Best banking advice for Med Students

[bhollowp]

yes, if you initiate a transfer from a boa account that does not go to another boa account, they will charge you per ach transfer. i don't know details if you initiate the transaction FROM your other account (ie an ING savings) TO a boa account, but i thought it was ridiculous b/c i also transfer funds to roomates for bills, my other checking account, etc etc.

I've never tried transferring money from BoA to somewhere else from the BoA webpage. But you can initiate a transfer of money from BoA to another bank (ING in my case) without a fee when initiating the transfer from ING's page, I've done it many times.

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[blanche]

I've never tried transferring money from BoA to somewhere else from the BoA webpage. But you can initiate a transfer of money from BoA to another bank (ING in my case) without a fee when initiating the transfer from ING's page, I've done it many times.

well there you go.
however, it leaves something to be said that they won't let you initiate the transfer from their end. there is no reason for them to charge that fee except for the fact that they can, as america's biggest baddest bank..

 

[The White Coat Investor]

we borrow money for homes, we borrow money for cars, we borrow money for school. what the hell is "stupid" about borrowing money for expensive toys?.

Careful who you indict with your "we". I for one do not borrow money for cars and it won't be long before I don't borrow money for a house. The value of housing/land generally keeps up with inflation (not to mention keeps a roof over your head and stabilizes the cost of housing when compared to renting long-term.) This marks an important difference between financing a house and financing an expensive toy. Student loans are an investment in future earnings power, and thus are also not used to purchase a depreciating asset. These are wise uses of credit.

Buying consumer goods/services on credit is one of the biggest financial follies one can make. For many people, buying with "cash" is a better investment than any stock they may pick up down at the brokerage house.

 

[Twitch]

Careful who you indict with your "we". I for one do not borrow money for cars and it won't be long before I don't borrow money for a house. The value of housing/land generally keeps up with inflation (not to mention keeps a roof over your head and stabilizes the cost of housing when compared to renting long-term.) This marks an important difference between financing a house and financing an expensive toy. Student loans are an investment in future earnings power, and thus are also not used to purchase a depreciating asset. These are wise uses of credit.

Buying consumer goods/services on credit is one of the biggest financial follies one can make. For many people, buying with "cash" is a better investment than any stock they may pick up down at the brokerage house.

It really depends on the interest rate they (consumer goods/services) are charging. If < mkt rate, then maybe a good deal.

 

[Unlimited415]

I'm with AggieJohn and yoby here. I have great credit. My credit cards have a total limit of somewhere around 22,000 as I've paid them off almost every month since I opened my first one at age 18. It's great having 22K of credit, but I'm not sure what would actually happen to me if I maxed it out .

I have been told a couple times that it's good for your credit score to have an active balance your credit cards, rather than pay them off. Is this accurate?

For that reason I've always tried to stay around 50%, which worked when I had a $1,000 credit line, but they keep increasing it...so I've just been staying at around $500, even though I could pay it off...I just treat $500 as my $0 baseline balance.

 

[Unlimited415]

My vote is to go for the card with the best incentives and not worry about the interest -- that way you make money off the card instead of the other way around.

I would caution about doing that UNTIL you know how well you do with credit cards. In the end, we're still young and logic tells us we're going to do some of the mistakes young people are known to do, which includes running up your credit card bill...maybe it's a huge expense that comes up, a loan that doesn't come through for school, you get depressed and go on a spending spree...whatever it is.

Practice with a "safer" card first, then make your decision on card type based on how you fared with the first card....or when you figure out a system that works for you. It took me awhile.

But don't assume everyone is going to be diligent in paying off every month and not getting a balance. Treat yourself like a parent would treat you and give it a test run.

 

[Unlimited415]

Oops, correction. Need a $500 minimum balance to avoid fees.

Then what balance do you need for the high interest MMA (whatever that is?) that you mentioned in the original post.

yes, if you initiate a transfer from a boa account that does not go to another boa account, they will charge you per ach transfer. i don't know details if you initiate the transaction FROM your other account (ie an ING savings) TO a boa account, but i thought it was ridiculous b/c i also transfer funds to roomates for bills, my other checking account, etc etc.

The way around that is to use Bill Pay. I use it every month to pay my roommate. You fill out his name and address. Each month, you just type in an amount and confirm it and BofA sends a physical check to his (our) mailbox. You have to send it in advance, though, as it takes a few business days to print and send the check.

Online transfers among credit card, savings, and checkings are free and usually instant, though. But yes, customer service isn't greatest. Also, as baseline there aren't many fees, but if you screw up at all they'll slap you from all directions with fees.

 

[freestl8]

I have a checking account at BofA called nuevo futura. I'm not exactly sure why it's named that. Anyway, there is no minimum balance requirement (minimum balance requirement definition- if you was running short one month and had less than,say, $50 dollars, you would get a fine) and you do not need direct deposit- which most checking accounts with no min do require. The only thing is they take $25 every month from checking to put in savings- you can put it right back if you want. Or, if you forget about the savings account, its a nice little chunk of money to find at a later time.

 

[freestl8]

Thats ridiculous, you are wasting money on interest. Just make sure other bills in your name are paid on time- electric, cable, car payments.

 

[TMP-SMX]

I have been told a couple times that it's good for your credit score to have an active balance your credit cards, rather than pay them off. Is this accurate?

For that reason I've always tried to stay around 50%, which worked when I had a $1,000 credit line, but they keep increasing it...so I've just been staying at around $500, even though I could pay it off...I just treat $500 as my $0 baseline balance.

Terrible idea. As long as you pay the minimum balance it improves your score a small amount each month. However, you are paying so much in interest that it makes no sense. You get the same monthly improvement by paying off the entire balance along with an improvement in the balance to credit line ratio. The lower the ratio the less of a hit your credit score takes. So paying off the entire balance lowers the ratio and reduces the score loss you would have.

 

[Stroganoff]

So much misinformation in this thread. *head explodes*

But yeah, ^^ TMP-SMX is right, Unlimited415. Pay that balance off in full. Some creditors treat 50% as maxed out (although underwriting standards vary). Highest FICO utilization scores (which make up 30% of FICO) tend to occur when the utilization is close to 0%. None of this "active balance" stuff. Active card usage only applies to creditors' internal scores (there's dozens of scores), but it doesn't factor into the FICO score.

 

[Unlimited415]

Thanks for the advice.

(BTW, I keep moving credit cards, so I always have the introductory 12 month 0% rate, so I don't actually pay any interest...but if a lower balance really does helps my score, then I'll just pay it off)

 

[TMP-SMX]

Thanks for the advice.

(BTW, I keep moving credit cards, so I always have the introductory 12 month 0% rate, so I don't actually pay any interest...but if a lower balance really does helps my score, then I'll just pay it off)

Well with the 0% cards just make sure you pay off the minimum balance each month. I think with a lot of them you lose the 0% if you don't. Either way, your score goes down every time you close one account and also when you open a new account. Just keep that in mind. I think it's something like having 50% of your revolving accounts opened in the past 6 months reduces your score along with having your oldest account for fewer than about 3 years. Having less than 1% usage on most of your accounts raises your score. So if you pay off your bill before the statement comes you can easily do that. I know some credit cards don't allow that, but do it for those that do. (At least before applying for a large amount of credit where a higher score might make a difference)