Confused about bank account for daughter off to college

[DizMe]

She is moving 500 miles away. Currently, she has a Capital One money account (no fees) that I opened under my Cap 1 checking account a few years ago; I could keep track of it and she could easily mobile deposit her work checks and the debit card had no international fees. It recently rolled over into whatever the account becomes when the child turns 18.

Do we just keep that account? Should we add, say, a no-fee student Bank of America account since we parents have BofA accounts and there is a brick-and-mortar bank across from her apartment?

She will now be making payments for utilities etc, but her dad and I will pay her apartment rent directly.

Thanks for any suggestions/input.

 

[tvguy]

If you can keep the existing account, I'd do that.
We opened a joint account at my bank and linked it so I can transfer money in and out, but my daughter can't access our accounts. Based on my relationship with the bank, there is no charge for the account. It is a normal account, not a student account. I could track her spending and add money as need be. She went away to college 200 miles away, and then studied abroad for a year.
She's been out of school for several years now, but we have kept the account open with $200 in it. As a "Millennial" she has never had checks, does everything electronically, but discovered there are a few stone age situations where she has had to have a check. When she bought her car in April, she was all set to transfer her down payment via her debit card, but the car dealer would only take cash, cashiers check or personal check. As it was Saturday night, the first two were out of the question. So I wrote a check, she transferred the money from her Credit Union to the joint bank account to cover the check I wrote, I transferred the money from the joint account back into the checking account.

 

[Psychodisney]

I had my DD open a checking account at the bank we bank at locally (Chase). I am on her account. She also opened a checking account and credit card at the University credit union. She spends mostly on her credit card and pays from her checking account. I try to discourage debit card use. I ordered her checks from Costco so she has some just in case( cost less than $12 for 200 checks). She plans on using her credit card to pay utilities bills if she can or paying electronically from the checking account.

If you think she'll use the debit card for cash, I'd go with the BOA since she will have easy access to it.

I had my kids keep their savings separate from what they expected to need for the semester in their checking.

 

[Marionnette]

She is moving 500 miles away. Currently, she has a Capital One money account (no fees) that I opened under my Cap 1 checking account a few years ago; I could keep track of it and she could easily mobile deposit her work checks and the debit card had no international fees. It recently rolled over into whatever the account becomes when the child turns 18.

Do we just keep that account? Should we add, say, a no-fee student Bank of America account since we parents have BofA accounts and there is a brick-and-mortar bank across from her apartment?

She will now be making payments for utilities etc, but her dad and I will pay her apartment rent directly.

Thanks for any suggestions/input.

We set up a checking account for my son at a bank that had branches and ATMs on campus (no fees to withdraw cash) and also had a branch near me. There more more than a couple of times that I had to deposit CASH into the account so that he wasn't overdrawn. The kid had a steep learning curve when it came to understanding that your "balance" isn't always your actual balance.

 

[Hikergirl]

My dd has her own checking accounts but doesn't have a branch where she is going to school. We are just going to deposit money in to one of the accounts at the local branch here and use that as her "savings". She can transfer funds from that one to the other online. I'm going to suggest she keeps the "savings" card locked up and just use the other account for cash and purchases. That way if something happens to the one card, she has the other one and will still be able to access her money immediately.
Since your dd will be using it for bills and utilities it may be a good idea for her to open an account at BOA since they have a branch near her campus.

 

[lcsmom]

What you do will depend on how you expect her to pay for expenses. Will she be paying for groceries out of "her" money using her debit card? Will you give her a credit card to pay for supplies or extra meals? We have Capital One as our bank and our daughter managed to get through college, three states away, without a local bank account. She graduated in 2016. She was instructed to put most expenses on the credit card I gave her. Every time she used that card her Freshman year, I got two texts - an alert from the card issuer and one from my daughter telling me what she was buying. I didn't need the bank alerts the next three years. Her main issue was she had no checks and getting cash from ATMs incurred some hefty fees. She got pretty creative at reimbursing her roomies for shared expenses. With Zelle and electronic banking, that wouldn't be an issue now. There are times when checks will be required; various clubs may ask for checks even in this day and age.
That being said, I second the idea of opening a BoA account. Have her pay all of her expenses out of one account. You put money in the other account. She becomes responsible for transferring money from one account to another. A very controlled way to learn to budget.

 

[kymom99]

At my son's school you have the option of turning the student ID card into a debit card. Then you can use it to get cash from on campus. We opted not to do this since my son's debit card is from 5/3 and they have ATMs on campus.

