The top 5 banking challenges for newcomers — and what to do about them
Moving to a new country is a big undertaking.
Unsurprisingly, it comes with unique financial challenges. At Scotiabank, it’s important to us to help newcomers settle in – financially and otherwise. So we conducted a study to better understand the financial challenges newcomers face when moving to Canada.
What we found out probably won’t surprise anyone who has moved to another country to start a new life. Most newcomers feel concerned, overwhelmed and confused about their finances and how the Canadian banking system is used.
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That makes sense. Financial regulations, practices and products can vary widely from country to country. There is a steep learning curve for everyone. We’ll walk you through our study’s five biggest banking challenges for newbies – and give you tips on how to deal with them.
The top 5 banking challenges for newcomers
Our study found that setting up and navigating Canadian banking and finance can add stress to the relocation process for many newcomers. The top five banking challenges identified by survey participants were:
High rental costs: Renting is a challenge for most Canadians – and newcomers are no different. Many newcomers arriving from countries where rents are much cheaper may be surprised by the high rent prices, especially those landing in Canada’s largest cities.
Obtaining the correct documentation and identification: Landing in a country and needing all kinds of documents and ID to set up a bank account or apply for a credit card can be stressful for newcomers.
Registration for mobile phone and credit card: Because credit scores don’t transfer between countries (and some countries don’t even have a credit scoring system), things that require a credit history, like getting a cell phone or a credit card, can be particularly difficult for newcomers.
find employment: Finding a job is always difficult. But finding a job in a country you’ve never lived before, with cultural and professional expectations you may not fully understand, is especially important.
Financial fraud through Internet and telephone fraud: A lack of knowledge of Canada’s banking system makes newcomers particularly vulnerable to financial fraud – and more likely targets for scammers.
Despite these initial challenges, our study found that newcomers to Canada take a long-term view of their financial success. Their main motivations for coming to Canada include seeking a better quality of life and future, opportunities to pursue careers in Canada, and reuniting families. These are things that pay off over time.
How to master these challenges
Based on the top five challenges of starting in Canada, here is some advice for newcomers who are looking to set themselves up for success.
Build your financial literacy
Canada’s financial and banking system is different from other countries. With new terminology to learn, it’s easy to get confused. The newcomers we interviewed wanted short explanations of Canadian banking terms that they could study to make sense of it all.
Scotiabank’s StartRight® program website has a selection of articles designed to help newcomers understand the Canadian banking landscape. You can also book a meeting with a Scotiabank advisor who is always ready to answer any questions and even explain confusing banking terms in different languages.
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Know how credit products work and how to start building credit
Credit scores were understandably frustrating for newcomers. Without a Canadian credit history, the approval process for obtaining a credit card is lengthy. Foreign workers are often required to provide payslips before they are admitted.
Scotiabank’s StartRight® program is helping to solve this problem. Newcomers can apply for their first credit card with a limit of up to $15,000 with no Canadian credit history. This can help newcomers start building their credit history as soon as they land in Canada.
Get help with online banking
The newcomers we interviewed said they needed help using online and mobile banking. They loved the idea of being able to do online banking, make electronic funds transfers, and use online investing tools, but found it difficult to visualize it all. For those who need them, we offer online tips to help people get started with online and mobile banking.
Check out the credit card options
Not qualifying for a premium credit card has been a challenge for many newcomers. Even if they had savings to cover their expenses for the card, they often lacked the documents needed to apply, or the card they wanted excluded people with their immigration status. That meant they were limited to entry-level credit cards with low credit limits – impractical when trying to pay for initial expenses, especially for newcomers traveling with families.
Map choice is important. That’s why Scotiabank offers a wide range of card options for newcomers. Scotiabank advisors can even help newcomers decide which one is best for them.
Beware of scams
Newcomers are targets for scammers because they don’t know as much about Canada’s financial practices as others. In addition, they are often looking for work or other opportunities to earn money. It’s important that newcomers learn to recognize, reject, and report the most common scams.
For example, in phishing scams, scammers often impersonate government agencies, banks, communications providers, or other businesses and send text messages asking newcomers to provide personal or financial information. Mail and credit scams also usually target newcomers. They promise financial gain for an upfront fee, but once that fee is paid, the scammer disappears.
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Getting started in Canada may not always be easy, but figuring out your finances and navigating the Canadian banking system should be. Scotiabank is committed to making the financial challenges of newcomers easier. We do this by providing resources, advisors and financial products that make newcomers’ first few days and weeks in Canada much easier. From advisors who speak your language to lending products that won’t rule you out just because you don’t have a credit score yet, we’ll help you overcome the challenges.
While we can’t help you find an apartment several hundred pounds cheaper, we can help you get your finances on track.
Are you ready to get your finances on track for your future? Come by and speak to a Scotiabank advisor.
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Disclaimer: This article is for informational purposes only. They are not to be construed as financial, tax or investment advice or guarantees for the future, nor as a recommendation to buy or sell. The information contained in this article, including information on interest rates, market conditions, tax regulations and other investment factors, is subject to change without notice and the Bank of Nova Scotia is not responsible for updating such information. All third party sources are believed to be accurate and reliable at the time of publication and Bank of Nova Scotia does not guarantee their accuracy or reliability. Readers should consult their own professional adviser for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are properly considered and action is taken based on the most recent information available.
1 Scotiabank’s StartRight program created for Canadian permanent residents aged 0-3 in Canada, international students and expatriate workers.
2 Subject to credit approval. To be eligible, you must be a participant in the Scotiabank StartRight® program. To qualify for a credit card, you must be a Canadian resident and the age of majority in the province/territory in which you reside. Your approval of a credit card and the credit limit allocated will be determined based on Scotiabank’s credit criteria, including your verifiable income and credit history (if available). The credit limit amount of up to $15,000 under the Scotiabank StartRight® program is subject to change by Scotiabank from time to time without notice. A credit history in Canada is not required to be eligible for a credit card under the Scotiabank StartRight® program. Read more terms and conditions
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