Want to put a little extra spending money in your pocket
If you are taking debit or credit cards to college, following
some smart tips can make the difference between a few extra pizzas and a pile
From the best deals on bank accounts to financial security
in the dorm, here are eight things you need to know:
1. You can save big bucks by shopping
automatically apply for a campus debit card. Instead, shop around for a bank
account and debit card you can use on campus.
of these campus debit cards come loaded with fees -- even 'per transaction'
fees," says Joe Ridout, consumer services manager
with Consumer Action. "Just
because the school promotes a card doesn't mean that card is the best one for
A February 2014 Government Accountability Office study found that while campus card fees were generally in line with cards offered by banks, not all card issuers were forthcoming with information.
"Shop around and don't take it on faith," says Chris Lindstrom, higher education program director for US PIRG, which issued a 2012 study that criticized campus debit card fees. "For as many deals [as] we found [that] were good, we found campuses where
students could have gotten a better deal down the street."
2. You have a choice with overdraft
debit card will be refused if the purchase takes your account below $0. But if you
give the bank permission to charge overdraft fees, the debit card will keep
working even after you are out of money. And you will get charged a fee -- often
about $35 -- every time you use the card, says Chi Chi Wu, staff attorney with
the National Consumer Law
debit cards, the biggest problem is the overdraft fees," Wu says.
(46 percent) of 18-to 25-year-olds are charged overdraft fees, according to U.S.
PIRG's study. And 61 percent of the overdrafts were for purchases, not ATM
percent of college-age consumers paid 10 or more overdraft fees each year -- more
fees than any other age group, the study found.
financial institutions need your written consent in advance before they can
allow your account to dip below zero and start charging overdraft fees. Wu suggests declining that option, or revoking your consent
if you have agreed to it in the past.
It is easier than ever to track purchases and receipts
If you use your debit card daily, it is even more important to know exactly how much money
you have in your account. Three free options for keeping tabs include:
- Apps and online offerings from your own bank or
- Websites such as Mint.com that allow you to integrate
and track finances.
- The "notes" function on your phone.
No matter which option you choose, recognize
that not all purchases are deducted from your account the minute you make them.
Some may take several days, or even a week, to clear, says Michelle Dosher,
managing editor for the consumer education department of the Credit Union
You can hurt your parents' credit
If you run up a balance you cannot pay on your parents'
credit card, you are potentially hurting their credit scores, says Dosher: "It's
your parent's credit that's on the line."
Want to avoid problems? Have a talk with Mom or Dad to spell out exactly
what the card is meant to cover, says Dosher. If they use fuzzy terms
like "for emergencies," get specific and have them spell out exactly
what constitutes a card-worthy emergency.
There's a lot of marketing of 'student cards,' and
then there's what's good for students. And they're not necessarily the same thing.
You have free access to your credit history
At least once a year, pull all three of your credit reports and make sure everything is accurate, says Anthony Sprauve, spokesman
for myFICO, a division of FICO. If you've never managed credit before, the likelihood of you even
having a credit report is small. But if you've got a student loan, odds are that's in
You are entitled to pull your credit reports from each of the big three credit bureaus -- Equifax,
Experian and TransUnion -- for free annually through AnnualCreditReport.com. You often have to pay to view your credit scores. However, some
credit card companies, banks and credit unions provide scores for free as a
the keys to building a good credit score are:
- Paying on time
- Keeping your monthly usage to 20
percent of your available credit line or below
- Paying off the entire card balance every
don't need multiple credit cards to have a good score," he says. Instead, Sprauve
suggests getting one good, all-purpose card, using it and paying it off judiciously.
You probably can get a credit card, but maybe you're not ready for one
Years ago, enrollment in college almost guaranteed you a
credit card. "The Credit CARD
Act changed that," says Dosher, referring to federal credit card legislation signed
into law in 2009.
Now, if you are under 21 and want a card, you either need
verified income (enough to pay the bill) or a co-signer. "Credit
card companies are allowed to consider grants and loans" as income, as
long as a student is receiving an amount greater than the tuition bill, says
But even if
your loans and grants cover more than tuition, that is not exactly disposable
income. You still need to do other things with the money. Such as buy books. And eat. So while you
may qualify, it is often smart to stay out of the credit card arena until you
have actual disposable income to dispose of.
'Plain vanilla' cards are preferable
If you do have some disposable income, opt for a general use credit card with no annual fee
that has good terms and a low interest rate, says Ridout. Remain skeptical of "student cards," he says. "There's a lot of marketing of 'student cards,' and
then there's what's good for students. And they're not necessarily the same thing,"
for the card that best suits you, he says. That probably means a
general-use card (not a retail store card), with a low interest rate and no annual
fee. "For a
student, there's absolutely no reason to be paying an annual fee," Ridout
8. Limit potential ID theft
In a dorm, you share a communal environment with little
space and less privacy. Safeguard your cash, debit cards, credit cards and
personal financial information. Also, use private devices and access banking information on
Never write down PINs or passwords. Force yourself to log in to financial sites each time rather
than saving passwords or logins. You do not want your bank or card pages to pop
up if someone trolls through your phone or surfs on your computer. And devise a secret hiding place for your debit or credit card.
"You just need to recognize that it is money," says
Ira Rheingold, executive director of the National Association of Consumer
See related: 4 reasons why college kids need a credit card, A look at student credit cards