 

[a1tinkfans]

TSA great when ur bank of choice is on campus. The student account changes at acertain age... watch those fees!!!
Best of luck to ur graduate!!

 

[MillauFr]

I don't think you need to open an account at a brick and mortar bank these days. I closed by US Bank account 10 6 years ago and just started using by Brokerage Account with Fidelity. I don't use cash any longer but if I do they reimburse all of the ATM fees. With mobile deposit no need to deposit checks at an ATM. I push people into just using VENMO or PayPal if they want to send me money.

 

[StephMK]

DD18 is going several states away to college and has convinced me that she does not need a new account. We already have a joint savings and checking acct for her but I thought she needed one that she can access locally. She says she won't use the ATM much and does not see any reason to need a branch. Since she's on campus, we'll go with that.

In your DD's case, I guess it depends on if she has any bills that she can't pay electronically. As long as she can pay them online, then a local account probably isn't necessary.

 

[MrsPete]

I don't know anything about Capital One checking, and I had only a so-so experience with BOA. My thoughts:

- I'd advise her to keep the account she's had for a while. When she is only a little older and is applying for a loan to buy a car or rent an apartment on her own, having had an account for a long time will help her credit rating -- she doesn't need to keep much money in that account, but just keeping it open will be useful in the future. But that has nothing to do with day-to-day college life.
- I agree with the poster above who suggests helping her to arrange things so that ALL her expenses come out of one account -- at least as a freshman. Most kids have enough trouble managing their money without stopping to think about which account should cover which expenses.
- What ATM machines are located ON her campus? That's where I'd have her open an account. She likely doesn't need more services than online and an ATM can provide for her.
- Even Millennials need checks occasionally; my daughters all have checking accounts and use them. Similarly, I don't agree that bank-and-mortar banks are unimportant; years ago we had a banking mistake (their mistake), and we had an awful time resolving it -- weeks and weeks of phone calls. We agreed that we would always bank with a bank that we could drive to and speak with a person. We haven't been sorry.
- Someone mentioned turning the student ID into a debit /credit /whatever card. Beware of this. The deal my daughters' college offers is this: You put money onto the student ID, and they call it an Express Card. It's good for meals, xerox copies, laundry, bookstore, and other on-campus expenses. Here's the two hitches: If you don't spend it by the end of the year, you lose it. And it's only good on campus, so the student can't opt to find a better price off campus. When my older daughter was a freshman we put a bit of money on such an account for her, and thanks to a number of unexpected expenses (who'd have thought Chemistry students would need to supply their own safety goggles?) she DID use all the money ... but after that year, we started giving each girl X amount of money on their debit cards for emergencies.

 

[DizMe]

Some great advice so far! I like the idea of having her learn to manage her money and to use one account for all payments. I was planning to keep the Capital One account but wasn't sure about whether or not to open another at our main bank in the event that I needed to get money to her quickly. It's right next door to her apartment (not on campus). I haven't used Venmo or Zelle but I'm willing to give it a go.

 

[DizMe]

Also, what would be the reason for using a credit card over a Visa debit card? I assume the parent is a co-signer, and any suggestions as to which type cc?

 

[gottalovepluto]

I had a similar college situation. What my parents and I did was find a brick & mortar bank present in both cities, I opened an account and my Mom was a signatory on it so she could make deposits. She took told me when she did & I managed the account & paid my own expenses. (My roommate’s expenses were directly paid by their parents, because I was responsible & had the trust of my parents I learned young how to manage my own expenses, something my friends didn’t get until after college. Yes, my parents funded the account but I was able to learn about dealing with expenses.)

FWIW I was happy with a physical bank because sometimes I needed coin for laundry and I could just go to the bank for a roll of coins. Also I had my own credit card, a student one, as a freshman which I managed 100% on my own. I charged odds and ends to it, not much. I learned about credit, built my credit history, never had a late payment- BUT know your kid! Are they ready? Will they pay off every freaking cent? I know kids who racked up cc debt like there was no tomorrow because “they have so much debt already, whatever, they’ll just pay it off when they get their job”. That ended badly, obviously, so know your kid before advising them down that road. (It was pre-housing crash, I know things have changed since! My parents were not co-signers.)

