Written by: Marilee Falco, CFP®, ChFC
In my last blog entry I wrote about Credit Cards for college students. As a quick follow-up on that, my daughter Chelsey was denied a credit card by Capital One. Apparently her wages were not sufficient to qualify. In some aspects I regard that as a good thing, that credit card companies are no longer issuing easy credit to people who should not have credit cards. My solution: I have a Capital One credit card that I never use, so I called Capital One and I was able to add Chelsey to my account. She was issued a credit card with her name on it and will build credit under her Social Security Number. Since the account is under my name I’m responsible for the bill. The one negative is that my credit limit is rather high. I trust my daughter, but I do prefer student credit cards that have very low credit limits. The reason I wanted her to have a Capital One credit card was to avoid foreign transaction fees while she is in London, and Capital One is one of the few credit card companies to offer that feature.
Chelsey is leaving for London for 3 months on September 9th and she’s going to need a checking account that she can connect with there. The bank Chelsey currently banks with does not have any affiliations with banks in London. She has saved a lot of money working this summer and would like to have access to her cash. We wanted a debit card that would not charge ATM fees. I read an article in Kiplingers’ newsletter about this topic. Apparently, Bank of America has an agreement with several banks in Europe, one of which is Barclay’s Bank in London. If Chelsey uses her Bank of America ATM card in a Barclay’s ATM, she won’t be charged ATM fees. We have a couple of Bank of America branches in the Allentown area, but none that were convenient and we never banked there. But, Chelsey does now. I went to a local branch and spoke to the Branch Manager to confirm the ATM access in London. I made sure to open a checking account that would not charge monthly fees. Bank of America does not offer Student Checking per se, but does offer some options that were satisfactory.
The important thing to note about student checking accounts is that every student’s situation will be different. You have to research the local banks in the city or town where your child will be attending college. Most colleges work with a specific bank on campus to make things convenient for the students. My son went to Penn State and they have an affiliation with PNC Bank, so he set up his checking account with PNC. Chelsey goes to college in Boston, so PNC was not an option for her.
The main considerations when opening a bank account for your college student are (1) convenience for you and your child and (2) bank fees. Once you’ve narrowed down a bank, research the various accounts the bank offers to find the account that is most economical and offers the features that your child wants and needs.
The first thing we did once we established the account at Bank of America for Chelsey was to order $100 of British Pounds. We got £65 and it cost $114 with fees. The reason we made this request was so that Chelsey would have cash in her pocket upon arrival in London, in case of emergency. I didn’t want to send her across the pond alone and without cash.
Now my daughter has a credit card, a debit card and British currency in her wallet. From a financial perspective we have her covered when it comes to spending money.