Applying for Visa

CURRENCY

American currency is based on the decimal system with 100 cents to each dollar ($). Currency is issued in either coins or bills. Coins are copper and silver and come in six different sizes and values:

1 cent = (a penny); the only copper coin.
5 cents = (a nickel); larger than a penny.
10 cents = (a dime); the smallest coin.
25 cents = (a quarter); larger than a nickel.
50 cents = (a half-dollar); not commonly used.
100 cents = (silver dollar); rarely seen in circulation.

Paper bills are all the same size and color. They are issued in denominations of one (often called a buck), five, ten, twenty, fifty, one hundred, etc., dollars. Coins are used for many machines. They are used for such things as food and soda vending machines, photocopiers, telephones, parking meters, washing machines and dryers.

BANKING

One of the first things you should do when you arrive here is to deposit your money in a bank. It is not a good idea to carry large amounts of money with you or to keep it where you live. There are two types of accounts at banks: a checking account which most people use for regular bills and for most shopping needs, and a savings account which allows you to earn interest on money which you do not need to use immediately.

Checking Accounts

A "checking account" with a bank allows you to write drafts or "checks" against money you have on deposit in that account. Opening a checking account is very easy. You need to deposit money and fill out a signature card. You will be given temporary checks right away, but you should order personalized checks which usually have your name, address and home phone number or drivers license number printed on them. Most merchants prefer that this information be printed on your checks before they will accept them for a purchase. You will pay a fee for your checks, usually less than $15, for 200 checks. Always carry identification with you if you plan to write a check. Be sure to carefully record each check that you write in the register of your checkbook.

Each bank has different banking practices, and the types of checking accounts available vary from bank to bank. Some banks charge a monthly service fee or charge 5-15 cents for each check that you write. Others do not charge a service fee, but require that you maintain a minimum balance in your account. Some banks, credit unions, and savings and loan institutions offer special checking accounts which permit you to earn interest on any money that remains in the account. The type of account you choose should be determined by the number of checks that you write each month and/or the amount of money which you are able to keep in your checking account. It is recommended that you compare different banks' services by talking with their customer service personnel.

Automatic Teller Machines (ATMs)

Most banks have a service whereby you can make deposits and withdrawals 24 hours a day by using a computerized device called an automated teller machine or ATM. You will be given a small plastic card, and a personal identification number (PIN) to use this service. Do not print this number on your card or carry it in your wallet near your card; if your wallet or purse is stolen or lost someone may be able to easily take money out of your account. It is best to memorize your PIN and destroy any written record of it. Ask your bank for information on ATM service. Keep in mind, however, that there is usually a fee for ATM service.

Savings Accounts

If you have money which you do not need to use for routine living expenses, a savings account is a safe way to invest it. Savings accounts are available at most commercial banks, credit unions, and savings & loan institutions, but the interest rates vary. There are several types of savings accounts. A regular passbook account allows you to withdraw money from it whenever you need it. If you have a checking account at the same bank you can usually telephone the bank and have them transfer money from your savings account to your checking account. Frequent withdrawals are usually discouraged, but the bank will pay you any interest that your money has earned up to the date you withdraw it. There are also several different time deposit accounts or savings certificates which pay higher interest rates, but you must keep your money in the account for a certain amount of time, up to 5 years. The bank will charge you a penalty on early withdrawals from these accounts.

Travelers Checks and Money Orders

Personal checks drawn on your bank account may not be honored outside of this area or state. Travelers checks provide a safe and convenient way to carry money when you travel. They can be purchased at any bank for a small charge (1%); some banks even provide them free to their depositors. Traveler's checks can be cashed at banks, hotels, restaurants, and most stores throughout the world. They can also be replaced if they are lost. It is important to keep a record of the check numbers separate from the checks in the event that your traveler's checks are lost or stolen. You will need to sign the checks when you get them at the bank and then endorse them again when you make a purchase. Do not send cash through the mail. If you need to pay bills by mail you can use your checking account or buy money orders at banks and some large stores. Money orders are safer than sending cash through the mail and provide you with a receipt. Should you need to buy an expensive item from an individual who does not want to accept a personal check for the purchase, your bank can issue you a cashiers check for the amount of the purchase. This guarantees the person getting the money that there are funds in your account.