 

[barkley]

Also, what would be the reason for using a credit card over a Visa debit card? I assume the parent is a co-signer, and any suggestions as to which type cc?

i live near a college town and overhear constant financial drama at merchants so here's some examples of why it's good in an emergency-

their medical insurance hiccups so their regular or newly prescribed med shows as costing $400 vs. a $20 co-pay and it's after 5 p.m. or a weekend and no one can reach the insurance company to straighten it out,

their financial aide (or the direct deposit from another account) hiccups so their tuition for classes that started TODAY didn't get paid and they need to come up with several thousands NOW,

the textbook store is out of the book they should have purchased 3 weeks ago and the only available option is overnight rush from amazon...


unless the student has a significant chunk of emergency reserve in their account (or mom/dad do and can transfer it in a heartbeat when they are at the pharmacy with a big line behind them or at the university billing office) a credit card is good in a pinch.


we had dd set up a savings ('share') account and a checking at our local credit union b/c it has the free atms on the campus. she had her financial aide and other income sources direct deposit into savings with auto transfers on different days of the month for rent/utilities/insurance/household budget...that way she's only dealing with the money in her budget each month vs what looks like a gazillion dollars to a college student b/c it's the funds that are supposed to last the entire school year. we put her as an authorized user on a VERY low limit credit card through the same credit union for emergencies AND to pay for all school supplies (which is transferred from the share account to pay for BUT that way we can easily track it for taxes each year). the bonus w/the credit card is that many through credit unions participate in the 'passport' program which gives deep discounts on local (and national) restaurants and other businesses. there are MANY local businesses around the colleges that participate.

if you decide to go with a credit union make sure it's one with shared banking privileges to a brick and mortar near you.

 

[gottalovepluto]

i live near a college town and overhear constant financial drama at merchants so here's some examples of why it's good in an emergency-

their medical insurance hiccups so their regular or newly prescribed med shows as costing $400 vs. a $20 co-pay and it's after 5 p.m. or a weekend and no one can reach the insurance company to straighten it out,

their financial aide (or the direct deposit from another account) hiccups so their tuition for classes that started TODAY didn't get paid and they need to come up with several thousands NOW,

the textbook store is out of the book they should have purchased 3 weeks ago and the only available option is overnight rush from amazon...


unless the student has a significant chunk of emergency reserve in their account (or mom/dad do and can transfer it in a heartbeat when they are at the pharmacy with a big line behind them or at the university billing office) a credit card is good in a pinch..

The emergency situations are a very good point! Not only did I have my personal cc (which had a very low limit) but my parents made me an AU on one of their credit cards and told me to use it in emergency situations (like car breaking down).

 

[gottalovepluto]

Also, what would be the reason for using a credit card over a Visa debit card? I assume the parent is a co-signer, and any suggestions as to which type cc?

If you have to co-sign it don't forget to monitor it, whether you login to the account or watch it on a credit app (like credit karma). I'm not talking, monitor each smoothie charge they put on it type monitoring, I'm just talking watching to make sure the balance is paid off in full every month so that YOUR credit doesn't pay the price if your kid messes up. (Obviously if you care to monitor each smoothie charge that is 100% your business if you are a co-signer on the card, the above is simply imho and varies dramatically from person to person )

 

[QueenIsabella]

When my oldest turned 18, I helped her set up a checking account and got her a joint credit card. Initially, the credit card had a huge limit, like $30k--we dialed that back to $5k (now that she's graduated and working, we upped it to $15k).

She uses the debit card 99% of the time. She has TD Bank, and they have an app to check her balance, she gets a ding every time she uses the debit card, she deposits checks via her phone, etc. She's written maybe 5-6 checks in the past 5 years. The credit card statements still come to me, but she only uses the credit card for uber/lyft and place tickets home, so I'm okay with that. Very occasionally, she might use it for a medical co-pay, but she always asks first--she's very independent, and proud of the fact that she pays for herself.

Our thinking with the credit card was, we wanted her to have it for emergencies--medical problems, an urgent flight home, renting a hotel room if her apartment was condemned (don't laugh, this sort of happened to her). She's been very responsible, but our other thought was, this gave her a chance to sink or swim, financially. She's never abused her credit, so it worked out well. This time. For this kid.

I didn't feel the need to monitor her, but she was pretty responsible and mature from the outset. Now, DS21--he's not getting a credit card any time soon. Even HE knows he's not mature enough to avoid impulse purchases.

 

[tvguy]

TSA great when ur bank of choice is on campus. The student account changes at acertain age... watch those fees!!!
Best of luck to ur graduate!!

