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> U.S.
Currency
> Establishing
a Bank Account
> Checking
Accounts
> Automatic
Tellers and 24-Hour Banking
> Personal
Checks
> Two-Party
Checks
> Cashier's
Checks
> Overdrafts
> Savings
Accounts
> Safety
Deposit Boxes
> Credit
Cards and "Buying on Credit"
> Tipping
U.S. Currency
The basic unit of exchange in the United States is the dollar
($), which is divided into 100 cents (¢). One dollar
is commonly written as $1 or $1.00. There are four denominations
of commonly used coins: 1 cent, 5 cents, 10 cents, and 25
cents. Americans usually refer to coins, not by their value
in cents, but by their names. A one-cent coin is a penny,
a five-cent coin is a nickel, a ten-cent coin is a dime, and
a 25-cent coin is a quarter. There are also one-dollar coins
and half-dollar (50-cent) coins but they are seldom found
in circulation.
U.S. paper money (often called bills: for example, a "one-dollar
bill") comes in single-bill denominations of one dollar
($1.00), two dollars ($2.00, but these are rare), five dollars
($5.00), ten dollars ($10.00), twenty dollars ($20.00), fifty
dollars ($50.00), and one hundred dollars ($100.00). You will
immediately notice that, unlike in most other countries, U.S.
bills are all the same size and all the same color. They are
differentiated from each other by the number value and with
the portrait of a different U.S. historical figure on each
denomination. At first, you may find this confusing and you
will need to watch which bills you use carefully. However,
you will become accustomed to the currency and will soon be
able to differentiate easily between the denominations. U.S.
coins also are marked with the coin's value and each denomination
is a different size.
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Establishing a Bank Account
One of the first things you should do after you arrive in
the United States is establish a bank account. It is not a
good idea to carry large sums of cash or to keep it in your
room. Most banks have main offices in the center of a city
or town. Smaller offices, called "branches," are
usually found in other parts of a city or town and in the
suburbs. Even if your bank does not have a branch nearby,
you often can find automated bank machines to serve your needs.
Banks generally are open Monday through Friday from 9:00 a.m.
until 3:00 p.m. On Fridays, many banks stay open a few hours
later. Many banks, but not all, are also open on Saturdays,
often from 9:00 a.m. to 12:00 noon. Your international student
adviser can suggest which banks are convenient to campus.
Remember that banks are private businesses. They are all
different and each one wants to get your business. You should
check with several banks to determine which bank offers the
best services for your needs. When you are ready to open a
bank account, go to the "New Accounts" department
at the bank you have chosen. A bank officer will help you
to open an account by explaining the different kinds of accounts
available and the costs and services of each one. You should
plan to open both a savings account and a checking (current)
account at the same bank, simply because it will be more convenient
for you. For example, if you have a savings account and a
checking account in the same bank, you can easily transfer
funds from one to the other. Interest rates on savings and
checking accounts vary from bank to bank. Investigate and
compare various banks and their rates of interests on checking
and savings accounts before you decide where to open an account.
Internet banks are an alternative option to traditional banks
and are another possibility to explore. The best source of
information for these will be on the Internet itself.
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Checking Accounts
Checking accounts (called current accounts in many countries)
are a way to keep your money safe and still allow easy access
to it. Checks are an easy way to pay bills, especially by
mail. Never send cash through the mail.
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Automatic Tellers and 24-Hour
Banking
Almost all American banks now offer banking privileges 24
hours a day through "automatic teller machines"
or ATMs. When you open an account at a bank, you will be issued
a bankcard and a personal identification number (PIN). You
will be able to use this card in your bank's ATM to access
your account and make transactions. This will enable you to
do such things as withdraw and deposit money, transfer funds,
and obtain your balance 24 hours a day. Generally, you can
also use your bankcard in other banks' ATMs for a small service
fee charged against your account, but only for cash withdrawals.
Banks often impose limits on amounts that can be withdrawn
from the ATM in one day, usually between $200 and $400.
It is now possible in the United States to conduct most of
your monetary transactions using only your bankcard. Many
stores have systems that permit you to use your bankcard instead
of cash to pay for merchandise. In this way, the money is
deducted directly from your bank account. Since you are not
using cash when paying with your bankcard, however, you should
keep track of your account to make sure you are not overspending.
It is a good idea to carry a small amount of cash with you
at all times anyway, since the automated banking system can
break down.
Having a bankcard is very convenient, since it can be used
all over the United States and even in other countries connected
to the same banking system. Bankcards from other countries
can also be used in the United States as long as they function
on one of the banking networks used in the United States.
Before leaving home, ask your bank if you can use your home
country's bankcard in the United States. This is especially
useful if, in case of emergency, you need to rapidly get money
from home.
Most ATMs also accept credit cards. If you have a credit
card but do not use it in ATMs yet, ask the bank that has
issued your credit card to allocate a PIN to it. Then you
will be able to use your credit card in ATMs. Note, however,
that this transaction may be considered a "cash advance"
and therefore your credit card company may immediately begin
to charge you interest. In some cases, the interest rates
for a cash advance may be higher than for credit card purchases.
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Personal Checks
Checks that you write are called "personal" checks.
You can use checks instead of money in most stores or businesses
in the United States. Usually, you will be asked to present
two pieces of identification, including at least one with
a photo, before you can use a personal check to make purchases
or to obtain cash.
