Getting US Credit Cards for Canadians [2019]

This is a 2019 update to my comprehensive US Credit Cards guide which was originally published in November 2017, covering the latest developments like mail forwarding services, Nova Credit, ITIN strategies, Chase 5/24, etc.

My intention is to keep this article updated consistently as time goes by to cover the ever-changing landscape of US credit cards.


In this article, I’m going to discuss how savvy Canadian consumers can go about obtaining their very first US-issued credit card.

Once you get your first card, you’ll start building credit history in the US, and eventually you’ll be eligible for most, if not all, of the credit cards in the US marketplace.

Whether you’re looking to rack up the sky-high signup bonuses on US credit cards to travel the world, or searching for a comprehensive USD spending solution, having access to US credit cards as a Canadian can be useful in many circumstances. Here’s how to get your US credit file up and running.


Step 1: Get a US Address

You’re going to need to have an address that’s domiciled in the United States. If you have family or good friends down there – lucky you! As long as they agree to let you use their address, you can ask them to forward your mail periodically, pick it up yourself when you visit them, or simply ask them to take pictures of your mail and send it on to you.

For the rest of us, getting a US address is as simple as using a mail forwarding or mailbox service. I personally use 24/7 Parcel, which has facilities in Washington State (close to Vancouver) as well as Niagara County in New York (close to Toronto, Montreal, Ottawa, etc.)

While 24/7 Parcel mainly offer parcel receiving and pick-up services, the Niagara Falls location will also forward your letter mail for US$1 plus postage per envelope (typically US$2.15 in total for letters to Canada). 

They do charge an annual fee of US$90 per year; however, Prince of Travel readers can obtain a US$20 discount by mentioning that I referred you to the service. Click here for more details about 24/7 Parcel and the US$20 discount.

247-parcel-logo

There are also other mail forwarding services out there you can choose from. Keep in mind that certain services, like Shipito or MyMallBox, were once popular with Canadians looking to get US credit cards, but have since changed their policies to no longer forward credit cards in the mail.

No matter what mailbox service you pick, make sure to verify one thing. Go to the USPS address lookup tool and enter the address of your mailbox, and make sure that “Commercial Mail Receiving Agency” isn’t marked as “Y”. That’s because many credit card companies will deem these addresses ineligible once they see that it’s registered as a mail forwarding service.

As long as the “Commercial Mail Receiving Agency” line is marked with a “N” (as is the case for all three of the above mail forwarding services), issuers will recognize the address as a residential address, and you’ll be good to go.

247-Parcel-USPS-Lookup


Step 2: Get a US Bank Account

You’re going to need a US bank account to pay off your US credit card bills, so let’s set one up. This step is easy – several Canadian banks have subsidiaries in the US, and if you bank with them on the Canadian side, it tends to be a pretty straightforward process to set up an account in the US as well.

I personally use CIBC for my personal banking in Canada. Their US counterpart, CIBC US, offers a Smart Account account that has a monthly maintenance fee starting at only US$4.95 (covering up to 12 transactions).

That’s a solid proposition in my book, and it’s really easy to get set up if you’re an existing CIBC client with Canada (you can apply online and also transfer US funds in-between your Canadian- and US-domiciled CIBC accounts instantly online). 

The equivalent holds true with TD Canada Trust and TD Bank (their Convenience Checking account is a very affordable option), BMO Bank of Montreal and BMO Harris Bank, as well as RBC Royal Bank and RBC Bank. All of these banks have very well-established Cross-Border Banking products and guidelines, so simply go online to get more information on their personal checking options and to open an account.


Step 3a: American Express Global Transfer / Nova Credit

Once you have a bank account and address, you can actually start applying for cards now. You need to open a few accounts to start building credit history from scratch, and the easiest way to do so is via American Express. Amex is a global company, and they offer their cardholders an easy way to transfer their membership to another country whenever they “relocate”.

To be eligible for American Express Global Transfer from Canada to the US, you need to have at least one Canadian American Express account that’s been open and in good standing for at least three months. Then, you can either call the Global Transfer number and tell them you’d like to do a Global Transfer to a US credit card, and then proceeding to complete the application over the phone…

 
 

…or you can use a service known as Nova Credit to apply directly using your Canadian credit information. To do this, open up the Amex US application form, and then click “International Cardholder” where it asks for your Social Security Number. You’ll be prompted to log in to your Canadian Amex account, and the application will continue from there.

Which Amex US product should you pick as your first American credit card? While the six-digit signup bonuses might seem dazzling, I’d actually recommend starting out with a basic Amex credit card with no annual fee, such as the American Express US Blue Card or the American Express US Hilton Honors Card. That’s because this is going to be the oldest account on your US credit history, and you’ll be helping your credit score the most if you keep this account open forever.

