Financial Wellness: Credit Cards and Checking Accounts

In an ideal world, cash should be accepted as a solution to paying bills. But in our current world, there are many reasons why people should be using a credit card or checking account.

• Landlords will often check your credit score before renting an apartment.
• Paying your rent with a check is considered a receipt and ensures a contract with the landlord.
• Making timely payments with your credit card and checking account can help increase your credit score.
• Most car rentals or hotels will require a credit card.

Below are some resources on how to consider which credit card or checking account best suits your needs.

Abridged from the Yale Office of International Students and Scholars

https://oiss.yale.edu/getting-started/new-students/preparing-for-yale/money-finances/banking-debit-and-credit-cards

How to Choose a Bank

• When looking for a bank, shop around a bit since fees can vary - you should especially consider fees and policies for the types of transactions you will be making most frequently, such as ATM withdrawals, online banking, and bill payments.
• Be sure to select a bank that has ATMs near your residence or work.
• Ask your friends and colleagues for recommendations.
• Always inquire about no fee accounts or other special offers.

Charge Cards

Debit Cards

Most banks issue a debit card with the opening of a bank account. A debit card not only looks like, but functions like a credit card; the main difference being that charges are directly taken from your bank account. Paying with a debit card can help you budget your expenses since you must always be careful you have enough funds in your account to cover any charges.

Credit Cards

You need a credit history to get a credit card, so initially it might be difficult to obtain one. Many students and scholars will use their debit card as an alternative before they have established a credit history. Once you have begun to establish credit, your credit card company will periodically raise your credit limit and it will not necessarily correspond to what you can actually afford. Be very careful while spending with credit cards.

U.S. credit card companies offer greatly varying arrangements - from cards that require security deposits, a membership fee, and high monthly interest rates (APR), to cards with no membership fee, and low to no interest rates at all. Once you have established some credit history by owning a card for six months or more, you may wish to shop around or call your credit card company and ask for a better arrangement such as lower interest rates or no membership fee. The U.S. Federal Trade Commission provides consumers helpful information about choosing and using credit cards. You will need a U.S. Social Security Number to apply for a credit card.