Sooner or later, foreigners living in the United States will have to contact American banks to open an account, order a card or get a loan. Paying bills, transferring or receiving money, buying on credit - for all this you need to become a client of an American bank. You can find the latest information about any US bank at https://usa-banks.info/bank-of-america/
Opening accounts and receiving bank cards
The simplest and most common service for which the population turns to banks is opening all types of bank accounts and receiving debit cards. Opening an account and using it is the first step to establish relations with a financial institution, which can subsequently facilitate the process of obtaining a loan or credit card.
A checking account is the most sought after product. Foreign citizens living in the United States can open a bank account in almost any American bank with only a few documents. An account will be needed to pay for utilities, any bills for study and teaching materials, receiving or transferring money, including from abroad. Scholarships and grants for students and salaries for employees are credited to the bank account. You can deposit funds into or into a current account, as a rule, at any time.
A saving account (saving account) will allow you to save money, save and receive interest on the amounts placed on it. A savings account is a long-term deposit. Very often, the withdrawal of money cannot be carried out instantly, as from a current account.
When opening a current account, you can order a debit bank card of one of the three largest payment systems: VISA, MasterCard, American Express. The current account will be tied to this card, with the help of which all financial transactions are performed.
By comparing the rates of several banks, you can choose the most suitable one from them. In each bank, the fees for opening and servicing accounts, issuing cards and financial transactions (for example, interbank transfers or converting) will be different. It is also worth comparing the timing of payments, cash withdrawals and other indicators. Students can turn to the International Student Office of their college and ask if any special conditions are offered to students for service at specific banks.
Despite the fact that now you can open an account even by phone or online, foreigners will have to personally come to the branch of the selected bank and bring the necessary documents with them:
valid passport;
Form I-94;
Form I-20 for students, DS-2019 for participants in international exchange programs or Form I-797;
another identification document (birth certificate, state rights, for students - Student ID or other);
confirmation letter from the university for students or from the employer for employees;
a completed bank application indicating the name, surname, date of birth, phone numbers and addresses (university, hostel, employer, home)
W-8 BEN form for students without a Social Security Number and TIN.
Checks
In the USA, a system of cashless payments by checks is very common. When buying or selling something or when providing paid services, the buyer or client writes a check to the seller or service provider. In turn, the recipient of the check can cash it.
The scheme is as follows. The owner of an account with an American bank can order a checkbook, which can be used for cashless payments. The checkbook contains the required information: account number, bank code, name of the holder and his personal information. In fact, a checkbook, like a bank card, is tied to a specific bank account. When paying for goods or services, the owner of the checkbook fills out the check, signs it and indicates the amount (cost). To receive money on this check, the recipient contacts the bank where the account is opened and the check book is issued, and presents the signed check. The indicated amount is withdrawn from the account and issued to the recipient.
The peculiarity of this system is that very often the bank does not immediately issue the requested amount in cash, but credits it to the recipient's account and only then cash it out.
Credits and credit cards
Loans have long been firmly embedded in the lives of Americans. Due to the simple receipt procedure and low interest rates, it is very convenient to use credit products for various needs. But a foreigner will have to spend some time and make some efforts to get his first American loan.
The first thing to do this is to have an SSN. A social security number is issued to those who have the right to work in the United States and are required to pay income taxes. Everything is simple for employees - the employer will prepare all the documents necessary for obtaining a social security card. And for students there is another possibility - work on campus or paid internships.
After receiving the SSN, you can contact one or two banks and apply for a credit card. Choosing a bank is based on the proposed interest rates and other conditions.
To increase the chances of obtaining a credit card, especially for students and those who first contact the American bank for this service, you can order a so-called secure or insured credit card (secured credit card). This is a credit card that the client insures with his own deposit. That is, the client pays a certain amount of the insurance deposit for the card. The credit limit for the card issued will be equal to the amount of this deposit. If suddenly the borrower cannot repay the debt, the deposit will be debited to the debt.
Credit card - the first loan product that a foreigner can count on. In addition, the correct, reasonable and active use of it will help to build a good credit history, necessary for applying for more serious loans (to buy a car or real estate).
Also in the US, consumer loans and purchases are popular. But in most cases it will be difficult to get them without a well-formed credit history.
Credit history
A credit history is data on all a person’s credit operations: when and what kind of loan product was issued to him, when payments were made, whether there were delays, if debts were repaid, and so on. Based on this information, the credit history is characterized as bad, average, good or excellent. It is clear that the better the credit history, the more chances the borrower has to get not only a loan for any purpose, but also better conditions for it (for example, a lower interest rate).
Almost any factors affect the credit history: the correct and regular use of credit cards (do not “go negative” at the credit limit, do not be late with payments and so on), timely payment and repayment of loans for purchases, lack of debt for utility bills or other payments, how much money is spent and others. Also, to build a good credit history, it is important to have other accounts, for example, a deposit account. All this shows how reliable and solvent the client is.
To build or improve a credit history, you can open a secured credit card. Despite the fact that the credit limit is insured by the borrower's own funds, all operations with this card are reflected in the credit history. In addition, banks are more likely to issue a secured credit card to a new client who does not yet have a reliable reputation and a high level of trust.
Credit score
In credit history there is such an indicator as credit score - solvency rating. It is calculated in points from 300 to 850. The higher the score, the higher the rating of the borrower. It increases or decreases as you use credit cards and other products.
It is important to know that when concluding many transactions (buying on credit, renting real estate and others), the credit history and credit score are checked, and when checking the credit score is slightly reduced. The more they check it, the lower it falls. This is due to the fact that the client becomes potentially less solvent for potential lenders, since payments on a future transaction will fall on his shoulders. But this fact has practically no effect on the real possibility of concluding these transactions (obtaining a loan, a mortgage, renting a house).
Mortgage
US banks offer several mortgage lending programs. But foreign citizens who do not have resident status or green card, can use one - the usual mortgage, or traditional (conventional) mortgage. In different banks, the traditional mortgage lending program may be called differently. With such a mortgage, the bank gives out only 80% of the value of the house or apartment. 20% - the borrower's own money.
To apply to the bank for a mortgage, you must have a TIN, social security number, good credit history and high credit score, bank accounts, including deposit accounts, and, of course, official work that brings a steady income. The better the indicators, the higher the chances of getting a mortgage and even a lower interest rate on it.
The mortgage loan term in the USA is 15 or 30 years. And when calculating the interest rate and other conditions, the desired period is taken into account. The shorter the term, the better the conditions, but the greater the monthly payment of the principal debt.
The interest rate on mortgage loans in US banks averages 3.25% -4% per annum. But in fact, this indicator is calculated separately for each borrower and depends on credit history, solvency, income level and other factors.
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