access to a similar product to a credit card.
Under the provisions of the Patriot Act, banks and other financial institutions are required to collect information about the identity of people who apply for bank accounts and credit cards, including the individual’s SSN. The institution is required to store the information in a manner that will allow government agencies to search for names appearing on terrorist suspect lists or those of known members of terrorist organizations. The institutions will collect the customer’s name, address, date of birth, SSN and driver’s license number for this purpose.
About Social Security Numbers
A Social Security Number may be issued to a United States citizen, permanent resident or temporary resident. It is used to keep track of individuals in the country for taxation purposes. The card may also be used as a means of identification.
The card has been in use since 1936. From that time until approximately 1986, most people in the United States didn’t have Social Security numbers until they reached their early teens. The usual practice was to apply for one when the young person started earning income or was able to look for work. In 1986, legislation was passed requiring all residents over the age of five to have a SSN in order to be claimed as a dependent on a parent’s income tax return.
Getting a Credit Card Without a Social Security Number
When a person applies for credit, the SSN is used to obtain a credit history. This information is used to determine whether the individual has developed a history of making their payments on time. Without the SSN, a credit card issuer is unable to access this important information.
A person who wants to get a credit card without a SSN will need to put up a deposit equal to the amount of the credit limit they wish to have as security.
The funds are deposited into an interest-bearing account. If the customer fails to make his or her payments on the account, the funds are used to settle the debt.
An alternative available to a person who doesn’t have a SSN is to apply for a prepaid debit card. These products aren’t credit cards, but do look similar to one. They carry a Visa, MasterCard or Discover logo but aren’t associated with a bank.
The account holder can reload the card whenever funds available get low and continue using it. It’s a good idea to ask about fees involved before setting up this type of account. Some companies offering this alternative to a credit card will charge a fee every time the account is loaded, and customers need to understand exactly what they are getting before activating the account.
Finding the Right Credit Solution
People who aren’t documented or who don’t have a bank account may need to look at prepaid debit cards or secured credit cards for their needs. There are various options available, and each company will have different rules regarding fees or interest rates.
A person who is getting a secured credit card will likely be charged a higher rate of interest than someone who qualifies for one without this extra provision. Since a credit card is required for shopping online or making hotel reservations, this is an option for people who don’t qualify for a card otherwise. These cards can help those who are waiting to get permanent residency status get access to credit.
Banks and other companies are trying to attract the large market of people who traditionally have been using check cashing companies because they don’t have a bank account. Some of them will offer a person who has established a history by opening an account and keeping it current for a number of months a credit card without having to produce a SSN. These institutions are likely to be found in areas with large immigrant population.
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