Many students will leave home for college with little direct experience of managing their own money. Which financial accounts may a student need to take care of their finances? How should they choose bank accounts and credit cards?
Managing Student Money by Choosing the Best Accounts
Most student money management issues are based around two types of financial account. These are:
- Accounts that help them with the everyday management of their money.
- Accounts that may be used less often for specific types of purchases.
In most cases a student will typically use a checking/current account for everyday use. Many will also have a credit card account. This may be reserved for bigger/online purchases or for those that cannot be paid for upfront.
In both cases, choosing the right kinds of accounts could help manage money better. Students will be wise to spend some time comparing different bank accounts and credit cards to make sure to get as few charges as possible, flexible terms and conditions and rates to suit their budget.
Choosing the Best Student Bank Accounts
Students looking for checking/current accounts may want to consider the pros and cons of products before choosing which service to use. This could save them some money. Things to look out for include:
- Accounts that do not charge fees for everyday transactions or for holding the account.
- Accounts that do not ask for a minimum balance to be maintained.
- Savings interest rates (if applicable) that are as high as possible.
- Borrowing interest rates (i.e. for overdrafts) that are as low as possible.
Many students find it useful to use bank accounts that offer online banking services so these may also be worth looking out for.
Choosing the Best Student Credit Cards
Students choosing credit cards also need to pay close attention to the terms that they will be given. Things to look out for include:
- Credit cards that do not charge account fees.
- The lowest interest rates possible (especially if balances will not always be paid down in full every month).
- Lower credit limits to avoid getting into debt by having access to too much credit.
Both student credit cards and bank accounts may try to encourage new customers by offering additional “benefits” to the account. These should also be considered and compared before choosing which service to use.
Check Free Gifts, Offers and Incentives on Student Bank Accounts and Credit Cards
Many banks and credit card companies will offer incentives to try and attract students to sign up with them. Some, for example, will come with free gifts and discounts; others may add financial deals to the account. It is worth checking out that gifts, offers and incentives don’t hide features, terms and costs on the core product that may ultimately make a bank account or credit card less cost-effective.