Primary Account – Host Country
Opening a host country bank account will mean that you are starting to establish a credit history and financial record at the earliest opportunity, which (providing you manage it well) will mean that you have access to a wider range of financial products and preferential interest rates earlier – especially important if you plan to buy a house or car in your new location.
To open a bank account, you will be usually required to provide at least the following:
If you can research these requirements before you go, your life will be considerably easier – other assorted documentation that I’ve been required to provide over the last 10 years include proof of employment and a marriage certificate – not documents I keep about my person – so it’s always helpful to have that information to hand, and not safely stowed in your sea shipment.
You are looking for a some key services in your banking institution, the most important being access to a real person, either within a branch or at the end of a telephone, who has authority to make decisions. Get the direct number of the branch when you open your account, as all the literature that will be given will be for an automated call centre – no fun at all. You will also need a check book and debit card, and if your bank offers online banking and bill payments, all the better. Make sure you also get a written copy of the details you need to make international fund transfers. These are usually a ABA number or swift code, a full account number (many are abbreviated for internal use) and a non-PO Box address for the bank. Most banks use a PO Box for general correspondence, but this won’t be accepted as the bank address when you try to transfer money internationally. Keep this information in a safe place, as it will usually not be stored on the banking system, so you’ll be required to produce it every time you make a wire transfer.
Within the US and the UK, Credit Unions offer an excellent option – insured banking services with a non-profit remit – and are provided by everyone from local towns and cities to corporations. Check which ones you may be eligible to join (sometimes it just requires an introduction from another member) and then decide which best meet your needs.
Once you have your account open, consider applying for a credit card immediately, to start establishing a credit history, and generally make life easier. Many businesses that you will be using (hotels, car hire etc) require a credit rather than debit card for deposit, and having a local one not only avoids more foreign transaction fees, but also gives your credit the longest possible history. It may seem irrelevant now, but when you start applying for mortgages, car loans or any other loan, interest rates are governed by your credit score, and the longer your account has been in good standing, the cheaper your loan will be. You are probably already aware that your credit score is made up of a number of factors, one of which is the credit use / credit limit ratio. Your first card will have a tiny limit, so even a Starbucks will have impact. You can counter this by ‘loading’ your card with money before you spend it so that you never carry a negative balance. Friends of mine use this as a simple form of budgeting – putting a weekly amount on the card and using that to govern their spending – and the low credit line works to your advantage by limiting the amount of credit card fraud you are exposed to. And if you are really savvy, get a credit card that has rewards that you will use – travel rewards or cash back, for instance – so you get paid to carry the card, rather than vice versa.
As a final piece of advice, keep a home country card if possible, so that you don’t incur huge foreign currency fees every time you visit home or buy gifts for loved ones left behind. If that’s no longer possible, start shopping around for cards with no or low international charges.