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Money Matters


money

As you may have already discovered, paying for a quality education in the United States can be very expensive. But with proper preparation, you may minimize the costs of this extraordinary opportunity; visit our Financing page to learn more about paying for tuition. In this section, we explore money matters that you may encounter on a daily basis during your adventure in the United States.

It probably goes without saying, but don't carry large amounts of cash around with you. Better options include credit cards, debit cards, checks and even traveler’s checks.

Traveler’s checks are one of the safest and easiest ways to transport money because you may have them replaced if they get lost or stolen. If you choose to carry traveler’s checks with you from your home country to the States, be sure they are denominated in U.S. funds. Most businesses—except taxi drivers and public transportation personnel—will accept U.S.-denominated traveler’s checks during regular business hours, typically between 9 a.m. and 5 p.m. Monday through Friday. It is wise to bring about $100 in U.S. cash with you, so you will be able to manage upon your arrival in the States.

U.S. Currency

United States currency is based on a decimal system, with one dollar ($1 or $1.00) equal to one hundred cents. Coin currency is used for amounts less than one dollar; the most common coins and their equivalencies follow:

  • penny equals one cent or 0.01 dollars
  • nickel equals five cents or 0.05 dollars
  • dime equals ten cents or 0.10 dollars
  • quarter equals twenty-five cents or 0.25 dollars

It may take a few days to get used to the new currency. You will learn, for example, that $1 is a reasonable price for a can of cola out of a vending machine; two dollars for the same item is expensive. Five dollars for a pizza is inexpensive, while twelve dollars is expensive.

Paper currency, all printed in green and white, is most often circulated in the amounts of $1, $5, $10, $20, $50 or $100. The slang term for a dollar bill is a "buck,” so $50 may be referred to as "fifty bucks."

Most banks and some major airports and hotels will exchange foreign paper currency for a service fee; very few, however, exchange foreign coinage. Pay attention to drastic fluctuations in the exchange rates between your home country’s currency and U.S. currency. If your home currency is decreasing in value, you may wish to conduct all transactions (like student loans) in U.S. currency.

Bank Accounts

Within the first few days of your arrival, you may want to open a checking account with a bank on or near campus. You may directly deposit traveler’s checks for free in most cases, or arrange for a wire transfer from your home bank for a fee of about $35. Typically, you may make an unlimited number of additional deposits or withdrawals thereafter. Be sure to always have sufficient funds in your account to cover all outstanding checks; if you "overdraw," the bank may impose expensive fees. Also be aware that there is usually a waiting period of a few days before you may withdraw the money you deposit, as a way for the bank to protect itself from fraud.

You will most likely need some form of identification to open a checking account. The bank representative may ask you for your Social Security Number. If you do not have one, fill out an IRS Form W-8, which the bank can supply.

Most banks offer a number of different types of checking accounts. One might bear interest if you maintain a minimum balance; another might provide a limited number of free checks. Learn about all options before deciding which type of account is best for you.

Many college students appreciate the convenience of a MAC (Money Access Card) or ATM (Automatic Teller Machine) card. The card allows account holders to make deposits, withdrawals and other transactions at any time—24 hours a day—through machines located throughout campus and shopping districts. If you have an ATM card from a bank in your home country, ask whether the U.S. bank will honor it; some Personal Identification Numbers (PINs) cross national borders, while others do not. As a safety precaution, most ATMs limit the daily withdrawal amount to $300. If you happen to lose your ATM or MAC card, report it immediately to your local bank office.

Writing a check is simple. The dollar amount is written twice: once using numerals ($67.32 for example) and once using words (sixty-seven dollars and 32/100). Draw one horizontal line through any unused space after the words, to prevent someone from adding extra digits.

Once a month, the bank typically mails the account holder a statement of all transactions. It is important to make sure that their records match your records to ensure that no errors were made by them or by you. If you have a question about your account, contact your local bank office.

Generally, retail stores accept checks only if they are drawn on an in-state bank. Be prepared to show some form of photo identification, such as a driver’s license, student I.D., or passport (though you may not want to carry such an important document with you all the time).

Credit and Debit Cards

One payment option accepted nationwide is the credit card. As a matter of fact, you may find it difficult to make certain purchases without a credit card. You need one to place an order by phone, to rent a car, or buy airline tickets in most instances. A credit card is also a good idea if you want to maintain good financial records, as your monthly statement will serve as a reminder of how you are spending money.

A credit card may turn into a very expensive payment option if you are not able to pay the balance on the account within the specified grace period—typically between 20 and 30 days. Be careful to read all of the details of the credit card offer before committing to it; some companies offer a special low introductory interest rate (perhaps 2.9%), but then increase it dramatically (to about 18.9%) after that introductory period. Also know the structure of the credit card company’s annual fees, such as how much and when they charge it to your card. As always, learn all you can so that you can make an informed decision.

Some companies are reluctant to issue credit cards to international students, as they do not have an established credit history in the United States. If you already have a major credit card from your home country (like Eurocard, Access, Chargex, Barclaycard, Carte Bleue, American Express, Visa or MasterCard), bring it with you; after the U.S. bank reviews your credit limit on the foreign card, they may be more likely to offer you a credit card. Banks with which you have accounts are also more likely to accept your request for a credit card.

Debit Cards (also referred to as “bank cards”) are another option. When you open an account, you will most likely get a bank card which you can use to withdraw money from an ATM. You can also use it like a credit card to make purchases. Unlike credit cards, the money is instantly taken from your account, so if the money is not there it will be rejected.

For students new to the USA, the debit card is a great way to pay for things until you can establish credit.

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