Getting US Credit Cards for Canadians

US Credit Cards
Getting US Credit Cards

Managing US Credit Cards
Maximizing US Credit Cards

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We Canadians have been jealously peering down on our neighbours to the south ever since credit card rewards became a thing. Let’s face it, even though our welcome bonuses are strong compared to the rest of the world, they don’t stack up to what’s available in the US.

With a population that’s tenfold our own, and an insatiable appetite for consumer spending, the US lending industry has grown (read: raked in the profits) accordingly. The number of card issuers, the range of credit cards offered by each issuer, and the signup bonuses on credit cards all put Canadian numbers to shame.

Thankfully, savvy Canadians can get in on the action as well, and the process is rather straightforward once you go through an initial phase of setting everything up.

In this article, I’m going to discuss the widely adopted method of getting your 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.

This topic has been written about many times, so I’m merely hoping to share my own experiences and tips. In particular, Jayce from PointsNerd has an incredibly in-depth 7-part series on getting started with US credit cards, and attempting to match his level of detail would be a thankless task. Instead, I’ll simply make reference to his series from time to time, pointing you in the direction of further reading if you should require it.

And lastly before we begin, I should note that getting US credit cards as a Canadian resident is something everyone should draw their own ethical lines about. While there’s nothing illegal about it, there may be an element of misrepresentation about the process (US credit cards are intended for US residents, after all), and whether you’re comfortable with that or not is entirely up to you. The point of this article is simply to illustrate what’s possible if you’d like to dabble in the lucrative world of US credit cards.


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, they’ll also forward your lettermail for US$1 plus postage per envelope (typically US$2.15 in total for letters to Canada) if you ask them. The caveat is that they charge an annual fee to rent a mailbox, in the range of US$90 per year.
 

247-parcel-logo


I’ve also heard good things about Shipito, a service that forwards your mail and doesn’t charge an annual fee. They’re based out of Nevada, so your mail might take a day or two longer to arrive, but that’s well worth it for not having to pay an annual fee. (I really should be switching to Shipito, but I simply haven’t gotten around to it yet.)
 

Shipito-Logo


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 both 24/7 Parcel and Shipito), 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 use TD Canada Trust for my personal banking. Their US counterpart, TD Bank, offers a Convenient Checking account that has no maintenance fees as long as you keep US$100 in it. That’s a solid proposition in my book, and it’s the US bank account I’ve been using ever since I began the process.

The equivalent holds true with BMO Bank of Montreal and BMO Harris Bank in the US, as well as RBC Royal Bank and RBC Bank, their personal banking arm in the US. Simply go online to get more information on their personal checking options and to open an account.


Step 3: Get an ITIN

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 Smashwords.com or 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. (At least with Smashwords, people often recommend actually publishing a dummy eBook before requesting the letter, but I’ve found it’s not actually necessary.)

I dug up the original email I had sent to Smashwords, which shows you how easy it is.

Smashwords-Email

Once you receive confirmation that the letter has been dispatched, that’s one piece of the puzzle complete. 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 addition, PointsNerd’s series does a great job of describing, in glorious detail, how you should fill in your W-7 form. It’s crucial to get this right, because the process of getting an ITIN takes 6-8 weeks, and you don’t want to have to do the whole thing again because you filled in a field incorrectly.

W-7-form

Meanwhile, 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

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 9-digit ITIN.


Step 4: American Express Global Transfer

Once you’ve gotten your ITIN, the hard part is complete! 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 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, call the Global Transfer number and tell them you’d like to do a Global Transfer to a US credit card.

Which US credit card should you pick? 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 Blue 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
 


Amex will ask for details like your SSN or ITIN (which you already have), your address in the US (which you already have), 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", and it’s only a matter of time now before you can take advantage of all the epic cards being offered by Amex, Chase, Citi, and more!


Odds & Ends

That’s the gist of the procedure, but there’s a few variations that have also brought people success over the years.

First of all, if for whatever reason you don’t have an eligible Canadian Amex account (who even are you?), another way to get your first US-issued credit card is again via the US personal banking arms of the big Canadian banks.

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 and an SSN/ITIN. You can even ask them to deliver all communications (including the card itself) to your Canadian address, for added convenience.

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
 


Also, you’re totally welcome to carry out Steps 3 and 4 simultaneously. American Express will accept your Global Transfer application over the phone even if you don’t have an ITIN yet – you can just tell them you’re in the process of getting one. They’ll set up your account (providing you have a valid address and bank account), which will generate a US credit file for you with your name, address, and date of birth, but no SSN/ITIN identifier. You can then “attach” the ITIN to your credit file at a later date when you include your ITIN on your application for another US credit card.

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.

In a later article, I’ll discuss the next steps once you’ve obtained your first US credit card: which cards to get next, how to manage your bills and minimum spending requirements, and how to make the most of the points you earn from your US credit cards in terms of redeeming them for flights and hotels.