Cash

If you pay for anything in cash, such as your rent or other large items, be sure to get a written receipt as proof that you have paid. When you need cash, you can go to your bank and write out a check payable to cash or payable to yourself and funds will be taken from your checking account. Some supermarkets allow you to write a check for an amount over the cost of your purchase so that you get the extra amount back in cash. Check cashing services are also available at some supermarkets, but you must fill out an application before receiving this privilege.

Receiving Money from Another Country

It may be possible to arrange for a bank in your home country to cable funds directly to your bank here. You must provide the following information to the home country bank:

the name and address of your bank in USA
your name and bank account number here
your address and telephone number in USA
exactly how you want to receive your money, such as deposited in your account, in the form of a cashiers check, etc.

It is a good idea to request money transfers well before the time you will need the money. In case there is an unaccountable delay, it may be wise to have a small savings account here for living expenses. Some foreign governments or state banks require proof of a students good academic standing before releasing funds.

Sending Money to Another Country

There are two ways to send money abroad:

send an International Money Order or Foreign Draft directly to the individual or institution
have your local bank send the funds to an individuals bank by air mail or cable.

Provide the individuals name, account number, and address so that person will be notified when the funds arrive. It is best to send items by registered or certified mail as an extra precaution. You may also purchase a return receipt with registered or certified mail. The return receipt is signed by the individual who is to receive the item and then sent back to you. If money is lost through mail or cable systems, there may be a long delay--up to six months -- before the bank sending the money can locate it and issue a refund. In most cases, these systems provide adequate security. It is not wise to send a Cashiers Check or personal check outside of the U.S. If a Cashiers Check is lost or stolen, the bank issuing the money may not be required to refund it. Many foreign banks do not want to cash these checks. If the checks are returned to the U.S., it may be two months or more before the individual to be paid is able to collect the money.

Money Management Hints

(from Handbook for Foreign Students and Scholars, University of Iowa, 1978).

Most students live on limited budgets. It is important to manage your money carefully to make sure that it lasts as long as possible. Until you have become accustomed to the value of the dollar and get a good idea of your daily living expenses, it is wise to be cautious. The following are hints from other international students on managing your money:

Budget carefully. You know how much your income and basic expenditures are, so pay all bills immediately at the start of each month and you will know exactly how much remains.

Keep accounts. Keeping track of expenditures in various categories - food, books, supplies - can pinpoint areas of heavy spending which might surprise you. Done on a monthly basis, this can give you quite an incentive to economize in certain areas.

File tax returns. Examine all options for exemptions or rebates, and do not hesitate to seek advice from the Internal Revenue Service. Keep records of expenditures throughout the year so that filling out returns will be easier.

Use inexpensive transportation. Recognize that a few extra dollars for an apartment near campus can save hundreds of dollars each year on a car. The car is part of the American Dream, and it takes some courage to realize that it is expensive to buy, to run and in many cases is unnecessary. Many young Americans are turning to bicycles and buses as a primary means of transportation. You can always rent a car for a long trip if you need to. It is much less expensive in the long run.

Be careful with credit. For many of you this is the first exposure to credit on any scale. For those of you who arrive in the United States with few household possessions, credit cards may seem like an easy answer, but beware of overextending yourself. Remember that you may be paying up to 22% per year in interest on some accounts.

Buy used or second hand! Garage and yard sales advertised in newspapers are frequent in the spring and summer, and you can buy used appliances and household goods at very reasonable prices. Sell your items the same way when you leave.

Type your own papers. Many of you did not learn to type in your home countries and find you have to pay high prices for typing services. It is worth investing in a few non-credit hours of typing lessons because savings will be considerable in the long run. There are word processors available throughout campus if you do not own a computer or typewriter.

Eat at home. If you do not live in a residence hall where meals are provided, it is very tempting to eat out regularly rather than prepare your own food. This expenditure can double your food bill.

Save at your credit union. If you are employed by the University and think you might be able to save some money, have a deduction made from your paycheck for deposit in the University Credit Union. What you dont see you wont miss, and it mounts up quickly in your savings account.

Take advantage of "Sales." Newspaper advertisements will tell you when a store is having a sale on something, i.e. selling it at a lower price than usual. If you can afford to do so, stock up on items that you use regularly when they are on sale.