I was recently asked how Americans can start building some credit history in Canada.
Newcomers to Canada and students are in a very similar situation where they have minimal to no credit history. So they have to start somewhere. There are several ways to get started. This is how I got started. I walked into a bank, locked in a some money into a guaranteed investment certificate (GIC) and was issued a secure credit card. At the time, I was given the CIBC Shoppers Optimum Visa (has since been discontinued). I used this opportunity to start building my credit history.
Secure Credit Card with a Branch
Getting a secure credit card is the easiest way to get started. The catch is that you do have to lock in some money for a certain period of time before you can access it (without penalties). This is done more on a case by case basis. You can do this by walking into a branch and talking to a financial advisor.
Every bank has their own secure credit cards. But alternatively, I would push them to give you one of the normal credit cards instead, so that you can get some rewards. Check out our list of top student credit cards list as alternative options to secure credit cards.
The catch is that they may generally ask you to lock in at least $5,000. That is not always possible for everyone, so there are alternatives.
Secure Credit Card with Capital One
If you do not wish to deal with a bank in person or cannot lock in enough secure funds, you can also go through Capital One, as they have several options to choose from:
All 3 credit cards require an annual fee. So this would not be my first choice. Furthermore, they offer no rewards either. But if your bank does not want to offer you a credit card, this may be the alternative option.
American Express Global Transfer
American Express actually has a program that helps existing credit card holders facilitate new applications after you moved to a new country. Fortunately, Canada is on the list of eligible countries for the Global Transfer. So definitely look into this option if you already have history with American Express.
Other countries include:
- Hong Kong
- New Zealand
- United Kingdom
- United States of America
Be sure to familiarize yourself with how the credit scoring system works in Canada. Build a good history and get the ball rolling towards maximizing your rewards!