I remember opening my first non-joint bank account when I arrived at college. I popped into the local Wells Fargo, showed my ID, filled out some paperwork, and I was done. It was an easy process. Since then, I've opened up a variety of bank and investment accounts from the comfort of my laptop or iPhone.
Banking was easy and straightforward, I thought, so how hard could it be to set up an account in the UK after our move? We'd just walk into the nearest branch, open an account, and go from there. Cell phone service? Same thing. We should be able to check this all off in a few hours.
I was so wrong.
Moving to a new country resets everything in the world of finance. For the average person, this makes it harder to do everything from finding a place to live to getting a gym membership, and—of course—a bank account.
Here are the tips I've learned along the way that would've made things much easier for us.
1. Your credit is no good here.
I was fortunate to be taught the value of credit early in my life and encouraged to read books that taught me how money worked. I opened my first credit card during my freshman year of college for the sole purpose of building my credit. This credit made many things easier for us when it came to navigating the world of money.
Moving to a new country, as it turns out, completely resets your credit. You're back at square one. This poses a number of challenges:
I. People don't want to rent you their house without significant guarantees. Almost every rental does background and credit checks. If you don't have credit, you can expect to pay up to six months rent in advance.
II. You can't get a cell phone plan without at least three months of bank account history. Pay as you go, it is.
III. Want to lease a car? Good luck getting a good rate with no credit.
In order to have more options, we've set about trying to build our credit here. We (finally) opened a bank account (more on that below) and transferred a credit card from the US to the UK to start the process.
2. Start the process of opening a bank account BEFORE you get here.
My belief that we could just stroll into a bank and open an account was quickly disproven after our second visit to a UK bank branch failed to result in an account.
Here's what went wrong:
I. On the first visit we were told that our letter from the utility company welcoming us to our new service was 'not technically a bill' and thus would not count as proof of address. You have to have two documents from this list in order to open a bank account. We had just moved in, so we had no bills in our names.
II. We were told that we did not have an appointment so we couldn't open an account. Turns out you have to call ahead and schedule an appointment for several days in the future.
III. Once we finally got an appointment, it took over an hour to open our account. I found out later that Barclays has a process for expats that lets you start the application process before you arrive. This would have streamlined the process greatly and enabled us to get other things set up more quickly. Consider checking out the process before your appointment.
3. Use TransferWise to make managing currencies easier.
For someone who grew up in the age of ACH transfers, wire transfers feel so archaic. Why would I pay a $35 fee to send my money between banks? Unfortunately, as I have quickly learned, fees in the world of international finance are the norm.
After getting so frustrated with managing money, changing currencies, getting cash, paying fees, and so on, I figured there had to be a better way. After some Googling I came across TransferWise. As it turns out, Transferwise is one of the hottest FinTech companies in the world right now and was backed by Richard Branson.
TransferWise is an abstraction layer on top of a bank. You put your money into a unique TransferWise account which they store with a bank in your local currency. Users keep funds in currencies around the world.
Take, for instance, our recent trip to Spain. Since Spain uses euros and the UK doesn't, there is a currency-mismatch. When you want to pay for something in euros, even though your main currency is GBP, TransferWise uses a local euro-based account to fund that purchase and debits your GBP account the proper amount. Since there is no currency conversion happening (you're using an account that was stored in euros) you save big on conversion fees.
If you're traveling internationally, and especially if you're moving internationally, you should sign up for TransferWise. You can get $500 in free international transfers by using our referral link here.
4. You're limited in what you can do without a bank account.
When we were in the US, most of our subscriptions were charged directly to a credit card. That way we earned points on each transaction. Coming to the UK, we expected this to continue.
In reality, most services expect you to do a "Direct Debit" where they pull the funds directly from your bank account. Since we didn't have a bank account for the first few weeks (see challenges above), we weren't able to sign up for a gym membership, open a monthly cell phone plan, and so on.
Pay as you go for cell phones: When we arrived I spent a fair bit of time researching which provider made the most sense for our cell phones. When we finally arrived at the store, we were told that without three months of bank account history, we were not eligible for a monthly plan. We ended up having to get two pay-as-you-go numbers (which are much more expensive), while we wait for our credit to build up.
5. Contactless is the norm.
When ApplePay was announced in the US, I was sure the days of pulling my wallet out every time I wanted to pay were about to be long gone. While that reality has yet to materialize in the States, it's a modern reality in Europe.
Before we moved over to the UK, I'd come for many weeklong business trips and never pulled out my wallet. You don't need to. Just set up ApplePay and you can use contactless payments almost everywhere.
Here are just a few of the places we use contactless regularly:
- Restaurants
- Pubs / bars
- The Tube (Underground)
- City buses
- Grocery stores
- Retail stores
- Taxis
The list goes on and on. Nearly everywhere we've gone accepts contactless payments both in the UK and on the continent. Just tap your phone and you are good to go. No signing, no waiting for the card reader to beep at you, nothing.
As with any other part of expat life, international finances come with their own challenges and benefits. Hopefully, our experience can help make other expats' first few weeks a little easier.
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