US Monetary System

The US Monetary System is a decimal system, with one dollar equal to one hundred cents. One dollar is written as $1 or $1.00. One cent is written as 1¢. One dollar and twenty-five cents would be written as $1.25. Dollar amounts are written with a comma every three digits, so one thousand dollars would be written as $1,000.00. Paper currency is used for amounts of $1 or more, and coins are used for amounts under $1. The most common coins and their dollar equivalencies are as follows:

Paper currency is most often circulated in the following denominations: $1, $5, $10, $20, $50, and $100. Occasionally you will encounter a $2 bill. The denomination of all currency is clearly marked on the bottom of both sides of the bill, and on all four corners. Some stores will not accept bills larger than a $20

Checking Accounts

• You will need a checking account to pay bills, such as rent and utilities. It is not safe to send cash through the mail. It also is not safe to carry large amounts of cash on your person, so you should pay for most of your purchases using a check or credit card.
• To open a checking account, visit a bank and ask to open a checking account. You will need to deposit money into the account when you open it. You can deposit cash or traveler's checks, or arrange for a wire transfer from your home bank (cost around $35). American Express also offers a variety of services that make it easy to withdraw money from your checking account back home. Additional deposits and withdrawals may be made at any time.
• The bank will ask you for your Social Security Number. If you are exempt from this requirement, fill out an IRS Form W-8, which you can obtain from the bank
• If there insufficient funds in your account to cover the check, the check will "bounce" and your account will be overdrawn. This means that the bank will refuse to honor the check and will return it to the depositor. In addition, the bank will charge you a bounced check fee of $15 to $35, so it is important to make sure you always have sufficient funds in your account to cover any outstanding checks.
• If you want your bank to honor checks even when your account is overdrawn, you must ask for overdraft protection. There is an extra fee for this service, and the amount your account is overdrawn up to a limit is treated like a short-term loan. (You pay interest on the balance due.)
• When writing a check, the amount of the check is written twice, once using numerals and once using words. If you were writing a check for $23.35, you would write the words as "Twenty-three and 35/100 dollars", where the word "and" separates the dollar amount from the cents. You would write $23.00 as "Twenty-three and NO/100 dollars". Draw a horizontal line through any leftover space, to prevent someone from adding extra digits to the amount.
• At the end of the month the bank will mail you a statement showing all deposits and withdrawals from your account, as well as the current balance of the account. They will also return to you any cancelled checks. Cancelled checks are checks you wrote that have been processed. They are stamped (cancelled) to indicate that the money has been withdrawn from your account. Cancelled checks should be saved, since they provide proof of payment. This is especially important when you need a receipt of payment, such as for the security deposit on your apartment. You should reconcile the statement against your checkbook to make sure there are no errors.
• Most banks offer a variety of checking accounts. Some banks will offer a "free" checking account with no monthly service charges if a minimum balance is maintained in the account. Typically the minimum balance is $1,000, although some banks require as little as $500 and some banks as much as $2,500. If your visa allows you to work and you receive a regular paycheck, you may be able to avoid the monthly service charges by having your paycheck direct deposited into the account. Also, certain checking accounts will pay interest if a minimum amount of money is kept in the account. Such accounts are known as "Checking with Interest" or "NOW Accounts". But the interest rate on these accounts is very low compared with other investments, so you are better off putting your savings elsewhere.
• When you deposit checks into your account, there is a waiting period of a few days before you can withdraw the money. The length of the waiting period depends on the bank upon which the check is drawn. Local banks will have a shorter waiting period than out-of-town banks. This delay is to protect the bank in case the check bounces.
• Most checking accounts will include a debit card you can use to withdraw money from your account at any ATM, 24-hours a day. This lets you make deposits, withdrawals, and other transactions at any time, even when the bank is closed. ATMs are very convenient because they are located throughout the city near shopping areas and sometimes even inside grocery stores. Most people do not carry a lot of cash, because they can get cash from an ATM when they need it. ATMs limit the amount of your daily withdrawals to a maximum of $300, as a safety measure.
• If your ATM card is ever stolen, notify the bank immediately. Your liability for a stolen or lost card is limited to $50 if you report the loss promptly.
• Be careful in selecting an ATM to use, because the bank that owns the ATM can charge a fee in addition to any fees your own bank may charge for ATM withdrawals. So it is best to use your ATM card to withdraw money only from ATMs owned by your bank. Although you can make withdrawals from almost any ATM, deposits should be made only at your bank's ATMs.
• Some banks offer a debit card that combines the features of an ATM card with a credit card. You can use it like a regular Visa card, except the charges are directly debited from your checking account. This is in contrast to regular credit cards, which provide a grace period of 20 to 25 days for you to pay the bill before interest is charged. On the other hand, it helps avoid the temptation to carry a balance on the card. If you don't already have a credit card, it is worthwhile because international students sometimes find it difficult to qualify for a credit card after arriving in the US
• In recent years, utility companies have started offering direct debit services, where they deduct the monthly bill directly from your checking account. There is no charge for this service, and it saves you the cost of a postage stamp. It is recommended that you sign up for the direct bill payment services offered by the utility companies.
• All of your bank accounts are insured against loss up to $100,000 by the Federal Deposit Insurance Corporation (FDIC). The FDIC is a federal agency that protects you against losses caused by bank failure.
• Most students choose the bank that is most convenient for them. This may be the bank with a branch closest to their home, a bank located adjacent to the grocery store, or a bank near school. Another consideration is the fees charged by the bank (especially for ATM card usage) and the minimum balance required for waiving the monthly service charge.
• Bank lobby hours typically run from 9:00 a.m. to 4:00 p.m., Monday through Friday. Some banks open as early as 8:00 a.m. or as late as 10:00 a.m. Some banks are open on Saturdays. Very few banks are open on Sunday. Most banks are closed during national holidays.

