America is no longer a cash society. It is simply not safe to carry
large amounts of money in your purse or wallet. Most purchases are
now made using credit cards or bank issued checks.
Upon arriving in the United States, setting up a convenient way to
make payments and purchases should be at the top of your list of
things to do.
Tipping is commonplace throughout the United States with amounts
varying depending on the situation.
The basic unit of exchange in the United States is the dollar ($),
which is divided into 100 cents (¢). One dollar is commonly written
as $1 or $1.00. There are four denominations of commonly used coins:
1 cent, 5 cents, 10 cents, and 25 cents. Americans usually refer to
coins, not by their value in cents, but by their names. A one-cent
coin is a penny, a five-cent coin is a nickel, a ten-cent coin is a
dime, and a 25-cent coin is a quarter. There are also one-dollar
coins and half-dollar (50-cent) coins but they are seldom found in
U.S. paper money (often called bills: for example, a "one-dollar
bill") comes in single-bill denominations of one dollar ($1.00), two
dollars ($2.00, but these are rare), five dollars ($5.00), ten
dollars ($10.00), twenty dollars ($20.00), fifty dollars ($50.00),
and one hundred dollars ($100.00). You will immediately notice that,
unlike in most other countries, U.S. bills are all the same size and
all the same color. They are differentiated from each other by the
number value and with the portrait of a different U.S. historical
figure on each denomination. At first, you may find this confusing
and you will need to watch which bills you use carefully. However,
you will become accustomed to the currency and will soon be able to
differentiate easily between the denominations. U.S. coins also are
marked with the coin's value and each denomination is a different
One of the first things you should do after you arrive in the United
States is establish a bank account. It is not a good idea to carry
large sums of cash or to keep it in your room. Most banks have main
offices in the center of a city or town. Smaller offices, called
"branches," are usually found in other parts of a city or town and
in the suburbs. Even if your bank does not have a branch nearby, you
often can find automated bank machines to serve your needs. Banks
generally are open Monday through Friday from 9:00 a.m. until 3:00
p.m. On Fridays, many banks stay open a few hours later. Many banks,
but not all, are also open on Saturdays, often from 9:00 a.m. to
12:00 noon. Your international student adviser can suggest which
banks are convenient to campus.
Remember that banks are private businesses. They are all different
and each one wants to get your business. You should check with
several banks to determine which bank offers the best services for
your needs. When you are ready to open a bank account, go to the
"New Accounts" department at the bank you have chosen. A bank
officer will help you to open an account by explaining the different
kinds of accounts available and the costs and services of each one.
You should plan to open both a savings account and a checking
(current) account at the same bank, simply because it will be more
convenient for you. For example, if you have a savings account and a
checking account in the same bank, you can easily transfer funds
from one to the other. Interest rates on savings and checking
accounts vary from bank to bank. Investigate and compare various
banks and their rates of interests on checking and savings accounts
before you decide where to open an account. Internet banks are an
alternative option to traditional banks and are another possibility
to explore. The best source of information for these will be on the
Checking accounts (called current accounts in many countries) are a
way to keep your money safe and still allow easy access to it.
Checks are an easy way to pay bills, especially by mail. Never send
cash through the mail.
Almost all American banks now offer banking privileges 24 hours a
day through "automatic teller machines" or ATMs. When you open an
account at a bank, you will be issued a bankcard and a personal
identification number (PIN). You will be able to use this card in
your bank's ATM to access your account and make transactions. This
will enable you to do such things as withdraw and deposit money,
transfer funds, and obtain your balance 24 hours a day. Generally,
you can also use your bankcard in other banks' ATMs for a small
service fee charged against your account, but only for cash
withdrawals. Banks often impose limits on amounts that can be
withdrawn from the ATM in one day, usually between $200 and $400.
It is now possible in the United States to conduct most of your
monetary transactions using only your bankcard. Many stores have
systems that permit you to use your bankcard instead of cash to pay
for merchandise. In this way, the money is deducted directly from
your bank account. Since you are not using cash when paying with
your bankcard, however, you should keep track of your account to
make sure you are not overspending. It is a good idea to carry a
small amount of cash with you at all times anyway, since the
automated banking system can break down.
Having a bankcard is very convenient, since it can be used all over
the United States and even in other countries connected to the same
banking system. Bankcards from other countries can also be used in
the United States as long as they function on one of the banking
networks used in the United States. Before leaving home, ask your
bank if you can use your home country's bankcard in the United
States. This is especially useful if, in case of emergency, you need
to rapidly get money from home.
Most ATMs also accept credit cards. If you have a credit card but do
not use it in ATMs yet, ask the bank that has issued your credit
card to allocate a PIN to it. Then you will be able to use your
credit card in ATMs. Note, however, that this transaction may be
considered a "cash advance" and therefore your credit card company
may immediately begin to charge you interest. In some cases, the
interest rates for a cash advance may be higher than for credit card
Checks that you write are called "personal" checks. You can use
checks instead of money in most stores or businesses in the United
States. Usually, you will be asked to present two pieces of
identification, including at least one with a photo, before you can
use a personal check to make purchases or to obtain cash.