I hadn't thought about fees, I haven't paid a bank or credit union fees probably in the last 40 years. I just checked my credit union and checking is free as long as your balance averages $500 a month and there is no minimum balance if the account holder is under age 21. My bank is not so generous, they require a $25,000 minimum balance for free services. But if the students account is jointly owned with a parent with $25,000 balance, that counts too. So check the fees and shop institutions.

 

[MrsPete]

Also, what would be the reason for using a credit card over a Visa debit card? I assume the parent is a co-signer, and any suggestions as to which type cc?

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

When my oldest turned 18, I helped her set up a checking account and got her a joint credit card. Initially, the credit card had a huge limit, like $30k--we dialed that back to $5k (now that she's graduated and working, we upped it to $15k).

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.

i live near a college town and overhear constant financial drama at merchants so here's some examples of why it's good in an emergency-

their medical insurance hiccups so their regular or newly prescribed med shows as costing $400 vs. a $20 co-pay and it's after 5 p.m. or a weekend and no one can reach the insurance company to straighten it out,

their financial aide (or the direct deposit from another account) hiccups so their tuition for classes that started TODAY didn't get paid and they need to come up with several thousands NOW,

the textbook store is out of the book they should have purchased 3 weeks ago and the only available option is overnight rush from amazon...

Eh, these emergency examples seem to be largely created by lack of use of one's resources:
- Universities today typically require that students either show that they have medical insurance OR buy the school's medical insurance, and this is all verified when the tuition is due (about a month before classes begin, eliminating the hiccup thing). Regardless, the student could purchase the Rx from his or her university health center for a reduced price, and they offer OTC cold meds at a reduced cost too. Remember that a fairly big chunk of tuition is going to support that health center -- use it instead of the pharmacy. Don't underestimate what the health center can do; they can provide allergy shots, set broken bones, and more -- they're not just for strep throat and birth control.
- If financial aid "hiccups", the student can easily go to Student Accounts and ask for an extension. Lots of students have scholarships or financial aid that are a bit slow, especially in the fall semester. Paying with a credit card would just build up interest costs and create a difficult situation in which the university would need to reimburse the student after the financial aid comes through.
- Amazon provides fast delivery for textbooks without additional charge; regardless, the cost of delivery pales in comparison to the cost of the textbook itself.

More realistic student emergencies -- and most of these are not really emergencies /could be fixed without spending money, but none of them are fiction either -- I heard them all from my own daughters, though some were stories about friends:
- The student runs over a nail and needs to have a tire plugged.
- The student realizes that he must provide his own safety goggles for Chemistry class.
- The student confidently enters the book store with $300 in hand, but finds that a freshman Chemistry book costs $360, and there's a $60 workbook too for the same class ... and that's only one class.
- The student foolishly leaves the $360 Chemistry book on a library table while he goes to the restroom, and someone steals it. Yes, people will steal textbooks ... they're highly re-sellable.
- The student brought his high school TI84 to college, and the Calculus professor says nothing fancier than a TI30 may be used on tests.
- The student spills soda on his laptop (or falls asleep with it on the top bunk, and it falls to the floor), and although he takes it to the campus tech-help place, it can't be saved.
- The student loses (or breaks) his or her cell phone.
- The student's roommate moves out, taking all the pots and pans plus the silverware. It wasn't nice stuff, but it needs replacing.
- The student goes to the bookstore to order nursing scrubs and finds out they cost $90/set ... plus the potential nursing student must pay for a background check through the sheriff's office and buy a $10 parking pass for the hospital.
- The student is offered an opportunity for extra credit in a class, but it requires buying a ticket to a moderately pricey event.
- The student is told only days ahead of time that his class will present their recent projects to a professional group meeting on campus, and they are to dress professionally.
- A hurricane is coming towards the town, and the university is evacuating all students who don't have cars or rides. They're putting the students on a bus and bringing them to another university further inland. The students are given sleeping bags, a spot in the host's school's gym, and free meals in the cafeteria for the few days they're in this dire situation, but students still need personal money for other unexpected items -- they did only have an hour to pack and report to the evacuation bus -- say a pizza because they missed the limited meal times or sanitary supplies or a cell phone charger, or even just a ticket to the movies as a respite from this situation. (This is the real plan for our nearby university; they don't have to use it often.)
- The student attends a university that's physically large, and he uses a bike to get from one side of campus to the other. He also uses the bike to get to his part-time job. One day he's lax in locking the bike, and it's stolen. Or it's vandalized.