Friday, 10 August 2012

10 things I wish I had known about . . . student banking

I have never been very interested in finance or economics, and due to recent newsworthy events, banking has fallen even further down my list of interests. Nevertheless, I found that setting up a bank account in the UK/USA was a stressful and complicated process, so I thought I would share a few pearls of wisdom with anyone headed stateside for the upcoming academic year.
1) Don’t delay
Get a bank account as soon as possible. It is one of the least fun admin jobs when you arrive in your new home, but get it out of the way. Using your UK bank card will cost you (typically a percentage of your bill if you use a credit card, or a flat fee if a debit card, but do check with your bank for specifics), so it pays to get an American account set up as soon as you can.
2) Reconnect with your British Bank
If you are intending to return to the UK after studies, or to spend your holidays back home, chances are that you are keeping your British bank account open. It is a good idea to look into its policies on overseas charges. You may find your bank partners with one in the US (e.g. Barclays partners with Bank of America) and that fees are cheaper if using the cash machines of a partner bank.
3) Get a Social Security Number
Not all students are eligible for a Social Security Number (often abbreviated to SSN). If you have any kind of employment (and your visa may restrict you to working on campus), you will be able to apply for one of these. Having this American equivalent to a National Insurance number will make opening an account (especially if you want a credit card) very useful.
4) Check your credit
Surprisingly, in such a global world, credit ratings do not seem to travel. Even if you have a spotless credit rating in Britain, you are an unknown to a US bank, and so getting a credit card card may be tricky. If your university has its own Credit Union, this may offer you a credit card on better terms than a bank, and may not require a credit history.
5) Think local
Banking in the US is very different to in the UK. Although there are a few national banks, many people bank with a local institution. Check out the banks that are based in your town, city, or state.
6) Be a slave to the machine
We are spoilt, in the UK, by being able to access cash for free from most cash points. Many American banks charge you a fee for using another bank’s ATM – so pick your bank carefully. Either choose a big national bank that has cash points across the country (if you intend to travel), a local bank with machines convenient to you, or any bank that waves such fees.
7) Check out cheques
Try not to gasp, as I did, when having to shell out for a cheque book. It seems criminal, to me, to have to pay for the ability to write a money transfer on a piece of paper. On the plus side, you can usually get pretty cheques with landscapes on them. Or you can do as I did, upgrade your account temporarily and get a free chequebook with a variety of naff cheques. I reserve the ones with hideous soft-focus pictures of dogs chasing a ball for payments I most resent (taxes, fees, etc).
8.) Go online
One thing I quickly realised in the US is that nothing is free. Even the most basic of accounts often cost you something. I managed to get a free current account, however, by going online. I am not entitled to speak to a bank ‘teller’ in my local branch, but can do all the basics (cash cheques, access my statements, make transfers) through my online account and bank machines.
9) Read the small print
If someone back in the UK wishes to transfer you some money, check out the terms and conditions. I was recently charged a 10 per cent fee and a flat rate of thirty dollars when receiving a transfer. Never again.
10) Don’t be too scared
I was terrified about banking – that I would fall foul to fees and misunderstand terms and conditions. Don’t forget that you are the customer, and that banks can often offer you more than they initially advertise. Get this tedious bit of admin over as soon as you can, and then student life in the US will be a much more pleasant, easy, and cost-effective matter.

with courtesy of Daily Telegraph

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