Confused about bank account for daughter off to college

[aprilchem]

As a college professor, I'd suggest you have your child open her own bank account at a brick-and-mortar bank in the town where her college/university is, and that she order checks (at least one box). Some payments for college (such as memberships in honorary organizations) require payment by cash or check. Plus, it's a good step toward financial independence - she can learn about direct deposit (assuming she'll have some sort of paying job on campus to earn spending money- most students do), budgeting her funds, and making decisions about financial expenses.

 

[clutter]

When dd went off to school 750 miles away, she opened an account for herself at a local credit union. She has any earnings from jobs deposited there and she uses that for anything that she pays for. Long before she left, we'd opened an account for her that was joint - she had been under 18 at the time. We use that for funds for the things I pay for. I deposit a monthly budgeted amount and she writes a check for rent and uses the debit/visa to purchase food and gas. I also added her as an authorized user to my credit card for expenses that aren't monthly such as text books, supplies, car maintenance. She also recently opened her own credit card account so she could establish credit and get experience having to pay it off each month.

Personally, I prefer a credit card to a debit card - I refused to carry the visa logo on my own bank card until they finally told me they were going to charge a fee for a non-visa one - because of the safety factor. My Chase Disney and SouthWest Visa take turns getting compromised. Each one pretty much on an annual basis. Most times, they do the trials - vending machines, taxicabs (that was kind of odd), grocery store, etc - and I catch it before there is any damage. It's a seamless process to deal with, and I'm probably close to besties with the security people there. For a Visa debit card, it's just that extra step of having to get the funds replaced that I don't want to deal with. I did limit my exposure by unlinking my savings account, but I'm just not comfortable with using the debit card. That said, my dd and I are both pretty disciplined spenders, so it's pretty low risk.

 

[trenty]

Neither of my children switched banks when they went off to college. Both did have a very low limit Discover student card that I did not have to co-sign on. They were responsible for paying the CC, but if they needed something essential, they could put it on the card, and I would pay it, either directly through their CC account or by just sending them $ through Venmo. They both found they needed very little cash while away at school.

 

[trenty]

Does her university have a Credit Union on campus? I know that is sometimes an option.

 

[DizMe]

Does her university have a Credit Union on campus? I know that is sometimes an option.

We live in California. She is going to a specialized 2-year program and will then transfer to university which may or may not be in California, so that's part of my dilemma--I'd like to set up something that will work no matter where she ends up going.

One plus to her school/major: they have an "in" with Disneyland for student jobs in entertainment Something funny her department chair told us, though. He warned her not to turn Disneyland into her end goal. He said many students fall in love with the job, attention, and satisfaction they get and make it their career, and while that's all great stuff when you're young, in the end it's still a $10/hr gig. She makes a lot more than that as a gymnastics coach but she doesn't get to perform, so she's eager to give up coaching to be a DL entertainer. I hope that process is a good learning experience.

 

[tvguy]

Asking, not telling ... are the two card types equal in building a credit rating?
.

A debit card does nothing for your credit rating. It is basically a digital checking book.

 

[QueenIsabella]

Asking, not telling ... are the two card types equal in building a credit rating?


Good choice. The predatory lenders don't care whether your student has enough rope with which to hang herself. 5K sounds high to me. My girls went away to college with a "very small" credit card that allowed them to charge no more than $300, but they attended /attend a school that provides textbooks as a part of tuition, and they didn't have cars as freshmen and sophomores; thus, their potential emergencies were small.

The reason we did $5k, for this particular student, was that she loves to travel. She's been to Spain, Peru, Ecuador, Italy, England, and literally turned 23 in Paris last month. She flies to Cuba next week. We wanted her credit card to be able to cover an emergency plane ticket from another continent. As it happens, she's never needed one, and at this point, she's an employed college graduate. Your point is well-taken, however--most college kids don't need access to thousands in unsecured credit.

 

[crisi]

We are electing to just keep my daughter's current account, even though there are no branches in the city she will be in. I spoke to her and my husband about a local account and both of them looked at me like I'd grown two heads. If she needs a local account, she can set one up for herself, but she seldom needs cash and her debit card will work fine.

And like QueenIsabella mine travels a lot - and has been an authorized user on the Amex since she was probably 13 for that reason. That will handle emergencies.

She knows all about direct deposit, since she has a job. And she's been managing her own expenses for years.

 

[Luv Bunnies]

Our DS goes to college 2500 miles away. We have found it very easy for all of us to bank with Chase. They have a "Quick Pay with Zelle" option that allows us to transfer money from our account to his pretty much immediately. He gets an email alert every time we make a transfer so he knows when he can access the money. We also have the option to put money on his student ID card so he can make purchases around campus. We have not used this option yet. It seems just as easy for him to use his debit card at the bookstore or food court. Last semester, his debit card got hacked (someone tried to buy dating services in Bulgeria!). He was able to walk down the street to a Chase branch and get a replacement card between classes.

 

[runwad]

My middle DD is an hour away at school. PNC is the branch on campus so we opened her a student account there(we also have a branch at home). She had already had a credit union savings/checking account here at home since she was 16 so she knows how it all works. But we opened the PNC so she had access to getting cash at school. Plus it turns out she has an on campus job and its just easier to have her pay direct deposited in that account so she has access to the money.

We don't transfer any money into her account, she's responsible for working and paying all her own expenses. She's also been an authorized user on one of our cards since she was 16 so she was able to open a Student Discover IT card on her own at 18. She enjoys using it for regular expenses, gas, food, etc and earning the rewards dollars!

I taught her when she started using a debit card at 16 to keep all her money in her savings account then transfer whatever she needed to debit into her checking, then use her debit card. So she only buys what she has the money for. Now she charges on her discover and immediately turns around and pays her discover off online so she never has a balance.

Hopefully she'll keep doing it that way all her adult life and never carry a credit card balance!