10 Money Mistakes College Students Should Avoid

Most students don't have a ton of margin for financial error, so be sure to avoid these mistakes.

College is the first time many teenagers are in charge of their own finances, which can be a recipe for mistakes. I know I was definitely nervous to keep of track of my finances on top of being overwhelmed by school and making new friends.

Most students aren’t swimming in money when they head to college, so they don’t actually have a lot of room for financial errors if they don’t want to be stressed about money for the rest of the year, or even their entire academic career. If you’re going to college soon, are in college or have kids in college, read on to learn more about the solutions to the 10 common money mistakes college students make.

1. Overusing a Credit Card

While swiping a credit card all the time might feel painless, this method of spending money can become harmful. Failing to pay off your credit card balance can lead to high interest payments if you’re not careful. (See how your spending affects your credit with a free credit report snapshot on Credit.com)

2. Going Out Just Because Your Friends Go Out

In college you can make friends with people who come from different backgrounds. Some of your friends might be super wealthy, or they may just spend their money irresponsibly. Either way, “going with the flow” could end up costing you a lot. Find ways to say no to your friends’ constant requests to order pizza delivery, or try to get a job so you have some extra cash to use when you hang out with your friends who are a little more careless with money.

3. Not Looking for Scholarships

College counselors will tell you that scholarships are like free money. If you don’t take the time to apply for scholarships, you’ll never realize how much money (that you’ll never have to give back) you could be receiving. Even small scholarships can add up if you receive several of them. You can win scholarships even if you’re not a freshman.

4. Skipping Classes

Sleeping in every once a while or skipping class because you just don’t feel like going is actually costing you a lot of money. At some of the country’s most expensive colleges each hour of class can cost upwards of $150. Going to all of your classes helps diminish your chances of failing a class, which is ideal because if you fail you’ll only have to pay more to take the same class again.

5. Missing Out on Free Stuff

Going to college gives you a ton of perks — think of the libraries, gyms and cultural experiences all around you. Instead of leaving campus to go to a gym, the movies or a restaurant, you should use the gym at school, go to movie nights that clubs host and scout out free food to save money. (Here are 50 things you can get for free.)

6. Buying All Your Supplies at the Campus Bookstore

New textbooks already cost a ton, and after they’re marked up at the campus bookstore they cost even more. You should buy used versions of your school books if you can, but always check Amazon and other online marketplaces, as they might be even cheaper than anything at the bookstore. Renting books is another solution, too.

7. Not Doing Your Research When Shopping

Students need to learn the art of comparison shopping so they don’t just buy the first thing on the shelf at Target. If you take a few minutes to check the price of your favorite body wash on a couple of sellers’ websites, you’ll find it easy to always buy the cheapest products.

8. Spending All Your Money

Budgeting is something many college students neglect to do, and that comes back to bite them. If you finally have a supply of money and no parents telling you to what to do with it, the first thing to cross your mind probably isn’t “I should save half of my money!” You’ll probably be tempted spend it all. Think of all the things you want to do in the future: have a job, own a house and maybe have kids. If you don’t save your money, it’ll be harder to make those dreams a reality.

9. Confusing What You Want With What You Need

Many students struggle to tell the difference between what they need and what they want. I sometimes feel like I need Starbucks, but in reality I’m just overspending by buying a shaken iced tea every day.

Instead of spending on things they only want, students should think before they buy, or find cheaper ways to get what they want—like making their own coffee or buying tea bags in bulk.

10. Staying in School Longer

Education is amazing, but the cost of staying in college for an extended period of time? Not so much. If you have student loans, your debt will only increase. On top of that, students with more debt are already putting themselves behind for life after college. Make sure you plan for the future, and try your best to graduate on time so you don’t have to lose extra money by staying in school longer.

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16 Ways for Broke College Students to Cut Costs

Budgeting can be a struggle for many college students.

