Credit Cards for Immigration: How to Avoid Fees and Maintain Financial Flexibility

Introduction: The Hidden Costs of Using Credit Cards Abroad

When you emigrate, your credit cards don’t automatically adapt. For example, most Canadian-issued cards operate in CAD, meaning every foreign transaction goes through a currency conversion—often with high fees and poor exchange rates.

Here’s what many people don’t realize:

• Foreign transaction fees (typically 2.5–3.5%) stack on top of the bank’s exchange rate markup.
• ATM withdrawals abroad may carry additional cash advance fees (up to 5%).
• Some cards block international transactions unless you notify them in advance.

If you’re moving long-term, these fees can add hundreds (or thousands) of dollars in unnecessary costs. Therefore, be aware. Aim to get a credit card in your new home country. Then be sure to use the right credit card for the right situation.

Part 1: Avoiding Fees When Spending Abroad

I present the below as two options but ideally you should do BOTH.

Option 1: Get a No-Foreign-Fee Credit Card (Before You Leave)

Some cards waive foreign transaction fees. You can do your research to see which ones as they change from time to time. When you first arrive in your new home country, before you even have the chance to open a local bank account and apply for a credit card, you probably have some expenses to pay such as booking a hotel or paying for a few meals here and there. In general, I would try to own a no-foreign fee credit card whether you are looking to emigrate or not. It’s useful when travelling.

Pro Tip: Apply for these cards while you still have residency in your current home country—approval is harder once you’ve moved, especially if you don’t have a Canadian address. This goes to show the power of planning ahead. Yes if you have relatives or friends you can still try to have the card mailed to them but it’s a hassle isn’t it as you still need to rely on that person to mail it to you.

Pro Tip #2: Get a no annual fee card. Many of the annual fee cards are actually good but requires a minimum level of spend in order to be worthwhile. Once you leave, you don’t want to feel committed to spending a certain minimum on this card.

Option 2: Open a Local Bank Account + Credit Card

Once you arrive in your new home country:

1. Get a local bank account (required for utilities, rent, etc.).
2. Apply for a credit card (even with a low limit) to start building credit history.

Warning: Some countries (like the U.S.) require an SSN/ITIN or proof of income before issuing cards. The rules of each country will differ but most countries will allow you to open a bank account as long as you have a valid residency status and the associated document to prove it. Then whether they will approve your credit card would be up to their discretion.

You obviously want to have a local credit card once you arrive because you need to settle payments in the local currency which would avoid all foreign transaction fees on your old home country credit card. Furthermore, you can review local cash back/rebate offers. Sometimes if your vendor is classified as “foreign”, the transaction may not qualify for the same rewards as the local vendors.

Part 2: The Challenge of Building Credit in a New Country

Most emigrants face a catch-22:

• In some countries, a credit check is required for things like rental or even getting a phone plan
• But you can’t get credit without a local financial history.

Solutions:
✅ Use secured credit cards (backed by a cash deposit).
✅ Ask your new bank for a ‘starter’ card (some offer basic cards for newcomers).
✅ Leverage your credit history via a global bank (some global banks, like HSBC, may recognize it).

There just isn’t a way around it. You might have to settle for a low credit limit card until you build your credit history. This is why long before you move, your choice of banking is important. I had the fortune of using a global bank such as HSBC. If you’re American, many banks like Citi would have branches all over the world. Besides issuing credit cards, banking with a global institution can make transfer of funds to and from easier.

Pro Tip: In lieu of proof of income, some banks may be able to issue you better cards or improve your credit limit if you have enough assets with them. For example, HSBC has regular customers and also Premier customers. Premier requires a minimum level of assets. Once your status is Premier, you almost automatically can qualify for their Premier tier of credit cards. Most major banks have similar structure for VIP customers.

[Canadian Emigrant Tip: I use HSBC which has global reach. They were able to issue me a credit card with no problem since I have a credit history with HSBC Canada (which got bought out by RBC before I left).

Part 3: Why You Should Keep a Canadian Credit Card

Even after leaving, maintain at least one Canadian card for:

• Paying Canadian bills (phone, subscriptions).
• Emergencies (e.g., unexpected travel back).
• Credit history preservation (useful if you return).

I highly recommend keeping your old phone number. These days many services require two factor authentication and this often means sending a one time code to your phone. Most of these services do not support a foreign phone number. For this reason alone, you need to keep some money (and your credit card) in order to keep paying your phone bill. Besides phone code verification, you never know who might leave you an important voicemail.

My Setup Summarized:

• I keep a no-fee Canadian card issued by my Canadian bank.
• I use it only for Canadian expenses (namely Canadian phone plan).
• I set up automatic payments from my Canadian bank account to avoid missed payments.

Credit cards do expire. Talk to your bank about whether you can get it renewed after you move. Alternatively, give yourself more time by applying for a new card (and activating it) before you leave. Many new cards don’t expire for 5 years so you have a lot of time.

Key Takeaways

1. Ditch high-FX-fee cards before moving (or get a no-FX-fee alternative).
2. Start building local credit ASAP—even with a secured card.
3. Before moving, establish banking relationship with a global bank that has branches in your new home country
4. Keep one Canadian card for flexibility and emergencies.