 
American-Express-Blue-Card-US
 

It’s also worth noting that business credit cards do not report to personal credit bureaus in the States, so they don’t help you build credit history and therefore wouldn’t be a good choice as a starter US card. Moreover, business credit cards can’t be obtained using NovaCredit either.

Regardless of whether you go through Global Transfer or NovaCredit, Amex will ask for details like your your address in the US (which you already have), your employment information (putting your Canadian employment details will be fine), and a US phone number (US and Canadian phone numbers follow the same format, so...)

They might ask you for further address verification, at which point you can show them your US bank account statement. See how everything ties together nicely?

As long as your Canadian Amex account is in good standing, there’s not really any credit evaluation that takes place – you don’t have a US credit file yet, after all. Therefore, your brand-new US-issued credit card should make its way into your hands within a couple of weeks!

Congratulations, your US credit history has just been "born”!


Step 3b: Cross-Border Banking with the Big 5 Banks

Another way to get your first US-issued credit card is again via the US personal banking arms of the big Canadian banks.

CIBC US, TD Bank, BMO Harris Bank, and RBC Bank in the US will generally allow you to apply for their credit cards based on your Canadian banking relationship, as long as you have a US address. You can even ask them to deliver all communications (including the card itself) to your Canadian address, for added convenience.

However, note that unless you have an SSN/ITIN in place, you’ll likely have to do the application over the phone, since the online applications typically have a mandatory SSN/ITIN field.

TD Bank’s Aeroplan Visa Signature, offering a signup bonus of 25,000 Aeroplan miles with a first-year fee waiver, is a particularly good shout. 

 
TD-Aeroplan-Visa-Signature-US
 


Step 4: Get an ITIN

While it’s easy to get your first credit card with Amex US or one of the Big 5 banks’ US arms, you’ll need to have a credit file identifier if you want to eventually move onto the other American issuers, like Chase or Citi. 

Just like Canada, personal credit reports in the US are associated with a unique identifier – typically a Social Security Number (SSN), the equivalent of our SIN. If you already have a SSN as a result of being born, living, or working in the US, once again, lucky you! Forget about this step, find those mouthwatering signup bonuses, and go forth and conquer!

A brief caution: some people in the past have simply used their Canadian SIN as a substitute for the SSN on credit card applications. This is a strongly discouraged practice, since you could inadvertently be engaging in identity theft, if your SIN happens to be the same as some American person’s actual SSN.

For the rest of us, we’re gonna need to put in a little bit of work here. In addition to the SSN, credit card companies also accept what’s known as an Individual Taxpayer Identification Number (ITIN) on credit card applications. ITINs are, by nature, issued by the US Internal Revenue Service (IRS), so getting one requires mailing a bunch of documents to the IRS.

Now, listen up here, because this is important. One of the reasons one might be eligible for an ITIN is if they are a foreign resident who sells goods and services in the US, and needs to prove their foreign residency status in order to be exempt from US withholding taxes.

Got it? Good. That’s the exact reason that you’re eligible for an ITIN.

Go to Amazon's Kindle Direct Publishing and open an account. Boom, you’re an eBook seller on a US-domiciled online marketplace, and if you didn’t have an ITIN, you’d be subject to hefty withholding taxes on all your "royalties". We wouldn’t want that, would we?

So once you’ve registered an account, reach out to their support email to request a letter indicating to the IRS that you need an ITIN. You’ll most likely be directed to this page, where you can download the ITIN support letter, on the Amazon letterhead, ready-to-go.

 
 

(Side note: you can download the letter directly, but there are a few data points that indicate it’s better to include an email trail to Amazon in your application package as well, because a few ITIN applications were denied for having a “self-generated” ITIN support letter.)

You also have to send in a completed W-7 form, as well as either your original (non-US) passport or a certified copy, to prove your identity and foreign national status.

You can find the official instructions for the W-7 form here. In the case of applying for an ITIN to avoid withholding taxes on all your earnings, though, the form should be specifically filled in as follows:

  • Tick boxes “a” and “h” for the Reason you’re submitting Form W-7. 

    • You tick “a” because you are a “nonresident alien” (i.e., Canadian resident) who is claiming a benefit under the Canada–US tax treaty to be exempt from withholding taxes by US-domiciled businesses.

    • Pursuant to the official instructions, you tick “h” to specify the exact type of exception under the tax treaty (Exception 1(d): Third-party withholding on passive income).

  • You need to enter additional information relating to the specific tax treaty under which you’re looking for an exception.

    • The treaty country is Canada.

    • The treaty article number is “Article XII (12)”, since that’s the section of the treaty that covers royalties and other withholding on passive income.