Every college student is familiar with the struggle of budgeting. Between tuition, housing and dining hall meal plans, college doesn’t come cheap. Unfortunately, many of these mandatory expenses make college students pressed for money the moment they step on campus. According to the National Center for Education Statistics about 85% of four-year college students receive some type of financial aid, which suggests most students on campus don’t have the financial resources to splurge whenever they feel like it.

To help you during your time at college, here are 16 tips that can help you save money, and in some cases, time or the environment.

1. Show Your Student ID While Making Purchases

College students spend a lot of money, so small business owners are very appreciative of the presence of a university. Many local businesses in college towns, and surrounding cities, give college students discounts so long as they show their university IDs.

2. Buy Things in Bulk

Toiletries, food, water, cleaning supplies, socks — you name it, college students should buy it in bulk if their living situation has enough storage space. Making bulk purchases at stores like Costco, Target or Walmart can help you save in the long run. Plus, if you end up with extra food or supplies, you can sell that inventory to friends or hall mates.

3. Use Groupon or Other Online Coupon Services

Groupon currently has an offer where college students get 25% off local deals. Taking advantage of these discounts can help college students save on services like haircuts, yoga classes, manicures, fitness gyms and more.

4. Take Public Transportation

It’s true we’re living in the age of Uber and Lyft, and sure, it might be faster to drive most places, but you’ll save so much cash in college if you take public transportation. Plus, utilizing buses and trains is better for the environment.

5. Use Cash Instead of Credit

Research from NYU professor Priya Raghubir and University of Maryland professor Joydeep Srivastava shows that using physical cash makes people less likely to overspend because they “feel the outflow of money” more directly. Spending too much on a credit card can also lead to high interest charges if you don’t pay the balance in time. Cost-conscious college students may want to trade plastic for paper. (See how your credit card spending affects your finances with a free credit report snapshot on Credit.com.)

6. Find Free Food on Campus

College campuses are overflowing with student organizations and sports teams, so there’s usually something happening on campus all the time. One of the main ways clubs get people to come to their events: free food. Scoping out events with complimentary food will save you a few bucks, and you might meet new friends by checking out a performance or club meeting.

7. Buy Online or Used Textbooks

New hardback textbooks are some of the expensive required materials a professor can expect you to buy. Instead of buying an actual textbook, go for an online version, which can be much cheaper. If an online version of a textbook doesn’t exist, try to buy a used version from a friend or an online site.

8. Sell Your Textbooks at the End of the School Year

When all your books pile up after finals, don’t just take them home and let them collect dust on the shelf. Instead, sell them to underclassmen you know, or use services like bookscouter.com or half.com to sell them. Some university bookstores buy back textbooks as well.

9. Track Your Spending

College students often go wrong when they make numerous purchases but eventually lose track of them due to having so much on their minds. Utilizing an app like Mint or even a trusty pen and notebook, students can track their spending and see if they’re adhering to their budgets. If you are constantly aware of how much you’re spending, you’ll be less likely to spend money on unnecessary items.

10. Don’t Sign Up for Subscriptions You Can’t Afford

While Netflix and Hulu might seem reasonably inexpensive, those seven to ten bucks a month quickly add up! If you really need a binge-watching fix, you can always borrow DVDs from the library on campus. Other subscription services like Amazon Prime, Spotify and Pandora can also cause you to lose money over time. Canceling those services can help students avoid monthly payments that rack up.

11. Borrow Books From the Library

Along similar lines, some English or humanities classes require five or more books per semester. To save money, borrow the books from the library instead of buying new paperbacks every time.

12. Get Free Refills on Coffee & Tea

It can be super difficult to stay away from caffeine, especially when you’re a college student spending long hours in the library. To save money, head to a chain that gives out free refills on your favorite caffeinated drinks. Starbucks offers free refills of hot, or iced, brewed coffee and tea. Most McDonald’s and Panera Bread locations also provide free refills on hot drinks, and soft drinks, too.

13. Keep Snacks on You During the Day

Food at campus cafes or markets, or even in vending machines, can be overpriced. So when it’s time for an afternoon snack, make sure you’re prepared with snacks of your own. This way, you’ll save a few cents or dollars each time you get hungry, and eventually that money accumulates.

