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How to manage your finances when you are moving to the USA

25th February 2025

Moving to the USA from the UK is an exciting adventure, but it comes with the challenge of navigating a new financial landscape. Finances are handled differently in both countries, such as the US’s credit score system and its complex tax structure, which can feel overwhelming at first. This blog will guide you through essential steps like opening a bank account and building your credit history, helping you manage your money effectively while settling in and planning for the future.

Key financial differences between the UK and USA

1. 1. 1. Currency and Conversion Rates – Understanding the switch from GBP to USD is important in successfully managing your finances in the USA. Exchange rates fluctuate, affecting the transfer of funds across the pond. If you decide to temporarily use your UK card in America, be prepared for the exchange rates and additional fees. 
      2. Tax Systems – In the UK, taxes are generally included in the price of goods and services, but in the USA, both federal and state taxes are added after the price tag. As an expat, you may also need to file taxes in both countries, though there are agreements to avoid double taxation. When starting a job in the US, you must complete a W-4 form, which determines how much tax is withheld from your paycheck. It’s crucial to fill this out correctly to avoid over or underpaying taxes.

      Banking Differences – When setting up a US bank account, you’ll have a choice between national banks like Chase and Bank of America or local branches. Each has its own advantages, so research which one suits you best. Opening an account will require various documents and identification, which will be explored later in this blog. Transferring funds between the UK and the US can also be quite pricey.

 Looking to move to America? Contact a member of our team today!

Setting Up Your Finances in the USA

One of, if not the most important, steps in setting up your finances in the USA is opening a US bank account. To set up an account, whether in-person or online, you will need the following documents:

A form of Identification such as a passport or driver’s licence.

Proof of Address in the US. This can come from utility bills dated 60 days or sooner, a letter with your name and address, or an employer’s pay stub or paycheck.

You will need an opening deposit, paid via a debit card or cash.

You may be asked for your Social Security number. If you do not have one, you can apply for an Individual Taxpayer Identification Number (ITIN) instead. This is issued by the Internal Revenue Service (IRS) and is not a code for work authorisation but for tax filing purposes while living in the States. 

How long does it take to set up an account?

The time it takes to set up a bank account varies between companies and the type of account you want to open. While online accounts can be super quick when it comes to the application process, it can take hours or even days for your account to become active. In-person visits to start a bank account can be much faster, with your account being accessible during your appointment. It is best to check with your bank provider when starting up your account beforehand to ensure you are clear on estimated timings.  The longest part of setting up your account is usually waiting to receive the card attached to it, which can take anywhere from 7-10 days.

Understanding Credit Scores in the United States

Credit scores are very important in the US, arguably more so than in the UK, though it works the basically same way as it does in England. You should start by checking your credit and loan statements to ensure they all look correct and that there is no fraudulent activity happening that could affect you in the future. You can also find a free service that runs a credit check on you, such as with bank providers, to give you some knowledge about why they are important to have. Another option is to get your credit score from a professional service such as Equifax, Experian or TransUnion. If you think you have a bad credit score, contact a credit counsellor. A counsellor can advise you on how to improve it and the steps you can take to prevent it from happening again.

How is credit score calculated?

Your credit score will be calculated using information from various areas, such as:

• Payment history
• Outstanding balances
• Length of credit history
• Applications for new credit accounts
• Types of credit accounts e.g. mortgages, loans, or credit card

It is important to know that your UK credit score might not be transferable, so understanding the financial elements used to calculate it in America is worth knowing.

Ways to get a good credit score in America

Credit scores are very important in America for buying property and getting jobs, but more importantly, paying for insurance and healthcare. Healthcare insurance in the States can be very expensive, and companies often perform a credit check on you before giving you a quote – in this case, a good credit score can help you significantly.

There are several ways to ensure a well-rated credit score, such as paying your loans on time, not getting too close to your credit limit, having a long credit history, and ensuring your credit report has no errors.

Be sure to research your new destination before making your move to America. For more information, take a look at our Moving to the USA guide.

Forms of payment in the US

As in the UK, you can pay for things in the United States using credit cards, debit cards, cash, or phone payments.

Tips for getting a credit card

When applying for a credit card in the United States you will need to have a social security number or ITIN, an existing US bank account, and a US address.

Through your application, you may be able to use your previous credit score from the UK towards your US credit card application, though this might not be possible with every banking company. If you are struggling with the application, as a UK expat, you can ask your current bank or your American employer to apply for a credit card on your behalf, as it is likely they will have links with banks or credit unions that could support your application.

Paying with cash

Cash is still widely used in the USA, especially for tipping at restaurants, taxis, and other service providers. Before moving to America, understanding what tips are standard for certain industries can allow you to prepare your finances ahead of time, and while you continue living in the States.

Mobile Payments

Using your mobile is one of the most common methods of payment in America, but the apps can vary from what you are used to as a Brit. While ApplePay and Google Wallet are still used across the country, more popular options such as Venmo, Zelle and Paypal, are the go-to. Be sure to research these and check that they are compatible with your device and banking well in advance.

 Schedule a callback to discuss your move to America with a member of our team. 

Working out the US Tax System

The US tax system is significantly more complex than the UK’s. While the UK has a straightforward tax system, in the US, taxes can vary widely depending on whether they are federal, state, or even local. Some states, like Florida, don’t even tax income, but they have other taxes that may apply, so it’s crucial to understand local rules. Find out more about tax-free Florida in our Retirement blog.  

While you are employed in the US, it’s your responsibility to tell your employer how much tax to withhold by filling out a W-4 form. If you’re earning in the US for an American company, you will have taxes deducted at the source, but you’ll still need to file a tax return with the IRS at the end of the year.

The Substantial Presence Test determines if you need to file taxes in the US, which is similar to the UK’s Statutory Residence Test. If you spend more than 31 days in the current tax year, and 183 days over the past 3 years combined, you will be considered a US tax resident, and your worldwide income will be taxed. Unlike the UK, once you become a permanent resident (green card holder) or US citizen, your income is taxed by the US even if you move abroad.

Ready to begin your move to the USA? Request a callback, arrange a free survey email us to discuss your options. Once you’ve got your removal booked in, take a look at our Ultimate Moving Guide.

If you’re looking to leave the UK for America but need to store your belongings while you settle into your new home, our new self-storage facility might be the solution for you!