Are you new to the US? A new student or new to the workforce and wish to optimize your money to give you the most returns and perks? If you go through this article and others mentioned on the blog, you’ll have everything at your fingertips.
Determine the length of your stay
This is particularly important as it can change your goals long/short term based on what is achievable for the time frame you are in the United States.
If you are a new grad student (2-5 years of Masters/PhD) and plan on working post graduation or return to your home country, whatever I am about to cover is possible to cover to a lesser/more extent.
For this article I am going to use my example of a Master’s student who started working post graduation and how the right planning gave me the most returns.
Get a Social Security Number
If you wish to play this game (one with constantly changing rules/restrictions), you need a SSN which you may learn more on how to get by reading my article here.
Understanding Bank Account Sign Up offers
Most banks in the US will have sign up offers for opening a Checking/Savings account with them provided you are a first time customer. You do not need to be physically located next to these banks to open an account with them online to meet their requirements and get the signup offer.
Do keep in mind most requirements are along the lines of you making direct deposits (you paycheck gets deposited electronically to the account) or depositing minimum amounts for a certain period of time.
It’s best to target Bank accounts which has low direct deposit amount requirements as they are easier to meet. Hence I recommend most people to sign up for a Chase Checking Account which I cover in this Article. It has a $200 bonus for just direct depositing one paycheck no matter the amount.
It is also important to create a Chase Bank account as early as possible to establish a relationship with them as it will come handy when we enter the credit card space.
Another easy offer is the $100 BoA Checking which I cover here.
Keep in mind it’s best to open certain accounts with sign-up bonuses and once you meet them, either go to a local branch or call in and submit a Student ID Proof as they will change your account type. Confirm with every bank what qualifies as a student account because some Banks will not let you convert your account if you are 24+ and a student.
For more offers, I generally just google: “Best bank sign-up offers” and go through lists and pick one which is valid for my state and can meet requirements.
Understanding Credit Cards
Whether or not you’ve been exposed to credit cards before, understand that they’re accepted in the US virtually everywhere. Whether it be at the grocery shop, gas station, restaurants or to book travel among other examples, I can assure you there is a card that gives you a high return per transaction.
When you are new to the US, you don’t have a credit score – a rating given to you by credit rating agencies – so it may be tough getting approved for a few cards. Note that you need a Social Security Number in order to apply for most credit cards. If you do not have a SSN, consider checking out the Deserve Card article which does not require one.
Referencing to my point of making a Chase Bank account as soon as you arrive, this will help them get a peak at your financials and they will conclude whether or not you will be a good customer for them. Hence, while it takes 6 months of data for them to do that, you can apply for the Discover IT Student card (in depth analysis and review). Here are a list of Chase Bank Pre-requisites in order to be eligible and approved.
In short this cash back card has categories which you can get returns from and you have to activate those categories. But the main purpose of this card is to help you start building a credit profile which you can monitor through their app. It’s best practice to keep no balances and always pay off the card in full. Increasing your credit limit is pretty useful early on and you can learn more on that here.
Your main job is to monitor everything is handled correctly and please do not forget to set-up auto-payments to avoid missed payments (very bad for your credit score). You may refer to my “Boost your credit score” article here to know how to quickly build that number up.
Please keep in mind, your first application will not be automatically approved and you may be required to call in and ask them it they need supporting documents. It is harmful to your credit profile to keep re-applying to the same card multiple times and you can learn more on that here.
If you are ever denied for a card, you may follow my steps to appeal which I cover here. Once you however have a credit card in hand, make sure you use it correctly and avoid common mistakes people make that I cover in this article. I personally advise people to treat a credit card like a debit card in the sense of not overspending and landing yourself in debt.
Additionally, do not fall trap to the salesmen/women pushing you to open/sign-up for in-store credit cards at places like Macy’s, Target, etc…, as it may adversely affect you if you are unaware of it later on or do not manage it properly. If someone ever tells you you may open a card to get a discount and ask your SSN for that application – best walk away and say you’re not interested. The last thing you want is to have a collections on your file for a card you had no idea you had.
In future articles I will be further expanding and diving deeper into the credit card tips/tricks, useful ways to save money and also grow your money as time progresses without actively having to do much. If you’d like to be updated when I publish future articles, consider following the blog.