In order to receive paychecks and organize your money, you will certainly need an American bank account. Luckily, there are two excellent near-by options for which you can sign up immediately:
- PNC bank
This is one of the bigger banks at the east coast and you will find plenty of ATMs in State College, Philadelphia, New York etc. There are three versions of the PNC Checking Account: PNC Virtual Wallet, PNC Virtual Wallet with Performance Spend and PNC Virtual Wallet with Performance Select. Depending on your income (or your average balance) you might be eligable to get the second or third one free of charge. They give higher interest rates in your saving account (up to 0.8%) and with Performance Select you can withdraw money from any ATM free of charge (you get reimbursed for any costs another bank may charge you). IMPORTANT: Sometimes there are great offers that allow you to get 100-300 USD for just signing up. Make sure you google beforehand to see if you are eligable for such a deal, for instance this one.
- Penn State Federal Credit Union (PSFCU)
This is the local Credit Union for PennState members which means there are not so many ATMs and you may have to pay some fees if you take out money at ATMs of other banks. However, PSFCU does offer some very generous options for loans (if you need them at some point) and for their credit card (you will usually get a credit limit of 3000 USD as graduate student which is six times as much as you get at PNC). The higher credit limit for your credit card is in particular useful to build up your credit history.
Another good bank for students is Ally bank. It is an online bank, meaning all interactions with the bank are done online or via phone support. They do not charge any fees regardless of your balance or income. Moreover, all ATM withdrawals within the United States are free, which means that even ATM fees (charged by the ATM) are reimbursed. Finally, Ally bank offers a comparably good interest rate (0.9%) for its saving accounts. Ally bank does only provide a debit Master Card, but no credit cards.
Tranferring money within the US
For some international student the banking system of the United States might seem like coming from the previous century: people pay bills by actually sending real checks and in order to use a credit card it is often enough to know the full number printed on it (for online purchases, one often needs an additional 3-digit number printed on its back). However, most banks offer online banking within the US comparable to the European bank system.
The following bullet points offer some advice on what
- Don’t do wire transfers: Electronic wire transfers are often made by calling the bank or directly at the counter. They are usually rediciously overpriced (10-20 USD) and only relict (possibly only to make money from customers that are not aware of cheaper and more convenient options).
- PNC bank offers pop money: If you have a PNC Virtual Wallet (or a similar PNC bank account), you should have online access to a system called pop money that allows free money transfers of up to a certain amount at the time (500-1000 USD). You only need the account and routing number of the person, you are sending money to.
- PSFCU offers online bill pay: Even if the online management might look like as if it came right from the beginning of the internet, you can easily transfer money online. You only need the account and routing number of the person, you are sending money to.
- With Google Wallet you can attack money to your emails: A very modern approach to transferring funds is offered by Google Wallet. It is a free service for which you can apply as soon as you received your social security number. You will receive a free Google Wallet Master Debit Card that you can use to pay anywhere in the US using the funds from your Google Wallet account that can be connected to any of your bank accounts. Moreover, you can instanteneously send money to other Gmail users via emai.
Transferring money to other countries
If you are an international student, you might want to transfer some of your earnings back to your home country. However, this is often connected to high costs because you will need to pay both transaction fees and currency exchange fees. Even if it looks like that you are not charged any fees, almost every bank will still use a currency exchange rate that is lower (by 1-5%) than the official interbank rate (the exchange rate that international banks use as they transfer funds).
There are basically three ways to try to get the best possible deal:
- If you have a credit card which does not charge additional exchange fees (such as the VISA Debit card of PSFCU), you can use it to withdraw money from an ATM in your home country when you are visiting. In theory, you could even open an additional account and send the credit card to your parents or friends, so that they can take out funds whenever you want to transfer money there. In general the conversion rate used by credit cards are very good (unless you have additional fees/percentages taken by your bank). However, the credit card company (VISA or MasterCard) usually charges 1-1.5% from the interbank rate. This is almost the best you can get.
- If you want to transfer large amounts, you can check with the bank in your home country if they accept international checks in foreign currencies and if they will use the official interbank rate to cash it. There are a few banks that do this and those are the rare occasions when it might be better to pay a 20 USD fee to get an international check from your American bank. For instance, if you transfer 5000 USD, 20 USD correspond to only 0.4% that you will pay. However, make sure that the bank in your home country really uses the official bank rate, because otherwise you may pay an additional 1-5% to your bank due to a disadvantageous exchange rate.
- There are online services, such as transferwise.com or currencyfair.com that only charge approximately 0.3-1% of your funds. Usually, CurrencyFair offers the best rates at its MarketPlace.
You can read more about Currency Exchange here.
Building a Credit History
If you want to get a loan in the United States or sometimes even if you just want to open a bank account, the bank will check your credit history. There are three rating agencies that collect relevant information and thus it is often a good idea to start building a credit history as early as possible. After opening a bank account at PNC and/or PSFCU, you can ask if you can get a credit card. You might have to wait for a few months until you are eligible, but once you are it is a good idea to get a credit card, possibly even from both instiutions. It may sound crazy, but it is really a good idea to get those credit cards, even if you are not planning to use the credit card at all to get credits. If you have credit cards and always pay your credit bills (even if there is nothing to pay because you don’t take a credit), your credit rating will go up. On this website you can learn more on how to build a good credit rating. Furthermore, you can find step-by-step instructions on this website that are helpful to start with.
Even if you are not planning to get a loan in the US, it might still be a good idea to first build a good credit rating and then apply for premiere credit cards:
- A good credit rating is important to get certain credit-like store cards, for instance for Macy’s with a good price reduction.
- A good credit rating allows you to get credit cards with bonuses and cash backs, for instance Chase offers up to 5% cash back on eligable purchases.
- Some of these bonus cards even let you collect bonus miles of certain airlines in order to travel much cheaper around the world. It is rather messy to really get into the details, but there are people who gain free transatlantic flights by applying for the right cards and collecting the right bonuses. More on this can be learned from websites like flyertalk.com.