For those fleeing war and conflict to Canada, opening a bank account and obtaining a credit card pose challenges

Jalal Nazari at Massey College in Toronto on August 16.Tijana Martin/The Globe and Mail

Zamir Saar arrived in Canada from Ukraine last November and needed to open a new bank account. But since he didn’t know how the banking system works and which bank offers the best credit products, he relied on YouTube videos and friends for advice when deciding what type of account or which bank to choose.

“I still can’t figure out how the banking system works here,” Saar said. “I asked my bank and some of my friends for a guide, because you need this information to make many decisions, including financing a house or a car.”

Mr. Saar is not alone. Newcomers to Canada often have difficulty navigating an unfamiliar banking system and understanding the myriad of product options, and may find themselves stuck when opening a new bank account, building up credit and meet the documentation requirements of a financial institution.

Following the end of provincial COVID-19 restrictions, Canada is experiencing an influx of immigrants, with refugees from Afghanistan and Ukraine, as well as international students and foreign workers, making up a significant portion of new arrivals.

A new survey from the Bank of Nova Scotia found that newcomers identified high rental costs, getting the right documents and IDs, buying a mobile phone and credit card credit and finding a job as common challenges they face soon after arriving in Canada.

“Moving to a new country is such a big challenge and getting settled financially can be one of the important things they can do so they can increase their chances of financial success,” said Tracy Gomes, senior vice president of the retail customer value at Scotiabank.

Ms Gomes said newcomers often lack adequate knowledge about the financial system and are vulnerable to financial fraud.

Enoch Omololu, founder of Savvy New Canadians, a personal finance website, said newcomers aren’t going to the right banks or asking the right questions about the best accounts.

“A good example is opening a credit card account that requires you to put down a deposit of $1,000 or more in order to have a secured credit card,” he said. “It can be a challenge because you can’t use the deposit for two years.”

Jalal Nazari, an Afghan refugee, said resettlement agency Polycultural Immigrant and Community Services helped him open a new bank account and provided credit card details when he arrived in the country.

A month after opening the account, Mr. Jalal decided to get a credit card. A customer representative from the bank provided him with financial information on the various options available and suggested that he upgrade to a student credit card, which offers more benefits.

Mr. Jalal noted that it would have been a difficult process as he had no idea which option or which bank was better.

Jalal Nazari is an Afghan refugee.Tijana Martin/The Globe and Mail

Mr. Omololu said that instead of choosing online banking, newcomers can start with traditional banks, as some of them offer personalized offers, including accounts with no monthly fees for one year. He said it would give them time to learn how the system works.

Ms Gomes said Scotiabank supports organizations and non-profits that help newcomers, providing them with the tools and resources to overcome the financial challenges they face and increase the opportunities they have. in education, employment and adaptation to a new environment and a new means of subsistence.

When Mr. Saar started looking for an apartment, landlords asked him to provide a credit history. Since he didn’t have a credit card, he was asked to pay a six-month deposit before he could find an apartment.

Scotiabank’s survey found that despite saving money to cover credit card expenses, required documentation and immigration status meant newcomers were often limited to entry-level cards with limits minimum credits that were insufficient for the initial expenses, especially for those arriving with a family.

The survey, which was based on in-depth interviews and focus group discussions, highlights newcomers’ need for financial literacy, knowledge of credit products and how to obtain credit, access to online banking, credit card options and fraud alertness early in life. in Canada.

Ms Gomes said her bank also provides advice to newcomers so they can protect themselves against fraud or phishing scams, explaining that fraudsters often disguise themselves or pretend to work for reputable organisations, banks or companies to steal personal information. commit a crime.

“There are certain details that their banks will never ask them to provide, such as sending an email with a clickable link to access their accounts or products,” Ms Gomes said. “We want them to know some of these things and this awareness helps them know that this is not common practice in the banking system and that they should avoid it.”

Two weeks ago Mr Saar finally got a credit card and admits he is still learning the credit system and how to make transfers from his debit account to his credit account.

“A friend of mine who lived here was able to explain some of these things to me,” he said. “Everyone needs this kind of support to help them settle in once they’ve moved to a new place.”

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