For students, managing finances at college is often key to staying well-fed and for some drunk. Now that you are college student living on your own with your own money, it is time to start thinking about banking. Many decisions need to be made, such as which bank to use, what type of account to open and if you need a credit card. First, you need just one account. Juggling many accounts could prove disastrous when money starts running out and the debts start piling up. Banks attempt to attract student customers because students normally stay with the bank that they opened their first account with. Thatʼs the reason why they offer novel gifts when you open a new student account. So, prior to placing your money with one of the banks, check which of the factors on the checklist are most important to you: ú ATM on campus ú Branch on campus ú Cash card ú Credit card ú Telephone banking ú Internet banking ú Free overdraft ú Insurance services ú Saturday opening Most banks offer free student checking accounts that often have no monthly fees and do not require you to keep a minimum balance. Also, with this checking account, banks will sometimes offer you a premium saving account with no monthly service fee. You will be entitled to unlimited check writing and will be given a debit card.
Another thing to keep in mind is if the bank has online banking. This can make checking your account a lot easier since you are probably on the Internet all the time anyway. Also, find out whether or not the bank offers free overdraft protection. When the balance of your account is in the negative, a bank charges you about $30. Since you are a college student your account may fall in the red from time to time, and you would hate to have to lose $30.
The debit card a bank provides you with takes money right out of your checking or savings account. It is the same as writing a check. If you feel this is not enough, you can consider a credit card. Depending on how disciplined you are, credit cards can be useful for emergencies and big purchases. However, if you are weak-willed when it comes to financial matters, then cut them up.
Credit cards are a type of loan and provide one of the easiest ways of borrowing over a short period. However, card providers are all too aware of their potential for abuse and try to keep a lid on things by imposing credit limits for students. Credit cards work best if you can pay off the balance each month and you donʼt use them to draw out cash. There are two major types of credit: secured and unsecured. Unsecured credit, which is what most credit cards are, is based on your promise and signature to repay the credit you have spent. These cards allow you the most freedom, and are given to those with perfect, good and sometimes fair credit.
Secured credit is like a savings account that extends your money, and is typically used by those who have bad or fair credit who are not eligible for the cards with good features. For example, if you deposit $500 in an account with a secured credit card company, you could get a $1000 credit line. If you spend money with your secured card but do not make your minimum payments, the bank or credit card company may take your $500.
When you apply for a credit card, the company will do a credit check on you and, if satisfied with your risk profile, will probably send you a card. But they might also decline. Once you get a credit card, other credit card companies will start sending you offers. Pay attention to these. Many of them offer a year of 0 percent interest. Others may have a lower interest than you are paying now. It is easy to switch credit cards. When you get the new card, you transfer the balance of your old credit card over, and then close that account. Having a student credit card and using it responsibly can help you to establish a good credit history by the time you graduate. This will make things a lot easier when it comes to buying a house or a new car.
Just remember, when choosing a bank, look for free accounts without restrictions. When choosing a credit card, look for the lowest interest rate and a reasonable spending limit.