14. Go Thrift Shopping

Besides being a fun activity to do with friends, thrift shopping is a great way to save money. It’s a smart move to save money on trendy clothes you might not wear for very long, especially in college towns or cities with ever changing weather.

15. Skip the School Supplies

Instead of wasting money on pencils, notebooks and highlighters, take notes on your laptop or tablet. Not only does this trick save the environment, but also it allows you to avoid unnecessary spending on school supplies you’ll just have to repurchase for the next school year.

16. Cut Back on Buying Music

Sure, iTunes is great, but constantly buying the newest songs from your favorite artists can be a big hit to your wallet. To save, consider using a service like Spotify or Pandora to get free music whenever you want. If you really can’t stand advertisements, Spotify offers a student discount for its premium subscription that comes without ads!

Want a few more ways to save money? Here are 50 free things you can get this year

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Planning the Perfect Gap Year Doesn’t Have to Break the Bank

14397435_10153850115048483_1785139792_nThe gap year — taking a year off from formal education to travel, participate in social projects, or gain work experience — is growing in popularity among American students. Just ask Malia Obama. The first daughter announced back in May that she would be taking a gap year before attending Harvard University.

She’s among those contributing to a 22% increase in American students taking part in the practice already common among students in Europe and Australia, according to the American Gap Association. Some families spend hundreds of dollars on gap-year consultants.

Like Harvard, many higher education institutions encourage students to take gap years. The reason: a push toward experiential learning. Schools increasingly see value in the life experience, maturity, and other skills that gappers return with.

“We have more information in the palm of our hands than ever. So why are we teaching [students] information? They don’t need information,” said American Gap Association Executive Director Ethan Knight. “They need experience to know what to do with that information.”

Jamie Hand, 23, a senior at Middlebury College in Vermont, echoes the sentiment. She said her gap-year trip to São Luís, Brazil with Rotary Youth Exchange allowed her to “take a break from this rat race that I felt like I was in.” At the time, she was 18 years old and wanted to take time off before beginning her freshman year. Though she already had a high school diploma under her belt, the program involved taking classes at a local high school in Franklin, W. Va.

“It felt like I was taking this big breath and I was free to excel but I didn’t have to excel,” said Hand. “It was one of the times when I learned the most in my life [because] I didn’t have to.”bike_ride_in_brasilia

The Cost of a Gap Year

Gap years may seem like a privilege only available to families wealthy enough to finance them. It’s true that some gap-year programs can easily cost more than a year’s worth of college tuition. Families pay over $35,000 — close to the average cost of a four-year degree these days — to participate in the “Global Gap Year,” a program offered by Thinking Beyond Borders, which offers gap-year and study-abroad programs. During their global year abroad, students split their time between homestays on three different continents.

But the gap-year experience isn’t just for the super-rich.

MagnifyMoney caught up with some current and previous gappers to find out how they made it work.

Go the DIY Route

Brandon Stubbs, 18, motivated by his interest in Southeast Asian archaeology, decided to defer his acceptance to Brown University for a year to travel to Malaysia for two months this fall.

Rather than paying for a trip through a travel agency, which could easily have cost several thousand dollars, he did some research on his own. Stubbs found a hostel in Johor Bahru, where he will be able to work in exchange for room and board.

To save on airfare, he booked a round-trip ticket to Malaysia for just $500 with StudentUniverse, a site that offers cheaper fares to students. When he’s not working, Stubbs plans to spend his free time sightseeing and exploring the city.

imgp9570“I’m most excited to explore an entire different area of the world,” said Stubbs, who said he grew up enthralled by the exotic locales in movies like Indiana Jones.

When he returns to the U.S. from Malaysia in November, Stubbs’ gap year will continue with a stop in New Orleans. He plans to take time off for the holidays and then move to the Big Easy, where he’ll work at a hostel in exchange for room and board.

