What Happens to Your Credit Card If You Move Abroad?
Building and maintaining a healthy credit history can be challenging. But if you move outside of the US after creating your credit profile , it will be even more difficult to maintain your good standing.
The Lifehacker reader has learned this the hard way. He is a US citizen working overseas and using his company’s US headquarters as a legal address.
When his U.S. credit card was flagged as suspicious, the issuer said he would need to present his driver’s license or state ID in order to unblock the card. This emigrant has no such available. He had a passport and was also a client with a checking account at the same institution. But after many interruptions, his efforts to prove his identity were not enough. He told the bank to simply cancel his card.
But his headache doesn’t end there.
The closure of this account resulted in a 60-point drop in the reader’s credit score, so he decided to open a new card in the US. But due to the fact that he did not have a residential address in the United States, his application was rejected, as was the absence of a contract to work on the spot when he went to the bank in the place where he is now. All this leaves him without credit cards – only a debit one.
Debit only affects your financial health. “It doesn’t help my credit rating in the US,” he lamented. “Probably not only I faced this, and this is a demonstration of how you can get into the dead zone,” – he wrote.
With the rise of digital nomads, this email got me thinking what you can do to protect your credit when you leave the United States. I asked Anthony Davenport, CEO of Regal Credit Management and author of Your Score , how he advises clients on the move.
While Davenport’s advice may not help our international reader right now, it might come in handy if you decide to take a long trip abroad.
Freeze your loan
First off, Davenport recommended freezing your profile security at all three credit bureaus to make sure no one interferes with your business or damages your credit while you’re out of the country.
We’ve got a guide to help you with this, which is a good idea whatever your travel plans.
Save US address
A home mailing address is an important tool for managing credit before leaving the country, Davenport said. PO Boxes may be acceptable as a secondary mailing address for your bank correspondence, but most card issuers will not allow you to use them as your primary address.
The obvious answer is to ask your family or a trusted friend to pick up your mail and ping you if anything important arrives.
If you don’t have someone to serve as your US mailbox, you can sign up for a mail scan service. They are sometimes sold as mailbox rentals or “digital mailboxes”, but the important part is that your mail is sent to a physical address and not to a PO Box.
Services for a digital mailbox include scanning the outside of an envelope, scanning content, forwarding mail or packages, and even depositing checks that you receive in the mail. Basic services (scanning envelopes and opening / scanning multiple mailings) start at around $ 10 per month, with a surcharge for opening and scanning additional mails.
You will need to complete a USPS 1583 form to authorize the delivery of your mail through an agent; the service you are working with will help you with this and any other necessary documents.
Stay active
The final step is to make sure you continue to use your US credit cards so that your problem doesn’t close them due to inactivity.
“Set up auto-pay for something small and repetitive” on your US credit card, then set up auto-pay with your card company to ensure the small fee is paid in full each month, Davenport recommended.
“This will preserve their creditworthiness until they want to return to the States,” he said. Otherwise, you may have to rebuild the loan from the beginning if you decide to return.