Checks written by someone else in payment to you are called
"two-party" checks. To cash or deposit such a check, you must first
endorse (sign) it. Only endorse the check when you are ready to use
it since it becomes negotiable — that is, it can be redeemed for
cash — as soon as it is signed. To endorse a check, turn it over
and, on the back across the narrow width, write your name exactly as
it is written on the check. This is the bank's or merchant's way of
making sure that you really are the person to whom the check was
written and the person who should receive the money, either in cash
or deposited to your bank account.
A cashier's check is a check written for you by your bank. You give
the bank the money (or it is taken from your account), and the clerk
prepares a cashier's check. Your bank will probably charge a small
fee for this service. Usually, cashier's checks are written for
large amounts to transfer money from one place to another. A
cashier's check is easier to cash than a personal check, and it is
safer than carrying a large amount of cash. You do not have to cash
a cashier's check at a branch of your bank; it can be cashed at any
bank or business that will accept it.
When you write a check for more money than you have in the bank, you
create an "overdraft." For each overdrawn check, the bank will
charge you a fine of $10 to $25 or more. The bank will also return
your check, unpaid, to the person or business to which you wrote the
check. If the payee is a store or business, that payee may also
charge you $5 to $20 for the trouble the bad check has caused — and
they may not accept your checks again. It can be very expensive if
you fail to keep an accurate, check-by-check record of your account.
It is also illegal to issue a "bad" check (a check for which there
is not sufficient money in the checking account) on purpose.
If you plan on bringing enough money with you for the entire school
year, or even most of the money you will need, you should consider
opening a savings account. A savings account usually offers a higher
rate of interest than an interest-bearing checking account and
allows you to make withdrawals to cover your living expenses. You
can withdraw the money in cash or, especially for large amounts, in
the form of a "certified" (bank) check. Compare rates offered by
several banks to find the best terms and benefits for the type of
account you will hold.
Most banks maintain small locked boxes that may be rented by the
month or by the year. The contents of the box are known only to the
person who holds the key; the bank does not have access, except in
case of death. A safety deposit box is a good place to keep
valuables such as passports, jewelry, foreign currency you do not
want to exchange, and legal papers.
The use of credit cards is widespread in the United States. Banks,
credit card companies, gas companies, department stores, and other
organizations issue credit cards, which can be used to make
purchases. Statements are mailed to credit card holders once a
month. If the amount due is not paid within a specified number of
days, a "finance charge" is added to the bill. Applications for
credit cards are available in many banks and stores. Information
requested includes the applicant's source and amount of income,
length of residence at the present address, and bank information.
Many companies that issue credit cards require applicants to have a
specific minimum income.
As a student, you may find it difficult at first to obtain a credit
card. However, many credit card companies also offer special student
credit cards, subject to certain conditions. Not having a credit
card can make daily life somewhat more difficult. For example, if
you are on a trip and need cash, you can obtain a cash advance from
any bank that honors the specific type of credit card you hold.
Finance charges, however, often begin from the day you receive the
Whether you use a credit card or sign a contract to purchase
something on credit, be careful not to build up too much debt.
Credit buying is often necessary — for example, for the purchase of
a car — but be sure you understand the terms of the loan agreement.
You may have to pay high interest rates, sometimes as much as 21
One way to avoid building up too much debt is to delay obtaining a
credit card or making large purchases involving long-term debt for
the first few months you are in the United States. Instead, make
your initial purchases by cash or by check. At the same time, keep
careful records of your expenditures. Do this the first two or three
months you are in the United States. By doing so, you will know
exactly how much it costs to live and study in your city. You will
then be in a good position to know when to use or not to use a
credit card and how much debt you can actually support. Every four
or five months thereafter, you should monitor your expenditures
again to make sure that you are not spending too much or building up
too much debt.
In the United States, tips (gratuities) are not automatically added
to bills, as is customary in some other countries. Even if tipping
remains a personal choice, it is usually expected when certain
services are provided. You should be aware that the people who
commonly receive tips are paid a wage that is lower than those who
do not receive tips. They depend upon tips for a significant part,
sometimes the majority, of their income. The average tip is usually
15 percent, but it can vary depending on the extent and the quality
of the service provided.
The expected tip in a restaurant is 15
or 20 percent in a good restaurant with excellent service. You
should leave your tip on the table for the waiter or waitress as you
leave. If you pay with a credit card, you can add the tip to the
credit card charges before you total the bill. The restaurant then
gives that amount in cash to your server. If you sit at a counter in
a restaurant, the tip is usually smaller; 10 to 15 percent is
sufficient. In a fast-food restaurant, the bill is paid when the
food is ordered and no tip is expected. In a cafeteria or a
self-service restaurant, you pay the cashier after having chosen
your meal and, again, no tip is expected.
It is customary to give 10 to 15
percent of the total fare.
It is customary to give
$1.00 for each bag.
usually are tipped 10 to 15 percent of the bill.
The attendant should usually receive
$1.00 to $2.00.
NEVER OFFER A TIP to public officials, police officers, or
government employees. This is against the law in the United States.
There is no need to tip hotel desk clerks, bus drivers, theater
ushers, salespeople, flight attendants, or gas station attendants.