Life as a college or grad student is not exactly synonymous with having a lot of money or time.
And just because your net worth is not in the six or seven-figures (yet!), you deserve to have a solid set of money tools and accounts that have no fees and are easy to use.
More than half of Americans who go to college open bank accounts (54%) and credit cards (51%), according to a survey of more than 1,000 college-educated U.S. adults, conducted by Propeller Insights on behalf of Varo Money.
Here’s what to look for when opening these types of money accounts.
If you’re moving to a new city or state, you might want to want to look for a bank account where you can do all your transactions through a mobile app, like Varo. Luckily, switching bank accounts is not hard.
Here are a few more features that may be especially appealing to college and graduate students:
With Varo Bank Account you can also set up direct deposits into the account, deposit checks by taking a picture with your phone, and even deposit cash at the Green Dot® Network, such as CVS, Walgreens, and 7-11 (although, the merchant may charge a fee).
Plus, Varo doesn’t have any foreign exchange fees, so you can use the debit card during a semester abroad without having to pay extra fees, and there are fee-free Allpoint ATMs in Australia, Canada, Mexico, Puerto Rico, and the United Kingdom. There are also nifty features, like real-time transaction alerts, early direct deposits*, and Save Your Change.
Savings accounts are pretty straightforward. Deposit money, keep it separate from your checking so you’re not tempted to spend it, and earn interest to grow your savings. Unfortunately, many savings accounts at traditional banks have such low-interest rates you’ll earn next to nothing.
If you have extra money from working or a student loan disbursement, you may want to keep it stashed in an online-only savings account, as they tend to offer higher rates. The Varo Savings Account’s 1.50% Annual Percentage Yield** is much higher than the average at the five largest national banks, which is a meager .02% APY. There is no minimum balance requirement or fees with a Varo Savings Account.
Checking and savings are the banking basics, but what about a credit card? It’s a good idea to start building your credit report and history while you’re in school as long you can control your spending.
In fact, four out of 10 students say they use a credit card to buy back-to-school supplies, according to the Varo/Propeller survey.
Of course, we have to say the obvious: Handle a credit card responsibly; getting out of a high-interest debt trap is going to be expensive. That said, if you’re ready for a credit card, look around for student credit cards that don’t have an annual fee or foreign transaction fees, are part of a rewards program, and give you extended warranties on purchases. If you have no credit history, a secured card could be good place to start too.
Using a credit card, making on-time payments, and keeping your balance low will help you establish and build your credit history. Having good credit can help you get approved for other credit cards or loans with a low rate and favorable terms, and make it easier to rent an apartment.
Louis DeNicola is a freelance personal finance writer and credit enthusiast. You can find him on Twitter @is_lou.