- Banking & Credit
- Checking & Savings Accounts
- How to get a Checking/Savings account
- Transferring money from Australia
- Gaining a credit score
- Checking Your Credit
- Credit cards
- Credit Card without a Credit Score
- Secured Credit Cards
- How to get a credit card
- Transferring Credit
- Rewards Cards
- Transferring money between friends
- Essential Apps & Alternatives
If you’ve come from Australia, you will discover that banking here is slower and slightly more complicated.
Cheques Checks are used in business and in some other circumstances, online banking takes between three and five business days, and as a new arrival you may meet some difficulties.
The banks that generally get recommended:
- Chase – I would say the best around. Best apps, cards, and features but can require some back and forth without Social Security (SSN); If you mention me and use this link, I get a reward and you get $150: https://www.referyourchasecard.com/18/ORK9KTV2JT!
- CitiBank – Not a bad starter as they exist in Australia too and can be used together, got the job done, and without an SSN;
- HSBC – I have an account but haven’t found much value with them. If you mention me and the code: S013500756 or take in this form when you open an account, we both get a cash bonus!);
- Bank of America – Will allow you to open an account without an SSN and generally decent reviews, so great for Australians.
Update (21st September): Nikki G. emailed in and commented “HSBC offered no global advantage. AMEX successful as customer in oz. Citibank successful as held a debit card for three months”
Checking & Savings Accounts
A “checking” account is the primary account you will open at a bank in the US (and would be referred to as a “transaction” or “everyday” account in Australia). You do actually get some physical checks in many cases, and this is your day to day expense account that is tied to a debit/credit card. This is what you want to open as quickly as possible to save yourself the pain of international withdrawal fees.
Savings accounts exist too but you won’t be able to get an interest rate above about 0.2% unless it’s been open for over a year and you know your way around. Many banks will open them up in tandem and there are no issues with doing this.
How to get a Checking/Savings account
You basically need to prove that you are here for more than just a visit and that you have an address in the US. You can sign up for a bank account without a visa, however, you will be doing it as an “Non-resident Alien” and therefore will be using your credentials from Australia.
To do this you can provide:
- (If you can) A lease or sub-lease agreement (lease is better) that is signed, dated, and includes the full contact details for the landlord (including phone number);
- Proof of address (e.g. Bank Statement/Driver’s License) in US or Australia (if they won’t open it with your US address, they should be happy to set one up with your Australian address that you can change later;
- ESTA or Visa information.
This is completely legitimate, however, may require speaking to a manager as you will possibly be told that you can’t do it just because some staff are not aware.
If you do have a Visa, you require the same documents, but if you can, you should sort out your Social Security before doing this because it will make your life a whole lot easier (the process becomes much more straight forward).
Transferring money from Australia
In MOST cases you should not use your bank to transfer money (even for example from Citi to Citi account), or really any other resource outside of the below. The rates can be worse, there can be transfer fees and you’ll be throwing your money away for no good reason.
The below do require a US bank account though, so be sure to open that account and have it working before attempting the below.
You will hear most people referring to one of two options:
- TransferWise – This is a very popular one in forums and discussion groups and is indeed very effective at what it does (referral link).
- OFX – This is also a very popular one and if you fill in this form to contact Caroline, an OFX rep who can get special rates (that should actually be slightly better than TransferWise).
Gaining a credit score
This is honestly one of the most important things you can do early on in arriving to the US. You will have attached to you (and your SSN) a report, and a “FICO” score from three major credit bureaus (Experian, Equifax, and TransUnion) who collect data from banks and other sources.
This is accessible to anyone who wants to give you something that involves credit (e.g. Banks) or relies on you for something (e.g. Rentals). This score is from 350 to 850 (!?) with anything below 550 being “Bad” and anything above 700 being “Good” or “Excellent”.
Your score starts building when you have your Social Security Number because your credit history then has an identification to attach to. It’s important that you maintain this as best as you can because, without a good one, you’re going to struggle to have any institution trusting you.
It’s important that you maintain this as best as you can because, without a good one, you’re going to struggle to have any institution trusting you.
The key factors or things to remember about maintaining a good credit score are:
- Building credit as early as possible (“age of credit history”) is important (longer = better, and this only applies to credit accounts, not checking/savings);
- If someone asks for a “Hard pull” or “Hard inquiry” on your credit, really be sure that it is essential. It effectively means they want more than just a number, and every time someone does this, it affects your score negatively (slightly);
- Credit utilization basically refers to the percentage of credit you are using of what you have available. You want to keep that below 10% where you can (e.g. If you have a $500 credit limit, only use $50 of it);
- On that, it’s also relevant how many credit facilities you have. You want to keep it relatively low, but everyone will have a different opinion of what is ideal here (I would suggest ~3).