“I feel like taking a gap year will sort of increase my momentum. High school wasn’t an easy experience mentally,” said Stubbs. “I feel like in a year I’ll be rejuvenated and ready to jump back into my studies.”

Get College Credit for the Program

A great way to save money and kill two birds with one stone during a gap year is to earn college course credits along the way. Some schools offer course credit to students who take gap years. Students may even be able to use financial aid dollars toward their gap-year experience.

Some schools have specialized programs or fellowships for gappers like UNC Chapel Hill’s fellowship, or Princeton University with its Bridge Year. Others, like Elon University, offer their own version of an experiential learning program for first-year students.

There are even some gap-year programs that will not only give you a stipend, but contribute to the cost of your college education like those offered through AmeriCorps or City Year.

Work Now, Play Later

Breaking up a gap year into smaller trips or working for part of the year can help to reduce overall costs. If you budget well, the money you earn could fund your travels.

Jericho, Vt., student Asher Small, 19, who will begin his first semester at Brown University this fall, also worked at a ski resort in Utah for part of his gap year.

“It was kind of like a dream job because I love to ski,” said Small. In addition to his $8/hour wages, the resort subsidized his room and board, leaving him with just $300 to cover each month.

Small worked at the ski resort for four months. Before making his way back home, he took a road trip through Southern Utah and California and participated in a 10-day meditation course retreat. To save on lodging, he used couchsurfing.com, a service that connects benevolent hosts with houseguests. He estimates he ended up saving about $2,000 from his work at the resort after the trip.

Working or interning during a gap year can also be a great way to build skills or experience for the subject you’re interested in majoring in once you get to school. Some programs will pay you for work abroad or offer perks like free room and board as an incentive. For example, if you have a green thumb, you could volunteer to work at an organic farm or winery through a program like World Wide Opportunities on Organic Farms during your gap year in exchange for food and accommodation.

Before he went to Utah, Small spent the first half of his gap year in Desab, Haiti, with Volunteers For Peace, a nonprofit volunteer organization. There, Small taught an English class to local residents. The trip cost him about $1,500 in total, which he paid with funds he saved from past summer jobs.

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Stay Close to Home

Keeping your gap-year experience stateside can be an easy way to minimize travel expenses, reducing the overall costs of a gap year. Staying in the U.S. doesn’t mean you’ll have any less of a cross-cultural experience.

Start Saving Early

Knight recommends planning your gap year at least six months from the date you want to travel, so you’ll have ample time to save up.

Stubbs worked all four years of high school as a junior college tutor and as a camp counselor at a music camp. Doing so helped him to save about $3,000 to spend on his trip to Malaysia and Louisiana.

Small worked over the summers prior to his gap year as well. Those funds helped him with his trip to Haiti.

Tap into Your Savings

If your parents have been saving up for college, you may be able to use some of that money to finance a gap-year program, although it may mean sacrificing going to a more expensive college.

Gabe Katzman, 24, was considering the University of Maryland, where he would pay in-state tuition, and other, more expensive out-of-state institutions at the time he was planning his gap year in Israel.

His parents presented him with the option to use some of his college savings to fund the trip, which cost about $16,000 to $17,000. Because the cost was close to a year’s worth of tuition at the pricey out-of-state school, his parents told him they could only help him finance his gap year if he decided to stay in state.

Ask for Free Money: Grants, Scholarships, Trusts, and Charities

Find an organization, trust, or charity that’s aligned with the focus of your trip and ask if they have any grants or scholarships that you can apply for and that would be applicable toward your gap year.

Local associations, businesses, schools, and charities such as the Rotary Club or Lions Clubs International award grants, or scholarships may even be able to sponsor students who meet certain criteria and goals.

When Katzman decided he wanted to spend 9 months in Israel with Habonim Dror’s Workshop, a gap-year program run through his childhood camp, Habonim Dror Camp Moshava, the first thing he did was look for scholarships and grants to help him cover the $16,000 the trip would cost.

