[Chickenman]

This is just a useful piece of information I would like to know. I am 15 years old, I don't work, and I do not have a bank account or a credit card. If I was to buy something from the internet, what are the methods of payment I would be able to use? (Including buying from Head-Fi forums) Oh, and parent's credit cards are not a very good option for me at the moment. (I would prefer to use my own money without the help of my parents)

I would appreciate any useful feedback on this. Thanks in advance, Jayon.

 

[Naris]

The only thing I can think of at the moment would be a postal money order. However, it would still be safer to ask your parents to let you use their cards. I mean, you'd pay them back right?

 

[Uncle Erik]

Open a savings account that gives you a debit card. You may need a parent to cosign, but you should be able to get an account. That'll come with a Visa/Mastercard debit card in your name.

I would recommend against the debit/gift cards put out by some places like Wal-Mart. Check out the fee schedules on those. They'll want $8 to to issue it, $5 each time you add cash, and so on and so forth.

You might also want to look into getting a part time job. I was allowed to work at 15 in California, but that was 20 years ago.

Got a job at Burger King which was hellish, then left for one at the movie theater. That was better. I think I had checking even back then and managed it myself. Mom and Dad co-signed, but I took care of it myself.

 

[Chickenman]

Thats a good idea, Uncle Erik. However, being relatively new to America, can I get recommendations on what banks are good for youngsters like myself?

 

[appophylite]

Someone correct me if I am wrong, but I think there are 3 methods of payment that will work in your case as you have no credit card and you don't wish to utilize your parents card:

1) Direct cash payment: I would not recommend this method at all, because if that envelope gets lost or stolen during transit, you're going to be in a world of hurt.

2) Cashier's Check: This is a more foolproof method than direct cash, because the check is made in a bank and can be made for the individual/company to which payment is made. It can't be cashed in by anyone else. The problem with this case is that, like case 1, the check could get lost in the mail, and you'll be out that cash, unless the bank can retrieve the data on that check from their system, void it, and refund the cash.

3) Open a checking or savings account account with a bank: With this scenario, you can either write your own checks and follow method 2 (this is a bit unsafer as cashier's checks are more secure), you can open a paypal account with it, or you can utilize the debit/check card that most banks issue with an account exactly as you would use a credit card online. The only difference between the check card and a credit card is that the credit card has to be paid off when a balance is totaled for a specific pay period, whereas a check card takes the money out of your account right when the payment is made. This is the method I'd recommend and it is the method I used until I got my first credit card. Hell, I still use this method far more often than I use credit cards, because I immediately see the impact of a purchase on my account and find it easier to manage my money this way.

Quote:

Originally Posted by Chickenman /img/forum/go_quote.gif Thats a good idea, Uncle Erik. However, being relatively new to America, can I get recommendations on what banks are good for youngsters like myself?

A good starter bank that I'd recommend would be Wells Fargo Bank. I've been banking with them since I was 8 and I've yet to have major problems with them. Plus, its a fairly national chain, so if you were to move to another place in the US in the future, there is a very good chance of having another local Wells Fargo around.

 

[Chickenman]

Wow, thanks for all of that advice, Appophylite! I'll be sure to check on Wells Fargo and see if theres a branch near me.

Naris, yes, I do pay them back.. Sometimes

 

[Uncle Erik]

I'm with Washington Mutual, though I've had good experiences with Wells Fargo, Citibank and Union Bank of California. I don't know if Wescom services Diamond Bar, but they're good.

Why don't you ask one of your teachers if a credit union services your high school? There should be one, and they might give you a much better rate on a savings account. Worth asking - it pays to belong to a credit union. Even after you graduate, you can keep your account and get good deals on auto loans and mortgages.

 

[Chickenman]

Thanks for the credit union advice, I'll be sure to ask.

 

[hempcamp]

I agree that the store-purchased credit cards are not a good idea because of fees.

However, many banks have pre-funded debit card options particularly geared towards young people. You usually set these up through your parents' bank account. You deposit money (via your parents) and use the card as, they say, "anywhere Visa is accepted."

A bank account is never a bad idea for someone your age though. Helps you learn money management. I got one through a credit union when I was 15.

--Chris

 

[Chickenman]

So, is a credit union much better than a normal bank? I still can't grasp the concept of one. Sorry for being kind of ignorant.

 

[hempcamp]

A credit union is like a co-op for money. All the members of the credit union are also owners of the credit union.

Banks are owned by a group of shareholders who then sell their services to the members.

A credit union often has better interest rates on loans and investments, but this is not always the case. Customer service can also be better because of the smaller scale of the organization.

Most credit unions require some sort of status to become a member. There are credit unions for teachers, gov't employees, etc. As a student, it is usually easy to get membership at any credit union and once you are a member, you won't lose membership just because you no longer go to school.

Hope this helps!

--Chris

 

[Chickenman]

Thanks! This is why I love Head-Fi, the great atmosphere and the large amount of knowledge!

 

[appophylite]

Here's some info that might help better understand credit unions:

Credit union - Wikipedia, the free encyclopedia

For the sake of simplicity, a credit union will work (in your eyes, as a layman) pretty much the same way as a bank would. A bank will allow anyone who walks in and meets some minimum criteria to open an account or take a loan. A credit union limits itself to a specific demographic of people. For example, my father retains an account with a credit union up here called Northern Schools Federal Credit Union. This institution limits accounts to high school students, college students and faculty for said facilities. If you want to open an account and are not part of this demographic, you cannot. However, if you have an account with them and you then no longer fit the demographic, most will allow you to keep the account, ie you could open it as a student and once you graduate, they will allow you to keep the account until you close it again. As Uncle Erik also mentioned, it is likely that a credit union near you will offer much better interest rates on a savings account and, in the future, better rates on a loan. This is part of their appeal. I'd do more reading before just accepting my post, because I'm just stating what I know; I never had a credit union account as I was invested in a bank early on. But, at your age, it is a good decision to consider.

 

[owkia]

As you get older you'll probably also want to get accounts at both a credit union and a bank.

I started my first savings account in elementary school through Washington Mutual (WaMu) as they had a School Savings program with my school. They had someone at the school every week that you could deposit money with. I later was able to open an account with the local Postal employees credit union as my grandfather used to work for the Post Office. When I got my first (and current) job I opened a checking account with WaMu and closed down the School Savings as they started charging a service fee after turning 19. I just recently found that WaMu offered an Online Savings account that had a much better interest rate than my credit union account, so I went ahead and opened one of those. Because I already have a checking account with them they offered a higher interest rate and automatically waived the monthly service charge.

So basically, continually look at the different accounts that each bank offers. You might come across one that offers something like that WaMu Online Savings where if you have or open a checking account you get a higher interest rate. Make sure to check on any fees that they might charge so you know if you're getting a free savings account or not.

 

[kiwirugby]

Quote:

Originally Posted by appophylite /img/forum/go_quote.gif A good starter bank that I'd recommend would be Wells Fargo Bank. I've been banking with them since I was 8 and I've yet to have major problems with them. Plus, its a fairly national chain, so if you were to move to another place in the US in the future, there is a very good chance of having another local Wells Fargo around.

I concur. There are three Wells Fargo in Diamond Bar.

http://www.google.com/search?client=...UTF-8&oe=UTF-8