Tuesday, 14 May 2013

How to get credit as an expat


It costs a lot of money to move abroad, even when you move with a company that pay your expenses. There are hidden costs, which you can’t claim back. Such as selling your car in your home country, you need a quick sale, you’re not trading up, and you lose money on the sale. Your house is empty, you fail to get tenants before you move. Your container is delayed due to an issue with your visa after you have gone abroad, so you need to buy basic equipment, a bed, bedding, towels, kitchen equipment and don’t forget the school uniform and stationery items you need for the children. You may get an allowance for that but by the time you’ve paid the deposits for your utilities, the deposit on the house you are renting, funds are running low.

Prior to moving to South Africa, we shopped around for International banking, we were promised with one bank, that we’d have an account set up for us, full credit history and the ability to borrow funds.

Our first and only major purchase in South Africa was a car for me, hubby had a company vehicle. Unfortunately I hadn’t sold my car in the UK at that point so I called the ‘World’s Leading International Bank’ and asked to borrow some money. Apparently, as they don’t have an actual branch in the country none of the benefits we’d been promised were available to us, they even cancelled my bank card for ‘unusual activity’ despite us only opening the account to move to South Africa in the first place.

At this point we didn’t have local bank accounts as promised, so to open accounts we had to have documents copied and verified by the local police station, provide references, full copy of contract of employment, and a wage slip. We got stuck in a vicious circle. The company couldn’t provide us with a payslip until we had a bank account to pay the money into, couldn’t pay us the allowance for the same reason, without a car I couldn’t get to the police station to certify our documents and we had almost depleted our UK finances. Without a bank account there was also no way we could rent a property, which meant we couldn’t get proof of residency and I couldn’t get a SIM card.

The circling continued for a while. We finally got local bank accounts; hubby had to give his permission for me to have an account. He also had to take time off work to ‘sort me out’ we approached the garage where he got his company car from and they organised finance with the help of the company, but there were hidden costs. We had to have a 50% deposit due to our nonexistent credit record here. The loan had to be repaid within 2 years, before our visas expired.

So I withdrew the daily maximum from my UK account, having now sorted my UK card out, using a street corner phone box to make the call from having discovered Telkom’s ‘World Calling Card’ I had to walk the short distance to the Mall each day, I was VERY scared, this is South Africa after all. Then when I had enough money I had to walk to another bank, outside the Mall with R50,000 in my bag, to pay the deposit to the garage, and then walk to the bank where the garage had sorted finance to prove we had paid the deposit, then walk to the garage to collect the car.

This was a very difficult and complicated experience, but a necessity which we couldn't avoid. I am currently purchasing a car for my son, we have credit, extended visas, money built up in local accounts, not limited to our immediate area to search for vehicles so the process isn't actually any more complicated than our experiences in the UK athought the interest rates here are much higher.

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