By Kelly Dilworth Creditcards.com Hey students! Looking for a better way to bank? Here are five expert tips: 1. Don’t settle. Financial services that your college chooses “are not necessarily going to have the lowest fees available,” said Joe Kantrowitz, publisher of fund.com. Go online or to some local banks and credit unions and ask what they
Looking for a better way to bank? Here are five expert tips:
1. Don’t settle.
Financial services that your college chooses “are not necessarily going to have the lowest fees available,” said Joe Kantrowitz, publisher of fund.com. Go online or to some local banks and credit unions and ask what they offer.
“College is a great time to establish really strong money habits and really No. 1 — and what most people don’t do — is shop around,” said Karen Carlson, director of education and creative programs for the InCharge Education Foundation. “The best thing is you don’t have to do it physically,” she adds. “You can do it online in an hour.”
2. Read the fine print.
Instead of just signing up for the first debit card or checking account that looks good, take the time to really read through an account’s agreement from top to bottom.
“The information is there,” says Nessa Feddis, vice president and senior counsel for the American Bankers Association. You just need to “take a little bit of time to go ahead and look,” she said.
She compares finding a bank to buying a car or cellphone. “[It] takes time to understand the costs and features of those types of products and financial products aren’t any different. It takes a little bit of time, not a lot.”
3. Beware of debit cards that make you pay.
If you have to pay to access your own money, walk away, says Carlson. Some prepaid debit cards require that you pay up to $5 to load money on to the card, and Carlson says that’s a bad deal. “To me, it’s like the bottled water of money,” she adds. “We’re becoming alarmingly at ease with the idea that you should pay to access your own money.”
Look for debit cards that are free. “The ideal debit card is … one that has no fees,” said Carlson. “Most big banks have no-fee checking accounts or low-fee” accounts for students. And, “do not opt into overdraft protection,” adds Carlson. “Save yourself the fines.”
4. Track your spending.
Kantrowitz said debit and credit cards are especially dangerous because you’re less aware of the money you spend when you use them.
“When you use a piece of plastic to buy something, it feels the same whether you’re spending $5 or $500,” he adds. “It’s very easy to get overextended.”
Kantrowitz recommends that students create a “descriptive budget,” writing down everything you spend in a notebook and categorize it so you know how much you’re spending and on what and keep receipts.
Or, use cash instead. Withdraw a certain amount of cash every week and when it’s gone, it’s gone. Studies have shown that people tend to spend less when they use cash instead of credit cards. “Plus, there are no fees when you use cash,” she said.
“Live like a student while you’re at school, so you don’t have to live like a student after you graduate,” Kantrowitz said.
5. Do the math.
“If you’re eating out and buying a pizza once a week, that’s $10 a week conservatively,” Kantrowitz said.
That comes to about $2,000 over the course of four years of college.
However, if you’re using student loan money to buy that pizza, you’ve also got to factor in the interest you’re paying on that loan.
“Every dollar you spend in student loan money, it’s going to cost you about $2 by the time you pay back the debt,” says Kantrowitz. “So that $2,000 will be $4,000. A good rule of thumb is before you use student loan money to buy anything, double the price because, realistically, that’s how much it’s going to cost you.”
NOTE: THIS WOULD BE THE TYPE OF CONTENT WE WOULD PRODUCE. WE WOULD NOT RELY ON OTHER SITES. THIS IS FOR PROTOTYPE PURPOSES ONLY.