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“I talked to my synagogue,” said Katzman. “I knew that if I connected with the synagogue they [would support me].” In the end, they gave him about $3,000.

Katzman then asked other organizations including one called Masa, an Israeli organization that advocates interning and volunteering in Israel, adding another $1,000 to his fundraising goal. Next, he went to the Jewish Community Center of Greater Washington.

After he got some funding through community organizations, Katzman turned to his family and friends to help out.

“I talked to all of my family. Instead of a Hanukkah or birthday present, I asked them to give me money for the trip,” said Katzman.

The rest of the funds came from his own savings from working as a lifeguard and camp counselor while in high school.

Get Creative

Katzman and the group he went to Israel with saved money by pooling their resources.

“We were living a socialist lifestyle with a group of 23. We had a shared bank account that we all put money into. Some of us put $2,000 and some put just what they could,” said Katzman.

The shared account allowed them to prioritize the group’s experience as opposed to the individual and kept them out of “a situation where someone felt excluded because they couldn’t afford it,” said Katzman.

Two of the members in Katzman’s group were co-treasurers of the shared account and managed the group’s budget. If some or all of the group’s members went out to eat or someone in the group needed to replace a pair of shoes, the money to pay for it came from the shared account. At the end of the trip, they had a little left over to donate back to the camp.

Stubbs, who already has his room and board covered with the hostel, also plays the trumpet. He plans to finance some of his living expenses while in Malaysia this fall and New Orleans in the spring with money earned from street performing or “busking.”

Some Final Advice: You have to want it.

“Sometimes coming up with the money for something like this can be really discouraging because it’s really expensive,” said Katzman.

But setting aside time for a gap year was well worth the added cost and effort. After he graduated from college, Katzman decided to move to Haifa, Israel, full-time, where he is working part-time to lead this year’s Habonim Dror gappers and taking Hebrew classes.

“I grew more in one year than I think the average college student would have grown,” he added. “It affected what I did in college, it affected my choices during college and afterward [when I decided to] live here.”

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Does a College Student Need an Estate Plan?

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When parents drop their children off at college they often celebrate the start of a new chapter in their lives and breathe a sigh of relief because, after helping guide their child through high school, paying their tuition, and outfitting their dorm room or apartment, they figure that they have done all that they can do.

But maybe not. You see, if your child is 18 or older, he or she is now an adult in the eyes of the law. (In most states, children become legal adults at age 18). This means that you no longer have the same rights in regard to your child as you did when he or she was a legal minor. For example, you no longer have a right to basic information about his or her health and medical needs, and you’re now excluded from making important medical decisions on your child’s behalf should he or she get injured or become ill while at college. No matter how immature or uniformed your child may be, your adult child is entitled to make those decisions, not you.

In addition, once your child becomes a legal adult, you cannot have access to his or her personal bank account unless you are a co-signer on the account. And perhaps even more importantly, if your child has obtained his or her own credit card, you can’t monitor how much your child is charging or what he or she is using the card for.

The good news is that there are steps your child can take that will allow you to stay involved in his or her medical and financial life once away at college. For example, your child can prepare the following simple medical-related estate planning documents.

1. Medical Power of Attorney & Living Will

Your child can appoint you as his or her health care decision maker by filling out a document called a Medical Power of Attorney. That way, should your child become debilitated due to an accident or illness and can’t make his or her own health care decisions, you can make them.

When your child prepares a Living Will, he or she spells out the terms under which he or she would want life-support measures stopped should he or she be near death with no hope of recovery. Knowing your child’s wishes is likely to make it a little easier for you to cope with a parent’s worst nightmare.

If your child is attending college out-of-state, these documents should be drawn up by an attorney in the state where the college is located. Also, many states combine a Medical Power of Attorney and a Living Will into a single document called an “Advanced Health Care Directive.”

Note: It’s essential that every adult have a Medical Power of Attorney and a Living Will or an Advanced Care Directive. If you don’t, meet with an estate planning attorney for assistance drawing them up. (Full Disclosure: I am one.) 

