For international students and new immigrants: how to avoid hidden bank fees and unlock your first credit card

When you first arrive in Canada, you have to set up a bank account, a phone plan and a place to live within a few weeks, so bank fees are easy to overlook. Monthly account fees, transfer fees, foreign currency charges and credit card annual fees look small one at a time, but together they can cost you several hundred dollars a year. This guide shows where the costs hide and walks you through getting your first Canadian credit card.

Step 1: Choose an account built for newcomers

Most of the large Canadian banks offer packages for students and new immigrants, usually with the monthly account fee waived for a limited time. To open an account you generally need your passport, your study or work permit, and proof of a Canadian address. Terms differ from bank to bank, so before you sign, ask what the account costs once the free period ends and what minimum balance is required.

Step 2: Know the four most common hidden fees

• Monthly account fee: sometimes charged only when your balance drops below a set amount.
• Transfer and international wire fees: compare the exchange rate markup as well as the fee itself.
• Foreign transaction fee: many credit cards add about 2.5% to purchases in foreign currency, including online orders from abroad.
• Annual fee: premium travel cards can cost hundreds of dollars a year, which is wasted if you do not use the perks.

Step 3: Apply for your first credit card

You start with no Canadian credit history, so choose a card with low entry requirements: a newcomer card, a secured card backed by a deposit, or a no-fee card with a low minimum income. Some no-fee cards ask for only about $12,000 in annual income. Visa Infinite cards, by contrast, generally require $60,000 in personal income or $100,000 in household income, and Privilege cards require far more, which is unrealistic for most newcomers.

Step 4: Build good credit habits

• Pay the full balance on time every month. Paying only the minimum leads to high interest.
• Keep your balance below roughly 30% of your credit limit.
• Set up automatic payments so you never miss a due date.
• Avoid applying for several cards in a short period, because each application leaves an inquiry on your file.

Canadian credit scores range from 300 to 900 and are tracked by Equifax and TransUnion. It usually takes a few months of regular card use before a score appears.

Check your card with New Canadian Finance

In the "Fee Audit Dashboard", pick the card in your wallet and answer a few questions. We estimate whether it earns or costs you money over a year and suggest better-fitting alternatives.

This guide is general information. Confirm current fees and conditions with each bank.