A lack of credit and employment history can make it tough for newcomers to Canada to obtain a mortgage, credit card - even a bank account! Guest poster Pracheer Saran, who first moved to Canada from India five years ago, shares his experiences with getting new banking products, finding affordable housing, and adjusting to Canada's high tax rate.
Starting Over in a New Country
It has been over five years since I immigrated to Toronto from India. As I look back, mixed feelings of naivety, accomplishment and learning overpower me. The learning curve has been an ongoing process for me - though I've long been in the habit of calculating the cost of dollars to rupees, which makes everything from coffee to renting an apartment seemingly expensive.
Although I am from Generation Y, having grown up along many world changing events like the development of technology and mass communications, I am still wary about adopting new concepts.
With no family here and with little guidance, my road to settlement in Canada has been mostly through trial and error. Right at the onset, I was intrigued by the challenges in getting around some of the basics.
Credit Card Challenges
I applied for my first credit card only when I moved to Canada and that too when I had been left with no choice. I had to build a credit history and soon realized obtaining a card was the quickest way.
Armed with my savings of about $15,000, I was positive that my eligibility for getting a credit card was as good as that of the Canadian NHL team securing its spots in the play offs. But it was an unpleasant awakening. Being a new immigrant without a credit history, banks were hesitant to issue me a card at all. Confused, irritated and frustrated, I battled my way right up to the bank manager; and in the end was presented an electronic card with $500 credit limit. My feeling that time could be compared to what the Montreal Canadiens are currently experiencing. However, today a couple of banks offer credit cards for newcomers, which is helpful.
Landing a Job
With the credit card battle won and feeling comfortable about my finances, I was confident I'd secure my dream job in no time - but I was in for another rude shock and surprise. While I had spent a good chunk of my hard earned money, my job hunt in my field had led me nowhere.
From my experience, it is advisable for a new immigrant to take up any job – call centre, retail stores, fast food joints; part-time or full time – in the beginning while the search for a position in one’s field continues. This helps to avoid denting in your savings, and enables you to meet with people already living in Canada who could offer useful advice. It is advisable to have a short-term and a long term list of plans and priorities.
When it came to accommodation, I was lucky as I had maintained contact with a friend of mine from my student days in Australia who was now living in Toronto. I immediately got a place to stay but as he lived in downtown Toronto, the rent was steep.
Though living downtown made for a faster commute to work and entertainment, the high overhead expenses started taking a toll on my depleting funds. I chose to shun downtown living and moved mid-town where the rent was considerably lower. However, I made sure that I was close to the subway to avoid being stranded at times braving the freezing cold, snow, and rain.
Getting Used to Canadian Taxes
My first grocery shopping outing is still etched in my memory. In Canada the price of products changes considerably after purchase when 13 per cent tax is added. I hardly had a choice; this erosion made me permanently change my shopping habits and shrank my requirements drastically... though not without pain.
I also noticed that Canada has no concept of Maximum Retail Price, unlike many other countries, causing prices to vary considerably from store to store. I soon became a researcher and made a name with my friends in guiding them to stores with cheaper items. Some of them went further and at times advised me on this dollar-saving issue; though beaten on what I considered my own turf, I never felt slighted over losing my specialist’s title.
Sky High Car Insurance
I got my license in five months and was excited at the idea of owning a car, but high insurance rates dampened my spirits. Lack of North American driving history was the culprit, despite 15 years of driving experience from previous countries of my residence.
Because I lived close the subway and access to efficient public transport, I could afford to move the car down in my list of priorities, though in retrospect, I feel that I should have bought the car earlier as insurance rates deplete with years of good driving experience.
The Great Canadian Budget
I think the best way to tackle any situation is to go by setting your immediate priorities and setting a budget accordingly. It is especially vital for a new immigrant because of limited resources and lack of knowledge about the city. It is essential to correctly gauge and plan your priorities - accommodation, grocery, attire, commuting and entertainment.
More Financial Resources for new Canadians:
- Canadian Centre for Financial Literacy
- Momentum.org (Alberta only)
- Newcomer Finances Toolkit – Ottawa Community Loan Fund
- Service Canada
- Woodgreen Community Service
About the Author: Pracheer Saran
I am a travel enthusiast and a freelance writer who loves to write about my escapades, from travel to beer - but when it comes to finances, I still had a lot to learn. I first moved to Canada five years ago, and as a new immigrant, getting a credit card to building a credit history was a mammoth task for me. I mostly learned from trial and error - and am still learning! There is some homework a new immigrant can start a few months before moving to Canada to ensure a smoother settlement. So fasten your seat belts and join me for an informative ride as I share the challenges of managing my daily finances, hunting for my first job, battling high car insurance rates, buying my first house and securing a mortgage.