To protect oneself against loss or theft of funds and to assist in managing and saving money, international students will want to use banking services. Banks in the U.S. have two main types of accounts - checking and savings.
Checking accounts permit you to make monetary transactions without using cash. Money deposited in checking accounts usually remains with the bank at no interest. When the bank receives a check, the sum of the check is deducted from the individual's account.
Banks in Hamilton have many types of checking accounts. Some types require a 10 or 15 cent service charge for each check written. Others place a monthly service charge based on the minimum balance on account. If one keeps a set minimum balance, no service charge is assessed and the account might even earn interest.
When a check is written for more than the amount on deposit, an expensive overcharge is applied to the account. Overcharges can result in legal action, taken by the payee, as the bank will not honor the overdraft. To avoid this, keep careful record of your account.
Savings accounts accrue interest. The most familiar savings method is the passbook. Records of amount on deposit are recorded in the passbook. To make a withdrawal, the book must be presented with a withdrawal slip to the bank. Passbook accounts do not pay as high an interest as long-term savings accounts; however, to establish the latter, money must be placed on deposit for extended periods (from six months to several years). Money may not be withdrawn on a long-term account for less than the specified period without losing some interest as a penalty.
Most students keep both checking and savings accounts, using the former for monthly bills and keeping the balance of their monthly reserves to draw interest. This method also protects against inflation (the loss of buying power of money as a result of price increases).
Banks and commercial establishments use credit cards. This permits customers to pay bills monthly. Bank credit cards can reduce check writing by charging most purchases. These cards charge very high interest rates on unpaid balances (from 18% to 20% a year). They are not recommended if one finds it impossible or difficult to pay bills on a monthly basis.
Automatic Teller Machine (ATM) facilities allow for banking services 24-hours a day in many cases. These are very convenient since they allow you to withdraw or deposit money even when the bank is closed, or when you're far away from it.
General Banking Terms And Offerings
Credit Cards
In the United States, credit card payments have become a very widely used method of making purchases from most retail outlets, over the phone or even the Internet. They have the convenience of making purchases of several hundreds of dollars without carrying cash, but they can become a financial problem if you are not regular or are unable to pay back soon enough. Every month you accrue interest of about a dollar for every sixty dollars unpaid. There may be charges of $15 or so for payments over a month overdue.
Some cards offer the convenience of automatic payment every month from your bank account. You may pay the entire balance you owe, the minimum due (which is a small fraction of the balance), or even a fixed amount in some cases.
You should get a credit card that has no annual fee, unlike the American Express card that has a $55 fee. The different kinds of cards available are Visa, MasterCard, American Express, Optima and Discover. Many different banks offer the first two, and these are the most widely accepted. You should get a card or a rejection letter within a month of applying for it. It might be a good idea to ask current international students on how to successfully apply for credit cards.
Automatic Teller Machines (ATMs)
An ATM is a computerized machine that allows you to make cash deposits and withdrawals. Almost all banks have automatic teller machines that can be used 24-hours a day. To operate one, you will need a plastic card (given to you when you open an account) and your personal identification number (PIN). Generally there is a service charge for using your ATM card at other banks' ATMs, but no service charge for using your ATM card at any of your bank's branches.
Money Transfer
It is easier to receive money from foreign sources once you open a bank account. You should have the following information ready when you want to receive funds:
- Your account number
- The sender's bank address and account number
Some of the other details vary from bank to bank.
Traveler's Checks
These may be purchased at any bank, credit unions, and some travel agencies. They are useful for travel because they can be replaced if lost or stolen. You may be required to show two forms of identification - e.g., driver's license, credit card, passport - you can immediately cash checks at the following places:
- The bank which issued the check
- Any branch of your bank(s)
Some grocery and drugstores will cash your personal and payroll checks if you have a "check-cashing" card. For information on the application procedure and policy, contact the individual stores.
Paying by Check
Some stores will accept checks instead of cash or credit cards. The store will usually require two forms of identification - generally a credit card and photo identification - when you write a check for payment.
It is a violation of U.S. law to write or cash a check when you know that you do not have sufficient funds in the account.
Wiring Money From Overseas
You may wire money from your bank in your home country directly to your bank account in the U.S. Transfers should take 2-3 business days. The cost is approximately US $10 if you have an account at the receiving bank and US $30 if you do not. You should verify the cost with your bank.
If you want to wire money, you must follow these steps:
- Call a wire service and request that your money be sent to the main branch of your bank
- Instruct the main branch to "Pay Upon Proper Identification" and give your name as the recipient. You may collect your money at the bank with proper identification - e.g. Driver's license, passport, Colgate Student ID, credit cards.
Wiring Tuition Payments
Contact the Student Accounts office at 315-228-7812 for further assistance.
Foreign Currency Exchange
Foreign currency can be changed immediately at most large banks. However, it is advisable to shop around for the most advantageous rates.
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