I'm an incoming international student arriving in August. Should I open a checking account (and with which bank) or get a secured credit card (and which one)? Also, how should I allocate my money between savings and a secured credit card to build credit?
You should open a checking account first to manage your daily money, and then get a credit card to build your U.S. credit history. Because you do not have a Social Security number yet, you can use your passport and student documents to apply for both.
You do not have to wait for an SSN to get started. Many major banks and card issuers accept your international student documents so you can begin building your financial foundation the week you arrive.
Your credit score depends heavily on your {"term": "credit-utilization", "text": "credit utilization"}, which is how much of your available credit you use. Using a large percentage of your limit can negatively affect your score.
If you open a secured credit card, your deposit usually sets your credit limit. For example, if you deposit $300, your limit is $300. To keep your utilization under the recommended 30 percent, you should spend no more than $100 on that card each billing cycle.
You should size your deposit so that your normal monthly spending stays under that 30 percent mark. Leave the rest of your money in your checking account to cover your daily expenses and to pay off your credit card balance completely.
