You’ve thought about money FOR college. Now think about money AT college.

By Cynthia Kolko and Dawn Kellogg

College costs money. But while you’re calculating the expense of tuition, room and board, you can sometimes overlook the fact that you’ll usually need additional funds for things like supplies, transportation, and personal items (and maybe pizza).

A big question for incoming first-year students especially is: “How much spending money do I need these days?” Answers to that will differ of course: what do you define as “extras,” where is the campus located (almost everything costs more in cities), are you going home on weekends, will you have a car on campus, what is the social life like on campus, etc.

In addition to textbooks, school supplies, and clothes, other costs to be considered are phone bills, dorm furnishings, laundry money, food and drink outside of the meal plan, entertainment, local travel, recreational travel, campus parking permit, gas, and more. The first step is to talk about who is going to be responsible for these expenses: you, or your parent or guardian.

The next step is for you and your guardian to ask each other the following questions: Will I be in charge of my own savings? Will my guardian be able to see my account activity? Will my guardian want to control the amount of available money at least for the first semester or two?  

To give you a way to make purchases, guardians or trusted adults typically choose either a debit card or credit card for you. Here’s a list of the advantages of each type of card to help you decide which will work best for you, or if getting both is the way to go.

Debit Card Advantages

Convenience – Easier to tote around than a wad of cash or a checkbook, a debit card takes money directly from a checking account when used.

Versatility – Most debit cards can be used to make purchases online or right at the store, or as an ATM card for withdrawing cash.

Maintain spending limits – Some people recommend a checking account linked to a guardian’s account. That way, you can use your ATM as needed, and your guardian can monitor your spending behavior injecting extra cash when needed. When the checking account is empty, unless you’ve set up overdraft protection, you can’t spend any more.

Tip: Overdraft protection is when the credit union or bank uses money from another of your accounts to pay for any debit card charges that the checking account can’t cover. Usually, there’s a fee for each of these transactions, so be sure to pick the overdraft protection option that’s right for you.

Credit Card Advantages

Convenience – A credit card gives you the ability to make purchases up to the credit limit you specify. Guardians sometimes choose a credit card so that you can have access to money in case of an emergency.

Perks and points – Many credit cards offer choices like low rates or points, as well as perks such as extended warranties on purchases and protection when a store won’t accept a return.

Build credit – Even when the card is co-signed, paying the credit card bill in full and on time every month (and the same for any loan payments) reflects favorably on both your guardian’s credit score and yours. This can mean better rates in the future on mortgages, car loans and more.

Tip: With credit cards, it can be easy for you to charge more than you should. Carrying a balance on the card will most likely incur interest charges and could negatively affect both party’s credit score. Make sure you only charge what you can afford to pay off each month, and consider setting a low credit limit on the card for yourself.

Additional tips

• Find opportunities to have FREE fun on campus and around the community. So many local attractions, stores, and other outlets have discounted or free stuff for students.
• Have and follow a budget.
• Revisit spending habits and needs each year.
• Be aware of “Card Cracking” and other scams. It’s important to be aware of fraudulent account activity and potential scams and know how to safeguard yourself against them. Know the difference between scams and fraud. Fraud is account activity made without the participation of account holders, such as account charges that the account holder didn’t make. (At The Summit, we regularly monitor members’ accounts, and we have several safety features to alert members of account activity.) In a scam, account holders are fooled into doing something. Perhaps they’ve made a purchase from a phony online business that they think is a real one, or they’ve purchased gift cards for a scammer as “payment” for a bill, or they willingly give account access to someone who then withdraws money.

Find out about The Summit Federal Credit Union’s debit and credit card options by calling Member Services at (585) 453-7000 or (800) 836-7328 or visit summitfcu.org .

Updated on July 29th, 2024 from a previously published article.