Credit Cards

• If you pay for purchases at retail stores using a check, they will want to see some form of identification, such as a driver's license or a major credit card (Visa, MasterCard, and American Express). A passport can also serve as a photo identification, but it is not wise to advertise that you are an international visitor. Also, checks are only accepted if they are drawn on an in-state bank, so you cannot use them if you travel out of state.
• Credit cards are such an ingrained part of the American way of life that you will have trouble making certain purchases with anything other than a credit card. If you want to place an order by phone, cash a check, rent a car, or buy airline tickets, you need to have a credit card.
• So it is better to use a credit card to pay for purchases. But you must take care to pay off your balance in full at the end of the month. Otherwise you will incur interest on the balance. This can considerably increase the balance due.
• Many international students find it difficult to get a credit card in the US, because they do not have an established credit history. So if you already have a major credit card such as a MasterCard , Visa or American Express, it is a good idea to bring it with you. American banks can check your credit limit on the foreign card, and this may make them more likely to issue you a credit card. Also, if you opened a checking or savings account with a bank that offers credit cards, it may be easier to get a credit card from that bank since you have money on deposit with them.
• The Bank Rate Monitor and CardTrak web sites also provide information about the least expensive credit cards.
• The major credit cards in the US are Visa, MasterCard,and American Express, Visa and MasterCard are offered by many banks and financial institutions. American Express is offered by only one financial institution, but are accepted by many businesses.

Traveler's Checks

• Traveler's Checks are one of the safest ways to transport money. If the traveler's checks are lost or stolen, you can easily get them replaced. Do not countersign the checks until you are ready to use them
• If you bring traveler's checks with you to the US, you should bring traveler's checks that are denominated in US funds. Most businesses will accept US-denominated traveler's checks. Taxi drivers and bus drivers will not accept traveler's checks, so you should bring some US currency with you as well.
• Within the US, you can purchase traveler's checks from many travel agencies, banks, Thomas Cook, and American Express offices for face value plus a 1% commission. The American Automobile Association (AAA) sells them to members without charging a commission.
• Aside from the AAA, the three largest sources of traveler's checks are American Express (1-800-221-7282), Citicorp (1-800-645-6556), and Thomas Cook (1-800-223-9920).

Exchange Rates

Some banks will exchange foreign currency for a fee but no bank, however, will exchange foreign coinage. You can also exchange currency at the airport or at a major hotel. You can also exchange currency through Thomas Cook Foreign Exchange. Call 1-800-287-7362 for the closest location

Exchange rates are usually printed on the financial pages of the local newspaper. You can also get daily exchange rates from several web sites

• Universal Currency ConverterT from Xenon Laboratories

It is a good idea to read the advertising circulars that accompany the Sunday newspaper carefully, to familiarize yourself with current prices on a variety of products. This will help you learn to think in dollars, and to distinguish a bargain from a rip-off. It is also helpful to measure the cost of items relative to a common expense, such as the cost of a candy bar or can of Coca Cola. You can use this to get a close feel for the cost of an item. For example, a $5 lunch is inexpensive and a $20 lunch is expensive

International students sometimes run into trouble because of fluctuations in the exchange rate. If your home country's currency is decreasing in value, it is strongly recommended that you conduct all transactions in the currency of the country in which you will be studying. For example, try to get loans issued in the foreign currency. Otherwise, if the value of your country's currency drops, you could find that you have much less money than you expected.