2. HIPAA Release

HIPAA is the acronym for the federal Health Insurance Portability and Accountability Act. This law helps maintain the privacy of an individual’s medical information and so it is virtually impossible for you to obtain any information about your college student’s medical diagnosis or prognosis unless your name is on his or her HIPAA Release form. Your child may want to add your spouse or partner to the form, too. You can obtain a HIPPA release form for your child to complete from his or her doctor or from your estate planning attorney.

3. Durable Power of Attorney

If you want to remain involved in your child’s financial life once he or she leaves for college, ask your child to prepare a Durable Power of Attorney and to designate you (and/or your spouse or partner) as his or her current financial agent. As your child’s agent you may be able to write checks on his or her account should the need arise or if he or she becomes incapacitated. It will also be easier for you monitor your child’s credit card and debit card purchases. However, you will need your child’s log-in information to do this, but since the money to pay your child’s expenses while he or she is in college is probably coming from you, your child may feel that it’s wise to cooperate and share this information with you.

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College Students Are Actually Pretty Good With Credit Cards

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When people think of credit cards and college students, they don’t often conjure up an image of a responsible young adult, either because of stereotypes they’ve been exposed to or their own negative experiences. In reality, college students generally do a decent job managing their credit cards — at least, that’s what one survey suggests.

Most college students (72%) pay off their credit card balances each month, according to a survey by credit bureau Equifax. Of course, not that many students actually have their own credit cards. A recent survey by lendedu.com found that fewer than 40% of current graduate and undergraduate students actually have a credit card in their name. The survey occurred in June and included responses from more than 600 American college students ages 18 to 24, and, of that sample, 42% said they have at least one credit card. The margin of error for the entire sample is plus or minus 4 percentage points.

Only 10% of respondents with credit cards said they carry a balance (the remaining 18% said their parents pay off their balances each month). Even though paying your balance in full doesn’t directly affect your credit score, it’s a smart practice: Paying your statement balance means you’re not incurring interest charges on your purchases (three cheers for saving money), and it can help you keep your credit utilization rate low. (Your credit utilization rate is how much of your credit limit(s) you use, and it’s the second-most influential aspect of your credit scores. You can see how your credit card use affects your credit by getting two free credit scores, updated monthly, on Credit.com.)

Building Good Habits 

It’s a good thing that the majority of students in this survey are staying on top of their credit card debt, given that the majority of college students graduate with student loan debt, and paying off student loans is enough of a burden without also having to worry about getting out of credit card debt.

Regardless of how old you are, paying down credit card debt can be really challenging, because credit card interest rates tend to be much higher than rates on other kinds of debt, and it’s really easy to put off tackling credit card debt by just making minimum payments. Falling into credit card debt isn’t the end of the world, but to dig yourself out, you’ll need a plan. You can use this free credit card debt payoff calculator to help yourself set a goal for getting out of debt (and potentially helping your credit score along the way).

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25% of College Students Spend Most of Their Money on Alcohol & Drugs, Survey Says

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A quarter of U.S. college students who responded to a recent LendEDU survey say their biggest monthly expense is alcohol and/or drugs.

“Quite surprising, but not that crazy,” Nate Matherson, CEO of LendEDU, said in an email. “This was perhaps the most fun response.”

LendEDU, an Iowa-based student loan and refinancing marketplace, surveyed 455 undergraduate and graduate students at three East Coast schools in early 2016. Not only did the survey find that these college kids are using their money for fun, it turns out many haven’t been taught about finances and may face a real wake-up call after graduation.

“College students are leaving campus with an average of $35,000 in student loan debt, yet the majority of students are lacking basic financial skills,” Matherson said. “How can we expect student loan borrowers to repay/escape student debt without personal finance knowledge?”

About half of respondents said they learned at least a little bit about finances in high school, while only 34% said they had taken a college course on personal finance. It appeared that parents were the biggest influence on financial knowledge, with 46% saying their parents taught them about managing money in some way and 24% saying they learned from their parents’ example.

