Your Financial Life in Hong Kong, Part 2: Banking, Credit Cards & Transfers

This is part 2 in my 8-part guide to your financial life in Hong Kong. It is mostly intended for foreigners (especially US citizens or green card holders) living in or moving to Hong Kong looking to better understand “the system” and better manage their money both in and outside of Hong Kong. Let me know if you have any questions.

Hong Kong continues to be Asia’s main financial center, being more international than Tokyo and bigger than Singapore as well as China’s front-door legal and tax haven for banking and insurance.  Retail customer service may not be as thorough or as friendly as in the States, but if you have all the documents they require, they tend to be very efficient.

As always, please note that this is written based on my own experience for discussion purposes only and should not be considered personalized advise.

If Possible, Keep Your US Accounts and Cards Open

I left the US almost 8 years ago, but I still keep a few bank, brokerage, and credit card accounts open there, knowing it will be very difficult for me to open them remotely or even on trips to the US while I am not living there full time.  I try and receive my statements electronically when possible, but I also use an online mail agent to receive and scan my mail at a US address which I can download as PDFs from their website.

Keeping a US credit card open with small monthly charges (like the one for the online mail agent) that I auto-pay in full every month from my US bank account is a simple way of keeping these accounts and my US credit history alive and ticking.  My US credit card also charges no international or foreign exchange fees, which many HK credit cards do charge, and my US ATM card reimburses the rare ATM fee I encounter in places like Thailand.

Opening Your Hong Kong Bank Account

Opening a Hong Kong Bank Account is usually relatively straightforward, typically requiring a mobile phone and a small initial deposit, but has become a bit more difficult for US citizens and green card holders in recent years.  I do not recommend any one bank over another, but have personal and company accounts here at HSBC, Standard Chartered, Bank of China, and Citibank.  Most bank accounts will cover many currencies including Hong Kong dollars (HKD), US dollars (USD), Chinese Yuan Renminbi (CNY, CNH, or RMB), Euros, Yen, Pounds, Canadian dollars, etc., but the exchange rates between them are often relatively poor, costing around 0.5 – 1.5% to convert currency from one account to another even at the same bank.

Note that there are two local ATM networks in Hong Kong: one for HSBC and Hang Seng bank, and the other called “Jetco” which most other banks use.  I keep one HSBC and one non-HSBC ATM card handy so that I can use any ATM machine in HK.  Many ATMs allow you to withdraw HKD or RMB, but only allow you to deposit HKD.

By default, many ATM cards in Hong Kong are not enabled to be used outside of Hong Kong, including in Mainland China.  The bank can usually enable this for you in a few days, but as mentioned early, I get better rates and fewer fees using my US ATM card outside of Hong Kong.

Transferring Money Between Banks in Hong Kong

A deciding factor for me in choosing a bank to open a HK account is whether and how much they charge to transfer money to other bank accounts at other banks in Hong Kong.  A very common way to pay bills and send money to other individuals is by simple local bank transfer, and you want to pay as little as possible to do these whether the recipient has an HSBC account or not.

One of my accounts charges for local transfers to other banks, but does not charge to use paper checks, so oddly enough I find myself signing paper checks out of that account for some monthly payments.

Transferring Money Out of Hong Kong

Wire transfers of many major currencies from a Hong Kong to an overseas bank account are usually quite straightforward if you have the right SWIFT or IBAN information, and should not cost more than HK$100-200 or US$15-25.

Personally, my preferred way is to transfer money locally to my Interactive Brokers account, do any currency conversion there at institutional rates, and then wire that money to my US account, where Interactive Brokers gives me one free wire per month.  This is just one of many nice features and reasons why choose Interactive Brokers as the broker/custodian where we manage client assets.

Hong Kong Credit Cards

Most often, whichever bank you open an account with will have a choice of Visa and MasterCard programs that should cover most local HK spending and rewards programs.  American express is often an exception, and Cathay Pacific is a popular Amex card for frequent fliers on that airline.

If you plan to travel frequently to Mainland China, also consider applying for a China “UnionPay” dual-currency card (HKD and RMB), which is more widely accepted on the Mainland.

Now that you have your accounts for receiving, sending, and spending money set up, part 3 will cover getting paid and paying taxes.

Until next time,

Tariq

+852 9476 2868

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