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Two-party Checks
Checks written by someone else in payment to you are called
"two-party" checks. To cash or deposit such a check,
you must first endorse (sign) it. Only endorse the check when
you are ready to use it since it becomes negotiable — that
is, it can be redeemed for cash — as soon as it is signed.
To endorse a check, turn it over and, on the back across the
narrow width, write your name exactly as it is written on
the check. This is the bank's or merchant's way of making
sure that you really are the person to whom the check was
written and the person who should receive the money, either
in cash or deposited to your bank account.
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Cashier's Checks
A cashier's check is a check written for you by your bank.
You give the bank the money (or it is taken from your account),
and the clerk prepares a cashier's check. Your bank will probably
charge a small fee for this service. Usually, cashier's checks
are written for large amounts to transfer money from one place
to another. A cashier's check is easier to cash than a personal
check, and it is safer than carrying a large amount of cash.
You do not have to cash a cashier's check at a branch of your
bank; it can be cashed at any bank or business that will accept
it.
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Overdrafts
When you write a check for more money than you have in the
bank, you create an "overdraft." For each overdrawn
check, the bank will charge you a fine of $10 to $25 or more.
The bank will also return your check, unpaid, to the person
or business to which you wrote the check. If the payee is
a store or business, that payee may also charge you $5 to
$20 for the trouble the bad check has caused — and they may
not accept your checks again. It can be very expensive if
you fail to keep an accurate, check-by-check record of your
account. It is also illegal to issue a "bad" check
(a check for which there is not sufficient money in the checking
account) on purpose.
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Savings Accounts
If you plan on bringing enough money with you for the entire
school year, or even most of the money you will need, you
should consider opening a savings account. A savings account
usually offers a higher rate of interest than an interest-bearing
checking account and allows you to make withdrawals to cover
your living expenses. You can withdraw the money in cash or,
especially for large amounts, in the form of a "certified"
(bank) check. Compare rates offered by several banks to find
the best terms and benefits for the type of account you will
hold.
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Safety Deposit Boxes
Most banks maintain small locked boxes that may be rented
by the month or by the year. The contents of the box are known
only to the person who holds the key; the bank does not have
access, except in case of death. A safety deposit box is a
good place to keep valuables such as passports, jewelry, foreign
currency you do not want to exchange, and legal papers.
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Credit Cards and "Buying
on Credit"
The use of credit cards is widespread in the United States.
Banks, credit card companies, gas companies, department stores,
and other organizations issue credit cards, which can be used
to make purchases. Statements are mailed to credit card holders
once a month. If the amount due is not paid within a specified
number of days, a "finance charge" is added to the
bill. Applications for credit cards are available in many
banks and stores. Information requested includes the applicant's
source and amount of income, length of residence at the present
address, and bank information. Many companies that issue credit
cards require applicants to have a specific minimum income.
As a student, you may find it difficult at first to obtain
a credit card. However, many credit card companies also offer
special student credit cards, subject to certain conditions.
Not having a credit card can make daily life somewhat more
difficult. For example, if you are on a trip and need cash,
you can obtain a cash advance from any bank that honors the
specific type of credit card you hold. Finance charges, however,
often begin from the day you receive the cash advance.
Whether you use a credit card or sign a contract to purchase
something on credit, be careful not to build up too much debt.
Credit buying is often necessary — for example, for the purchase
of a car — but be sure you understand the terms of the loan
agreement. You may have to pay high interest rates, sometimes
as much as 21 percent.
One way to avoid building up too much debt is to delay obtaining
a credit card or making large purchases involving long-term
debt for the first few months you are in the United States.
Instead, make your initial purchases by cash or by check.
At the same time, keep careful records of your expenditures.
Do this the first two or three months you are in the United
States. By doing so, you will know exactly how much it costs
to live and study in your city. You will then be in a good
position to know when to use or not to use a credit card and
how much debt you can actually support. Every four or five
months thereafter, you should monitor your expenditures again
to make sure that you are not spending too much or building
up too much debt.
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Tipping
In the United States, tips (gratuities) are not automatically
added to bills, as is customary in some other countries. Even
if tipping remains a personal choice, it is usually expected
when certain services are provided. You should be aware that
the people who commonly receive tips are paid a wage that
is lower than those who do not receive tips. They depend upon
tips for a significant part, sometimes the majority, of their
income. The average tip is usually 15 percent, but it can
vary depending on the extent and the quality of the service
provided.
Eating Out: The expected tip in
a restaurant is 15 or 20 percent in a good restaurant with
excellent service. You should leave your tip on the table
for the waiter or waitress as you leave. If you pay with a
credit card, you can add the tip to the credit card charges
before you total the bill. The restaurant then gives that
amount in cash to your server. If you sit at a counter in
a restaurant, the tip is usually smaller; 10 to 15 percent
is sufficient. In a fast-food restaurant, the bill is paid
when the food is ordered and no tip is expected. In a cafeteria
or a self-service restaurant, you pay the cashier after having
chosen your meal and, again, no tip is expected.
Taxi Drivers: It is customary
to give 10 to 15 percent of the total fare.
Airport and Hotel Porters: It
is customary to give $1.00 for each bag.
Barbers, Hairdressers, and Beauticians:
They usually are tipped 10 to 15 percent of the bill.
Valet Parking: The attendant should
usually receive $1.00 to $2.00.
NEVER OFFER A TIP to public officials, police officers, or
government employees. This is against the law in the United
States. There is no need to tip hotel desk clerks, bus drivers,
theater ushers, salespeople, flight attendants, or gas station
attendants.
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