Good Credit Pairs With Good Drinks

The LendEDU team reports that 58% of students surveyed were not actively working to build good credit. However, out of those who had a credit card, only 8% said they had been late on a credit card payment, so they may have good habits that are helping their credit without knowing. (Using a credit card can be a great way for young people to start building credit, and you can check out the best student credit cards here.)

You certainly learn a lot in college, and that includes budgeting, whether it’s for recreation or for financing your education. Developing good spending and saving habits now can help you one day when you are faced with repaying student loans or paying down a mortgage. These good habits can also benefit you in other ways, like building a good credit score. You can keep an eye on your credit by viewing your free credit report summary, updated each month, on Credit.com.

More on Student Loans:

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Top 5 Checking Accounts for College Graduates

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When you open your first bank account as a kid, you’re not thinking about fees. You’re just excited to swap your piggy bank for a debit card. That first bank account may even stick with you up until college. That doesn’t mean it’s the account you should keep for the long haul.

Some checking accounts give you a break on fees while you’re a student, but after you get a diploma or turn a certain age these bank accounts get expensive. For example, Bank of America waives the $12 monthly fee on its checking account for students under 23 years old. After graduation, that’s an extra $12 per month you’ll want to keep your hands on.

If you have a checking account that will phase you out of a discount, it’s time to shop around for accounts with the lowest possible fees. Here are six checking account alternatives college graduates should consider:

1.Charles Schwab Online Checking

No Monthly Fee, ATM Fee Reimbursement Worldwide

charles-schwabCharles Schwab has no fees or account minimums. This account comes with free checks and bill pay. You can connect your Charles Schwab online checking account to Apply Pay for purchases if you have an iPhone 6 or iPhone 6 Plus. Deposits can be handled remotely through Schwab check deposit.

Where this checking account stands out from other accounts below is it has an unlimited fee rebate for cash withdrawals at ATMs worldwide. Charles Schwab will reimburse you every time you use an ATM that charges a fee. This makes it ideal for those planning to travel frequently.

Apply Now

 

2. Ally Bank Interest Checking

No Monthly Fee, ATM Fee Reimbursement Up to $10 Per Month

allyAlly Bank offers an online checking account without monthly maintenance fees. There’s also no minimum balance required. You’ll get charged certain fees in unique situations. For instance, an overdraft will cost you $25. To avoid an overdraft, you can set up free automatic transfers from another account. This means free overdraft protection, which isn’t the case at many banks that will charge you $10 to move your money from savings to checking.

If you’re used to walking into a bank to manage your money, you won’t get the same experience with this online account or any of the other online checking accounts on this list. But, managing your money is still easy. Ally Bank allows you to deposit money remotely using Ally eCheck. You can also transfer money between Ally bank accounts or sign up for direct deposit to put money into your account.

For withdrawals, you can use Allpoint ATMs in the U.S. for free. If you use an ATM that’s not Allpoint, Ally Bank will reimburse you ATM fees up to $10 per billing cycle.

Apply Now

 

3. Bank of Internet USA Essential Checking

No Monthly Fee, Unlimited ATM Fee Reimbursement in the U.S.

bank-of-internet-usaThe Essential Checking account offered by Bank of Internet USA has no monthly fees as well. There are no fees for overdraft or insufficient funds. If you try to make purchases without enough funds in your account, your card will simply be declined.

Withdrawing money from this checking account is convenient and cheap. You can use any ATM in the U.S. and Bank of Internet USA will reimburse the ATM fees. No need to hunt for a specific ATM to get free cash.

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4. BankMobile Totally Free Checking

No Monthly Fee, ATM Fee Reimbursement With Conditions

bankmobile picBankMobile has a checking account with no fees or a minimum balance requirement. When it says no fees, it seriously means no fees. You can use the BankMobile app to deposit checks via remote deposit and you can set up direct deposit. For withdrawals, BankMobile has a map where you can locate STAR surcharge free ATMs.

