How to Handle Money as an International Student

Having attended an American high school in Greece, Eleftheria Topaloglou says she was given some guidance about money matters in the U.S. But once she actually arrived in America for college, she realized she could have used more financial schooling.

“I had zero knowledge of how to open a bank account and I was very afraid that I am going to do something wrong,” says Topaloglou, who is pursuing a bachelor’s degree in applied behavioral sciences and business at Brandeis University in Massachusetts.

From opening a bank account to credit and debit cards, having some knowledge about how to handle money in the U.S. can make the transition to academic life smoother for new international students.

“Prospective international students must understand all of the standard issues that domestic students going off to college for the first time need to understand, and much more,” says Karen Zuffante Pabon, an international student adviser at Brandeis University.

Here are some of the basics international students should know:

U.S. Currency

U.S. paper currency is available in denominations of $1, $5, $10, $20, $50 and $100 bills. The currency is based on the decimal system, which means one dollar ($1 or $1.00) is equal to 100 cents.

Pratik Sinai Kunkolienker, an electrical engineering graduate student at South Dakota School of Mines and Technology, who is from India, says he was not prepared and had not really used any kind of foreign currency before his arrival in the U.S.

“The lingo associated with it was also new,” says Kunkolienker. “It was a little puzzling that the dime was smaller than the penny even though it had a bigger value. That coupled with the nervousness of doing a transaction was a little daunting at first.”

Experts recommend students become familiar with U.S. currency and arrive with some U.S. money, but avoid carrying a lot of cash. Currency exchange services are available in most international airports. Prospective international students should also be prepared to make a budget.

“The economic differences between their home country and the U.S. may also be overwhelming,” says Zuffante Pabon. “Learning to make a budget and how to stay within that budget may be a new concept for many.”

[Learn how to build financial credit as an international student.]

Bank Accounts

To avoid international transaction and currency exchange fees, experts say students should open a U.S. bank account after they arrive. During international student orientation, many schools invite bank representatives to campus to answer questions, provide information about offers, and help students fill out forms to begin the process of opening an account.

“Setting up a bank account and knowing how to use it properly is important for their time here in the U.S.,” says Beth Riley, assistant director of the international center at the South Dakota School of Mines and Technology.

When selecting a bank, she says, students should be sure to ask about things like banking fees, minimum balances, overdraft charges and international activities.

Students can open a checking account, which allows them to write checks and use a debit card, or put money away in a savings account. Most banks provide online banking, which can be useful for students with wire transfers from parents or sponsors, and some banks are entirely online.

Wire Transfer

Wire transfers, also called money transfers, allow students to electronically transfer large amounts of money from one person to another, such as for housing or tuition.

Sarah Lam, assistant vice president of international affairs at California State University–Fresno says once students have decided on a university, they will need to find out how to transfer money to that institution for tuition and other payments. She says different countries may have different policies regarding the amount of money that can be wired at one time.

“Students should ask about payment plans available in that institution to schedule payment in accordance with the policies of the university and the banking in their home countries. Students also need to be aware of the additional costs, if any, to pay online,” Lam says.

Topaloglou says in her experience the transfer fees can be very high.

“Every time my mom pays my tuition, she pays a lot in transaction fees since it is international transfer,” she says.

[Read: Common Mistakes International Students Make When Applying to U.S. Colleges.]

Debit and Credit Cards

Instead of carrying cash, Americans tend to use their debit and credit cards to pay for even small items. Contactless options like Apple Pay, which allows you to pay using your iPhone or Apple Watch, are also increasingly popular.

Most banks provide a debit card, which lets students spend money from their checking account without writing a check. You can also use your debit card to withdraw cash from an ATM, although ATMs not associated with your bank may charge a fee.

Many credit card applications will ask for your Social Security number — something most international students do not have. But according to the Social Security Administration, “although many companies, such as banks and credit companies, may ask for your SSN, you generally aren’t required to provide one if you don’t have one.” In some cases, a passport can be sufficient.

Kunkolienker recommends international students get a credit card sooner rather than later, citing its convenience.

“Now I, too, use my credit card everywhere. Hardly carry any cash,” Kunkolienker says.

Credit cards can help students start building their credit history, too. But there is a downside.

“If you do not pay the minimum balance on time or at all, your credit history can take a hit as well as your wallet with a high interest rate for paying back the balance. This will affect your credit in the future,” Riley says.

Zuffante Pabon says that while orientation is filled with important information on financial topics, it can be overwhelming for a new international student. She advises students do their research on money matters before coming to campus, so “once they arrive they will at least have a theoretical background on the situations they may face.”

More from U.S. News

What Does Need-Blind Admission Mean for International Students?

A Guide to Scholarships for International Students

What to Research About Online Universities in the U.S.

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