One of the things you will need in order to get your first US Credit Card is a US bank account. The reason for this is simple … you need to be able to pay your balance and in order to get your first card, you’ll need to be able to prove you have an account.
I’ll walk you through everything you need to know in order to get set up for a US bank account.
Keep In Mind
When I say you need a US bank account, I DO NOT mean that you need a US dollar chequing account.
It’s not the same thing.
What you need is a US-domiciled bank account, meaning that the bank is based in the United States.
Now opening a bank account without a permanent US address can be difficult so the easiest way to make this happen is to use a bank that has a presence in both Canada and the US.
Banks That Qualify
I’ll start by saying that my knowledge of banks that have both a US and Canadian presence may not be 100% complete but the two I know about (RBC and TD) will suit about 99% of my readers. Most if not all of this post will be concentrated on RBCs offerings because that’s who I use and even though I have a TD bank account, I found that the fees were much more expensive than that of RBC. If TD makes more sense for you, I would suggest making an appointment with a Personal Banker and going through your options.
One word of warning on TD Bank. They only have branches in certain US States (mostly in the NE part of the country) and Nevada is not one of them. If you do plan on using Shipito (I covered that in the previous series post), be aware that your bank and “home” address will not be in the same state, which may not be the best scenario to get approved for a US card.
As you probably know, Royal Bank is one of the major banks in Canada but what you may not know is that they also have a US domiciled bank called RBC Bank (Georgia). This is important because as I had stated earlier, you need to have a bank that has a US address in order to qualify for your first US Credit Card.
Royal Bank has been a rock solid solution for my needs as a Canadian that needs to pay US credit card bills and the fees have been incredibly low.
Once you are set up, it’s very easy to move money between your Canadian and US accounts and bill payments are electronic, meaning your credit card company typically gets your payments faster than you’re used to here in Canada.
How To Get Started
The first thing you need to do is open up a Canadian account at RBC. You can either do this online or at a branch. Though I’m a fan of doing everything online, it might be better if you did this in person with a Personal Banker because you’re going to want to open your US account at the same time.
Picking Your Canadian Account
My main bank is PC Financial because I hate paying fees, so I had no intention of using RBC as my day to day banking solution. What I was looking for was an account that allowed me to have the lowest fees possible while still allowing me to transfer money back and forth between my Canadian and US accounts.
The account that I chose to go with is the Day to Day Banking Solution. The reason was primarily that the fees were very reasonable ($4.00 CAD/month) and it allowed me to make 12 transactions per month for free. Typically, I only do 1-2 a month depending on whether I have a balance owing on my US card.
The Day to Day Banking account is the lowest tiered chequing account that RBC offers and it works great for my needs. Unless you are planning on using RBC as your day-to-day bank, you don’t need anything more extravagant.
Picking Your US Account
RBC Bank (Georgia) has a couple of options when it comes to banking, the Premium Checking and the Direct Checking accounts. I went with the Direct Checking option because it was the lowest in fees and did everything I needed it to do.
If you go with the Direct Checking and choose to do electronic statements, all you need to pay is $3.95 USD/month. This allows for 10 transactions a month and should be good enough to get you off the ground.
Transfers Between Your Canadian and US Accounts
The reason you are setting up these accounts is so that you can make payments against your US credit cards. Obviously, US credit cards require payment in US Dollars so how do you get your Canadian dollars over to your US account? It’s simple. Just do an instant transfer once your two accounts are set up.
Let’s walk through how to do that.
First, sign into your Canadian RBC account and click the link that says “Go to RBC US Banking Accounts”.
This will take you to your US bank account. From there click on “Transfer Money Cross-Border”
Then simply complete the transfer as you normally would.
Prior to completing the transfer, you will be given the exchange rate to review before you complete the transfer.
So the question you might be asking yourself is, how good is the exchange rate? Well, it’s surprisingly pretty good. You can see it will cost $6.51 CAD to get $5.00 USD. According to Google’s exchange rate of the day, it should cost $6.46 … a 5¢ difference, which is pretty great.
I find that the exchange rate is pretty fair with RBC but when you are talking about large dollar transactions, you may want to look into another foreign currency exchange option, which we will explore in the next part of the series.
Paying bills with your RBC US bank account is exactly the same process as in Canada. The only difference is that the vendor you are paying gets the payment much faster … at least that’s been my experience.
As you can see from the Recent Payments section, I made a payment of $4,628.33 on July 10th, 2017. Let’s see when AMEX receives the payment.
Same day. Pretty impressive!
RBC has been a fantastic partner for my journey into US credit cards and you can even get your first US credit card from them if you so wish but I believe there’s a better option, which we will cover a couple of series posts from now. There may be other cross-border banking solutions that fit your needs but based on my research and needs, RBC checks all the boxes.
We tackle the last pre-requisite needed in order to get your first US card – obtaining a US phone number.
Also published on Medium.