If you have at least $500 deposited into your account each statement period, you can join the BankMobile VIP program. With VIP membership, every ATM in the U.S. becomes free.

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5. Capital One 360 Checking

No Monthly Fee, ability to deposit cash, Doesn’t reimburse ATM fees

capital-one-360The 360 Checking account from Capital One has no fees. There’s no minimum balance required either. You have two options for overdraft protection. Connect your checking account to a savings account and have funds transferred automatically when your cash runs low. Or you can apply for an overdraft line of credit. Of course, with a line of credit interest will apply to your balance.

Deposits can be easily made through the mobile app, direct deposit or by sending a check. You get access to free cash withdrawals from 38,000 Allpoint ATMs and Capital One ATMs. If you use an ATM out of the network you may get charged by the bank you withdraw money from and these charges are not reimbursed.

A unique feature of the Capital One 360 Checking account is the ability to deposit cash at many ATMs. Not many Internet-only banks offer the ability to deposit cash. Before signing up for this account purely for this reason, you should guarantee an ATM near you allows you to deposit cash.

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Which is the right checking account for you?

All of these accounts are insured by the FDIC up to $250,000. But, if banking online only still makes you a little nervous, the 360 Checking account is a good pick. With this account you can visit a Capital One branch for some account services like disputing transactions and changing your account information. Otherwise, Charles Schwab and Bank of Internet USA have the potential to save you the most money if you routinely frequent ATMs.

The post Top 5 Checking Accounts for College Graduates appeared first on MagnifyMoney.

Student Loan Borrowers Are Getting the Best Deal in 10 Years

CollegeStudent

Here’s something you don’t hear every day: It’s a good time to be taking out student loans.

That’s because the interest rate on the most common student loans — undergraduate Federal Direct Loans — just dropped to 3.76% for loans disbursed between July 1 and June 30 of next year. Last year, the interest rate was 4.29%, and before that, it was 4.66%. Interest rates on federal student loans taken out by parents and graduate students also dropped, to 6.31% from 6.84%.

In 2013, a new student loan law tied federal student loan interest rates to the 10-year treasury note. President Barack Obama signed the law right before interest rates were set to jump to 6.8%, and now, every year, new student loan rates are set by the last 10-year treasury note auction before June 1. The rate is calculated by adding 2.05 percentage points to the high yield of the 10-year note at the time of the auction — 1.71% on May 11. (In writing the 2013 law, Congress added the 2.05 percentage points to cover the administrative costs of issuing these government-backed loans.)

Back in 2013, when this law was new, some student loan experts saw the move to a 10-year-note benchmark as a band-aid — that an improving economy would eventually drive up student loan interest rates to the high levels this method initially avoided.

“This interest rate can go pretty high,” Mitchell D. Weiss, a professor of finance at the University of Hartford, and a Credit.com contributor, said in a 2013 interview after Obama signed the law. Congress set a cap of 8.25% on undergraduate Direct loans and a 9.5% cap on graduate and parent PLUS loans.

That’s still the case but, for now, students taking out federal student loans in the coming academic year can enjoy their historically low interest rates. Between July 1, 2006 and June 30, 2010, Direct unsubsidized loans carried a 6.8% interest rate for undergraduate and graduate students. In the last decade, only borrowers who had Direct subsidized loans disbursed between July 1, 2011 and June 30, 2013 enjoyed an interest rate (3.4%) lower than the new 3.76%. (Subsidized loans, on which the government pays interest while the borrower is in school, are less common than unsubsidized loans.)

Of course, these lowest-in-a-decade interest rates may not be much consolation when considering that tuition increases have consistently outpaced inflation in the same time period. This interest-rate drop may not be as much of a good deal as it is a lucky break for students who will likely have record amounts of student loan debt. To see how your student loans affect your credit (they do, quite a bit), you can review your free credit report summary, updated monthly, on Credit.com.

More on Student Loans:

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The post Student Loan Borrowers Are Getting the Best Deal in 10 Years appeared first on Credit.com.