If you are not an American citizen, if you just arrived from another Country, you really want to know how the american bank system works.
Different Countries have different systems, and in the US the you manage your bank account is very important.
First of all you want to open a bank account, the one they call “check account“. The check account is your main bank account, the one where your employer makes you salary deposit, where you deposit your checks and your money in general. Usually the banks allow you to open a “saving account” too. The saving account is the one where you save money. You can deposit money from the check to the saving account, and, once the money are in the saving account, there are restrictions about money withdrawal, in order to allow you to save.
When you open a check account, they will give you a card, called DEBIT card, that you can use to pay and to withdraw money at the ATM. No cards are to be expected when you open a saving account, because you are going to manage your saving account by mobile Apps or by online banking.
If you want to know how the american bank system works, you need to know that the most important thing to have in the us is the CREDIT card. At the beginning it’s difficult for non-us citizen, since Banks use to check for your credit history before accepting od denying your credit card application. As you just arrived, of course you have no history for the american system, so you will need to build one. The way you do that is by applying for a secure credit card. This card is released by Bank of America only and is a special card with usually a 300-500$ credit limit. That means that you can spend as much as your limit and then you need to refill the card.
Paying with the credit card instead of the debit card has many advantages:
1) by paying with the credit card you are building your credit history, to get ready for the next step, obtaining a regular credit card
2) you can earn money thanks to the cashback system, which allows you to get the 1-5% back when you buy fuel or when you do shopping
3) you can delay your regular payment, by spending money from the Bank and then giving their money back when you get payed (before the due date!)
It’s very important to pay your credit to the Bank before the due date. Since that is a refillable card, the best thing to do would be to pay always with the credit card and then refill it every week, so you build better credit and earn more cashback.
Having an account in the same Bank would be advantageous, so after a while (about 12 months) you can request a regular credit card and it will be easier for you to get it accepted.
Many bankers suggest to never spend all the credit you have, but to spend just something like 30% of it, and then to pay back and start over again.
Hope this post was helpful!
Nancy from OnesAbroad