Welcome to my top tips for banking in the UK!
The first thing to know is that you cannot set up a bank account in the UK until you are actually here. They have strict rules to try and prevent money laundering, so it can be difficult even once you are here but aren’t really established yet, aka you don’t have 3 years worth of address history. The way we got around it was a letter from my Superintendent Minister stating that I was employed with the Methodist Church in Britain, and as part of my employment was provided housing at the manse address. That served as proof of address enough to open an account.
Once we were past the difficulty of first opening an account, I have had nothing but positive experiences with Lloyd’s Bank. Their app is excellent, allowing you to do everything you might need, including deposit paper cheques. (This probably won’t apply to anyone except ministers whose churches are still old-fashioned!) I have nothing but good things to say about Lloyds Bank, we have done all of our car financing through them as well.
One huge difference between banking in the UK and banking in the US - transferring between bank accounts is super easy, barely an inconvenience. You just need someone’s sort code and account number and you can send them money almost instantly, and vice versa. (You can find yours on the app once you have established an account.) Seriously, Joel and I have sat on the couch together and I’ve sent him money and his phone pings with the notification that he has the funds in under a minute. In the US, when we wanted to transfer between our bank accounts we had to physically go into the branch to link them, and after that, we could do it electronically, but the money would take days to show up! This is a vastly superior aspect to banking in the UK.
You will likely still want to keep a bank account in the US. If you have a bank or credit union you like, it might be worth a chat with them to see how they would handle you living abroad. I’ve heard nightmare stories of people’s accounts being frozen and having to return to the US to handle them, so be careful. When we left, we moved all of our accounts to Capital One and we have had an excellent experience with them so far. We still use our US-based Capital One credit cards for almost everything as they have excellent rewards. We have found that UK credit cards don’t really have rewards, and the culture here is very much against credit cards, most people pay by debit for everything. We prefer to put everything on credit for the rewards, and then we always pay our balance in full every single month. You will need to keep a US phone number for verifying transactions, but more on that later!
So clearly, if we are earning in pounds but paying for everything on our US credit cards, we must be transferring money back to the US fairly often. Luckily, there is a super easy way to do this! I wrote an entire blog post about TransferWise - now just Wise - so you can check that out (and my referral code!) here.
The last thing I’ll say about banking is about establishing credit. Sadly, your US credit score has no meaning here, so you’ll be starting from scratch. I would recommend signing up with Credit Karma right away so you can start monitoring your UK credit score. It will recommend to you things you might not think of yourself, like getting on the electoral roll. A lot of things will be out of reach until you have 3 years of address history, so just be patient. I was able to get a low-limit credit card with Lloyds Bank after a year. This is one more reason (I think) to keep you US cards if you can.
XOXO, Bethany