Now, even when the ITIN application is filled in correctly, there have been data points of people having their applications rejected anyway. Therefore, I’d recommend giving the IRS a call and speaking with an agent to verify that the ITIN is filled in correctly for the intended purpose (i.e., claiming the tax treaty benefit of third-party withholding on passive income).

Taking this proactive step allows you to cite this phone conversation in your final application. You can include with your documents a “cover letter” of sorts, noting that you spoke to an IRS agent about your application and was assured that it was correct. You can note down the IRS agent’s details as well and cite those on the cover letter.

For example, here is an excerpt from a reader’s cover letter, which resulted in successfully receiving the ITIN:

Please find enclosed my Form W-7 application for an International Taxpayer Identification Number (ITIN). I’ve also included my supporting documents for the exemptions claimed, namely a letter from Amazon on their letterhead supporting my request for an ITIN and the email chain where Amazon provided the letter to confirm it’s not self-generated.

I’ve also enclosed a certified copy of my Canadian passport as proof of identity and foreign status as a Canadian citizen.

I spoke to IRS representative [Insert Name], ID Number [Insert ID Number] in the [Insert Department] on [Insert Date & Time] regarding my application. He/she confirmed that my form should be correct and that my letter on Amazon letterhead would support my application.
— ITIN cover letter by Prince of Travel reader

Lastly, you need to include a copy of your passport with the application. It’s up to you whether to send in your original passport or a certified copy. You won’t get your documents back for at least a few weeks, so keep that in mind if you have upcoming travel, etc. Personally I didn’t want to risk my passport getting lost in the mail, so I went with the certified copies.

Importantly, a certified copy is NOT the same as a notarized copy of a passport that you can get at any lawyer or public accountant’s office. Instead, it’s provided directly to you by Passport Canada, so you’ll have to schedule an appointment with your local passport office.

The fee for certified copies is $45, which is good for one, two, or three copies – most people opt for three copies, sending one to the IRS and keeping the other two around for another occasion when they might prove useful (hint: they probably won’t).

Once you’ve got the following all sorted out:

  • Letter from a withholding agent indicating the need for an ITIN

  • Completed W-7 form

  • Original passport or certified copy

  • Cover letter (optional)

Throw them in an envelope addressed to the IRS’s receiving address indicated on the ITIN information website, send it off, and wait. In about 6-8 weeks, if you’ve done everything right, you should receive a letter in the mail indicating your newly minted nine-digit ITIN.


Step 5: Build Your Credit History

Once you’ve set up your address, bank account, first credit card, and ITIN, the hard work is over. Now all that’s left is to wait for your credit history to mature long enough for you to be approved for some of the credit cards with bigger bonuses, like the Chase cards.

Chase has the infamous “5/24” rule, where you won’t be approved for any credit cards if you’ve opened more than five cards in the past 24 months, so that’s something to keep in mind as you begin to navigate the US landscape.

If you got started with an American Express Global Transfer, you will likely be eligible for more Amex US credit cards pretty soon (within three to six months); however, you don’t want to get too many Amex US cards or else you’ll lock yourself out of 5/24 by the time your credit history has matured enough to be eligible for Chase cards.

One way around this is by going for the American Express business credit cards after you’ve gotten your first Amex US product. Examples would include the American Express US Marriott Bonvoy Business Card or the American Express US Business Platinum Card.

 
 

Like I mentioned earlier, business credit cards don’t report to personal credit files in the United States, so you can rack up their signup bonuses on the business products without affecting your future 5/24 eligibility. 

Generally speaking, you’ll need to wait at least one year before Chase or Citi will approve you, and even then it’s not a sure thing, and often requires a reconsideration phone call after an initial denial. For example, I myself was approve for my first Chase card, the Chase Sapphire Preferred, after having about 18 months of US credit history.

One way to build your relationship quicker and speed up the process with Chase is to open a Chase checking account (which you can easily do as a Canadian) at a branch on one of your trips down to the US.

 
 

Overall, applying for US credit cards is a lot more about playing the long game than here in Canada. Whereas Canadian credit cards can be opened and closed for their welcome bonuses multiple times, American credit cards are generally much stricter on this sort of “gaming” behaviour, so the strategy is generally more conservative and more about building your credit history over the long run to be eligible for the much wider range of bonuses south of the border. 

Lastly, if you have a spouse or partner, I’d highly recommend going through this process for both of you at the same time. After all, we know that playing the two-person game is one of the best ways to maximize points here in Canada, so just imagine how much is on the table when it comes to US credit cards. America, the land of opportunity indeed!


Conclusion

There’s no denying that getting your very first US-issued credit card can be quite a complicated undertaking. From registering for a US mailbox to dealing with the highly involved process of getting an ITIN, it’s a tricky process to manage and can easily take up a good chunk of your time. That’s why I’m hopeful that this guide lays out the key elements for you and helps you break down the process into more manageable steps.