Moving to the US has made me realize one thing – it is never a good idea to take anything for granted. And thus I have started living in the present even more.
Back home, I never thought to get a loan for buying a car, or a house will ever be a problem. Even credit cards are so readily available at our disposal. Once I started working, or for that matter, when bae started working – I don’t remember a time when getting an AMEX card or any credit card with good rewards was a challenge. Neither was opening a bank account.
However, after moving here, I miss every spam call about getting a credit card and opening a bank account.
First and foremost, I don’t understand the idea of saving and checking account at all, and you get both once you go to the bank. Like it’s not optional. Checking account is for your regular and daily transactions, with very low or no rate of interest. While a savings account is for all your savings – just like deposits in India. You might think that savings must have a high-interest rate. NO. It’s somewhere roughly between 0.01 to 0.05 per cent. So, the idea is basically to confuse people to have this system of banking.
Having a bank account is indispensable here. Most of the transactions happen via the cards or online. I don’t think I have ever seen bae visit an ATM or use cash.
Opening a bank account for an alien is not easy either. First, no matter how many state-issued identity cards you have, your passport is required. Second, your passport alone is not enough. SSN or Social Security Number is the most important thing. And the SSN talks about your employment status as well – whether you re allowed to work or not. For many aliens, employment status comes along after some months(or maybe years) after you move. And getting that changed in your card is again not an easy task. Trust me; no Government office is a pleasant scene – be it India or the US. So, I lived here without a bank account for the first six months – because I didn’t have a Social.
Banking transactions are smooth. But are they secure? That is a very debatable topic.
Depositing a cheque is as simple as scanning an image on your phone. Yes, I am not kidding. So no bank visits or drop boxes are required. At the same time, wire transfer is something I don’t find very secure as the NEFT/IMPS in India. We are so used to these things that everything else seems insecure. Every branch has a routing number, just like IFSC code. However, anyone can request money from your bank account if they know your routing number and the account number – without any authentication steps. This is why apps like Paypal and Zelle are used extensively. These apps were like an add-on in the personal banking landscape in India, but here they are like a necessity. By the way, I did not use the apps back home – only the bank apps!
Let’s come to credit history. I can not get any loan yet because I don’t have a credit score. Now, for a credit score, you need to have some investments and credit cards in place. But getting a credit card is as tricky as a bank account. My bank did not give me a credit card because I don’t have a credit score – not even the primary card with no rewards. And there is no such thing called a joint credit score. That was a shocker in the beginning, but I guess it’s reasonable and legit. Banking is more like a commercial product in India. Anyhow, you need to keep buying things on credit, pay your credit card bills on time, refrain from applying to multiple credit cards, and what not to have a good credit score.
The reward cards (not the membership cards) of almost every retail outlets (oh yes, I support capitalism) give a massive discount but are subject to your credit history check. So, the US is not as cheap! And I, or bae, did not know in the beginning that the hard enquiry (every time you apply for a new credit card – including the reward cards) affects your credit score and we had applied for tens of card. So yeah, that is again pretty screwed.
The one-step or two-step authentication, which requires an OTP, is not there for any online transaction. So yes, that is scary and insecure, you will think. But at the same time, the turn-around time for fraud liability is very little here, so your money is safe.
As a new immigrant, these things are very complex to understand, hard to adapt to and very different from the ‘normal’. However, as you dig deep into the financial system of this country, you realize the benefits it has to offer to its citizens are pretty commendable.
Fun fact: Did you know that your credit score can predict how long you will be married? I am not kidding. There is a Federal Reserve study around it! And there are dating sites which mint on this idea. They find you a suitor by matching your credit scores!