It's that time of year when parents worry about their kids at college: what they'll eat, who they'll hang out with, whether they'll study and yes, how they'll manage their money.
True confession time: the ABC News Fixer's bank account once dipped to 14 cents in college.
That's not advisable. But there are some key things families can do to protect their students when it comes to banking.
First, choose the right bank account. Ideally, you'll get a checking account before school starts and will set up direct deposit with your school's financial aid office, so any funds you have coming will arrive quickly.
Carefully read the fine print associated with all banking offers. Many "free" or "easy" checking accounts do charge fees if your balance dips below a certain amount. Find out about fees for using out-of-network ATMs or debit cards, for online bill-paying and overdrafts. The U.S. Consumer Financial Protection Bureau says students who aren't careful can pay hundreds of dollars each year in unnecessary fees.
Remember, you don't have to use the bank that your school promotes or the one that has ATMs all over campus. Shop around – you may find a better deal.
Look at extra services such as remote check deposits, mobile apps and online bill-paying. These can be a great convenience for students, as long as they're free or low-cost, and as long as the student carefully protects his or her passwords.
A word about overdraft protection: Banks frequently push this as a way to make sure you never bounce a transaction. Overdraft fees can be pricey. The ABC News Fixer has met lots of folks who dipped into the red with a small purchase like a cup of coffee and wound up with a $35 overdraft fee. Worse, if your bank reorders your pending transactions, that coffee could cost you several overdraft fees.
By law, banks can't automatically enroll you in an overdraft program. You can decide to not opt in for this service.
If you're still worried about bouncing a debit card transaction, the CFPB suggests linking your account to a savings account. You'll probably have to pay to transfer money to your checking account, but it will most likely cost less than an overdraft fee.
Apply the same caution to your choice of credit card. Read that fine print and make sure a temptingly low interest rate isn't just an introductory rate that will go higher.
Try to pay your entire credit card balance off every month, and don't be late. The goal is to build a good credit history.
Ignore offers by retailers to save 5 or 10 percent for opening an account at the register. Having too many cards can make your credit score go down.
The FDIC suggests students sign up for text or email alerts from their credit card issuer – ask first if they're free – to stay on top of their credit limit, balance and payment due dates.
Here are a few more helpful resources for parents and students from ConsumerFinance.gov:
Student Banking 101
Student Banking: Managing Your College Money
Consumer Advisory: Accessing Your Scholarships and Student Loan Funds
- The ABC News Fixer
Got a consumer problem? The ABC News Fixer may be able to help. Click here to submit your problem online. Letters are edited for length and clarity.