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Bank And Credit Card Fees Cost College Students Millions

Us bank credit card student

College is not only supposed to give you the skills you need in a particular field of study, but also the general life skills that you need to survive and thrive. Without good habits, your collegiate financial education can come via the school of hard knocks – through incurring fees and interest charges.

According to a new NerdWallet study, America's college students spend almost $800 million per year on bank and credit card fees through college-sponsored accounts with partnering financial institutions. These fees are generally avoidable through responsible handling of finances.

Students incur typical overdraft fees and late payment fees of around $35 per incident on average. Given that the average college student overdraws a bank account 2.2 times annually, undergraduate students in America rack up over $722 million in overdraft fees alone. That’s nearly three-quarters of a billion dollars!

The study also found that one-third of soon-to-be-graduating students with credit cards have missed a payment date and incurred a late payment fee, adding up to approximately $73 million annually. Combined overdraft and late fees were near $800 million in the past year and are likely to continue on past the $800 million mark before the end of 2017. Throw in interest charges from carrying credit card balances, and the annual cost to students surely passes the $1 billion mark.

Through a 2015 set of guidelines aimed at colleges and universities, the Consumer Financial Protection Bureau (CFPB) has tried to act as an advocate for students. The guidelines were intended to assist schools in selecting partner banks that provide the best financial packages for their students. Progress is slow, as the CFPB's 2016 Student Banking Report found that "many general marketing agreements do not prohibit certain fees account providers may charge students." These fees could include overdrafts, maintenance, and ATM fees on out-of-network devices.

How can you avoid these charges? Overdraft charges can easily be avoided by selecting an account that doesn't charge them, whether or not that account is part of your college's network. Credit unions or online banks may offer you a better alternative.

You can generally set up your account to de-activate "overdraft protection," meaning that banks will reject transactions instead of allowing you to spend beyond your limit and incur a charge for the privilege. Make sure that your account doesn't charge an insufficient funds fee for rejecting the charge – and that you have a second means of paying for important charges.

As to late fees, the only way to avoid them is to make your payments on time. Even if you must carry a balance, you must pay on time to avoid the double penalty of late charges and a drop in your credit score. You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips. In addition to late fees, many cards for the collegiate market will activate a penalty APR that can approach 30% – imposing a heavy penalty on carrying a balance.

College students can use one advantage they have over older Americans – their love for technology and apps. Gerri Detweiler, Head of Marketing Education for Nav, explains, "You can set up alerts for your bills. use technology to stay on top of your bills, because one late payment can drop your credit score 50, 75, 100 points or more." That same philosophy will keep you from accumulating unnecessary late fees, not to mention interest charges from carrying the balance over to the next month.

The easiest way to avoid banking fees is simple yet difficult – don't spend more than you can afford to pay off at the end of each month, and make sure that all bills are paid on time. This requires budgeting skills. Track your expenses to get a feel for where your money really goes. Incorporate those expenses into a long-term budget, and stick to that budget. It's best to get used to budgeting prior to college before you are faced with college's unique combination of expanded freedom and temptations to blow cash.

College is expensive enough without throwing away money through unnecessary fees. Educate yourself on proper handling of personal finances, and put what you learn into practice. That way, you will have plenty of pizza and beer money when you need it, and your friends will be asking for your secret. Be sure to teach them fiscal responsibility as well – next time, they can buy.

If you are starting from scratch with no credit history, check out MoneyTips' list of credit cards for limited or no credit, which can help you to build a credit history.

Discover Student Card vs Wells Fargo College Credit Card vs U.S. Bank Student Card vs BankAmericard Cash Rewards for Students

2017 Comparison Review: Discover Student Credit Card vs Wells Fargo College Credit Card vs U.S. Bank College Visa Card vs BankAmericard Cash Rewards™ Credit Card for Students

Heading to college can be a scary time. You are leaving home, leaving your friends, and quite possibly leaving the financial security of your parents. Entering college, you are an adult, which means that you need to start making smart financial decisions.

One way to set yourself ahead of the many students heading to college when it comes to personal finance is by securing a credit card.

You might think that it is impossible to get a credit card since you have no credit history, but there is still hope!

Many credit card companies gamble on the fact that younger applicants might become lifelong customers, so they offer student credit cards like the Discover it® Student Card and BankAmericard Cash Rewards™ for Students.

Us bank credit card student

You may not think it is important to get a credit card, but having a card like the college credit card from Wells Fargo allows you to build up a credit history. This is important to do, as you will need strong credit for major life events down the road, like buying a house or purchasing a new vehicle.

A student credit card from Bank of America or a U.S. Bank college Visa card also allows you to build up strong credit habits. 53% of students know how important it is to have a good credit score, but they may not know where to start. If you start learning good habits at a young age, you can provide yourself with a strong financial foundation for the future.

Once you know that you want a student credit card, the issue becomes finding the right one for you. There are so many options, like the Discover card for students, Wells Fargo college card, U.S. Bank student credit card and BankAmericard Cash Rewards® for students.

AdvisoryHQ knows how puzzling it can be to narrow down to just one credit card from a list including the BankAmericard Cash Rewards™ Credit Card for Students and others. That is why we breakdown each of the features that you should concentrate on when selecting the perfect credit card for you.

By looking at how these four student credit cards stack up against each other when it comes to specific features, like fees and annual percentage rates, you will be able to determine what the best card is for you based on your individual preferences.

Take the time to consider each card to decide if the student credit card from Bank of America, Wells Fargo college card, U.S. Bank college Visa card, or the Discover credit card for students is the right fit for you.

Why Open a Student Credit Card?

Do you know why it is a good idea to open a student credit card? The reasons go far beyond simply starting to build up a strong credit history and borrowing habits. There are many additional benefits to opening a student credit card like the Discover card for students or BankAmericard Cash Rewards® for students.

A credit card like the Wells Fargo college card will allow you to partake in the world of e-commerce. This is growing every day, and we’re sure that you’ll appreciate the savings you might find when shopping for your textbooks online instead of the campus bookstore.

Another benefit of having a card like the college credit card from Wells Fargo or Discover it® student card is that they may allow you to use them internationally without paying foreign transaction fees or worrying about currency conversions. It’s never too early to start thinking about that Spring Break trip to Cancun, right?

Once you experience the cash back that comes with a card like the Discover credit card for students, you’ll wonder where a cash back credit card was your whole life. Credit cards like the BankAmericard Cash Rewards™ Credit Card for Students offer you cash back on purchases that you will find yourself making regardless.

If you can find a student credit card like the Discover it® student card, you will appreciate the cash back rewards.

While having a student credit card like the college credit card from Wells Fargo can have many benefits, you need to be sure to use your card responsibly. 34% of Americans find themselves in credit card debt, and you do not want to join that statistic.

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