Should You Open a Bank Account in the U.S.?

“Yes, because your life will be a lot easier.”

Before you learn further about doing your personal banking, let’s see how many ways you could pay an energy (usually for electricity and gas) bill.

1. Pay by phone or online: you need your bank account information (or e-check) or debit card or credit card ready.
2. Mail in your personal check to the energy company.
3. Pay your bill in person at one of the energy company service locations.

Documents You Need for Opening a Bank Account

1. Your unexpired passport and I-20.   Remember, there is an I-94 form attached in your passport.   Do not detach the form.
2. Your student ID
3. A driver’s license (if you have one)
4. Proof of your residency in the U.S. (many banks don’t need this one)

Personal Banking – Checking or Savings Account? Or Both?

-Is a savings account better than a checking account?
-Do I earn more interest with a savings account?

Checking Account

• It’s for your daily expenditures.   You are likely to pay your bills and purchases with this account.
• You are going to obtain your personal checkbooks and you can pay for something by your personal checks.
• There may be a required monthly minimum balance for this account to get service fee waived.
• There are certain checks (for example 5 or 10 checks)  you could write a month without extra charges.
• Usually, a checking account has a lower interest rate or it may have ZERO interest.

Savings Account

• This account is for the money you are not going to use immediately.
• There could be a minimum amount for opening a savings account.
• The interest rate is higher for this account.

Personal Banking – Debit or Credit Card?

Let’s take a look at their differences.   First, before you decide which one you are going to have, please keep in mind that many U.S. banks now only issue debit cards but not credit cards to international students.  Without a Social Security Number, most  banks could not issue a credit card to you.     (You still could look around.  Some banks may do without the requirement.)

The differences between a debit card and a credit card are:

Debit Card

• It does not build up your credit scores.
• Every time you use your debit card, the amount you spend will be subtracted immediately from your bank account’s balance.
• Don’t need your signature to use your debit card.

Credit Card

• It can build your credit scores gradually if you pay your credit card bills on time every month. If you don’t pay the credit bills on time, you will have to pay very high interest rates, usually 14% – 20%, depending on your credit score.
• Every time you use your credit card, the amount you spend will be added to the total amount for your credit card’s monthly bill.   You can pay the bill partially (usually the minimum amount required by your bank and interest will occur) or in full to avoid any penalty.
• You may have to sign to verify you are the authentic card owner when you purchase something in a store with your credit card(s).  For some stores, if your purchase amount is below certain amount, you may not need to do so.   As of May 25, 2020, major credit card companies Visa, Mastercard, Discover, and American Express—all have eliminated their requirements for a card holder’s signature when a transaction is made.  Although these companies eliminated their credit card signature requirements, businesses or stores still have the right to ask a card holder for his or her signature if he or she wants to pay by a credit card.

Related reading: Tips on Saving More.