- On-time payment history is essential. Don’t be late on any money you owe for any reason;
- The number of bad marks against your credit. Pay your bills, on-time, and frequently; and
- Your income does play a part and obviously, this one isn’t as easy. In very short: The more money you earn, the higher amount of debt you’re basically allowed.
Other important notes:
- Opening and closing checking and savings accounts do not affect your credit, but opening and closing lines of credit can potentially impact things; and
- Paying off phone bills does not improve your credit, but using your credit card to pay them and paying off your credit card does.
Katherine from Bright Lights of America has written a great article all about this too:
Checking Your Credit
In order to keep on top of what you’re doing right (and wrong), it is worth signing up for a service that can provide you with your score for free. Be very careful who you provide your information to though because there are lots of services on the internet that are less than reputable.
For that reason, I recommend Credit Karma. This will give you scores from Transunion and Equifax and let you keep on top of your score’s factors.
On these reports, you will see the factors that have contributed to your score so that you can optimize what you’re doing. You will also see any negative marks against your credit and if they’re not correct you should work quickly to have them removed as to not damage your long term score.
In general, you won’t be able to get a credit card until you have a social security number, however, once you’ve done this you can start the process relatively quickly (keep reading though, there’s a way to get a credit card without a credit score).
Most banks will offer credit if you’ve held a $2-3,000 in an account on average for 2-3 months. Once you’ve done that, you can generally start a conversation about a low-credit-limit credit card (this is true for CitiBank, and HSBC from personal experience).
BE SURE TO READ ALL THE FINE PRINT. The competition is fierce here and there are LOTS of cards that may rip you off. Pick low-fee accounts, ensure you know EXACTLY what you are getting into, and be careful. Once you have a credit card, closing it can impact your credit so you do want to be careful up front and pick your battles.
Many (if not most) people you will speak to at the major banks are there to open accounts and get your business; they are in sales. They will try to upsell as much as they can and get you onboard as quickly as possible. You are well within your rights to get up and leave with some information, so do not feel pressured. Take your time, assess your options.
Don’t take a gamble applying for credit as it counts as a hard inquiry on your credit and you don’t want to do this too often.
Credit Card without a Credit Score
It IS possible through some companies to get a credit card without a credit score! CreditStacks is one such company that offers credit cards to people who have moved countries!
For all of the information, check out my article on where to get your first credit card when you move to America.
American Express has also been known to give out credit cards more easily than some of the other banks. Here’s another link, that gives me a little credit if you do sign up!
Secured Credit Cards
One thing I’d add is secured credit cards; for me, that was the easiest way to build credit. I have a secure card with Discover
– Alex P
One alternative way to build a credit score and ultimately get a credit card is a “Secured Credit Card”. Effectively, it’s a card that has been prepaid and “secured” by a cash deposit.
Definitely, check in with your bank and ask, as this is one very effective means for those just arriving to start building a credit profile.
How to get a credit card
To open a credit account you will need (in addition to a checking/savings account with the bank in most cases):
- A proof of your address in the form of a government document, bank statement, or signed lease agreement with your landlord’s name and phone number;
- A letter from your employer (see our example) that:
- Includes your start date for work and your hours (or “Full-time”);
- Your gross income per year;
- Shows what your job is (matching Visa where appropriate);
- Details your Supervisor’s (or manager’s) name and contact details;
- Is on proper letterhead;
- Is signed and recently dated;
- Your passport and another form of ID (Australian Licenses generally work fine for #2);
- Social Security Card (original, not a copy) unless you’re using CreditStacks.
While transferring a credit score is not possible, transferring a card can actually be very possible. American Express cards have the ability to transfer over to the US from Australia and will mean you immediately start building credit. This is a massive advantage and well worth your investigation before you leave.
Start an American Express in Australia before you leave (with American Express itself, not through your bank) and you can contact them when you arrive in the US about starting a US card.
Capital One, Discover and store cards (e.g. Best Buy, Macy’s, JCrew – all of which they will try to sell you at point of sale) are also good cards for starting credit as they are easier to acquire than you would from the major banks and generally have no fees. ONE THING TO NOTE THOUGH: Be sure to check the fine print of the cards carefully to ensure that there are no fees, and most importantly know when and how you need to pay the cards off. Many of these cards pay for themselves with extremely high interest rates, so don’t fall victim and be sure to pay them off quickly.
In the US, you will get great rewards on credit cards – as much as a 4.5% payback on your transactions if you spend the rewards on travel (with Chase Sapphire Reserve) and 2% in cash (e.g. Citi Double Cash).
Once you have a decent credit score, you will want to optimize this by having 2 or 3 of the best cards. Websites like nerdwallet.com and thepointsguy.com have a lot of great information on this and will allow you to compare cards you’re thinking of.
Transferring money between friends
Essential Apps & Alternatives
There are some great apps around the place in regards to banking to make your life easier and you’ll find everyone in the US uses them frequently. Click here to go to our list.
BIG thanks to Ross E. for all his assistance in compiling this information!