Beware of those charges

This post is about the unfortunate money issues that I had to deal with. Pricey lessons going for FREE right now! ;)

I have been in the United States for about 8 months now. I can still remember the past 8 months. (I can remember beyond that if I try...) I remember being really excited decorating my room, making new friends, starting classes. But there are also the more serious stuff as well, including: getting my phone plan (oh yeah, top priority) and setting up my own bank account.

A little background: All I knew about the bank was the ways to use the ATM card, the debit card, and the credit card. So in Singapore, credit card is the one that borrows money from the future-you, debit card is the one that uses the money in your account, and ATM card is, well ATM card.

Back to the flow of the story...
So I set up my account and got my card. I went shopping (mostly for groceries). I was impressed at how they are so cashless. I was usually running low on cash, so I would take out my card to pay the bills. They would ask, "Debit or Credit?"

I thought, "I want to use the money in my account." So I replied, "Debit." I did that for several purchases. BIG MISTAKE!

At the end of the week, I went to the bank and realized that with every transaction under "debit", I was charged US$1... Reason being that "debit" means you have the option of "withdrawing" cash with that transaction.

Lesson 1: Know what you are charging to does not incur extra charges for services that you are not utilizing.


So thank goodness I went there early and found out about it. The next story is a little more depressing (because the charges are higher)...

The bank divides the account into "savings" and "checking". When I use my card, I am charging it to my checking account. I put all my money in the savings account to reduce the risk of card theft and such. But one day, I went to the bookstore, and realized that I don't have enough cash on me. So I took out my card and said "CREDIT (lesson learnt)." The transaction was surprisingly successful... Joy! For awhile, I believed in the goodness in banks.

I did that for a couple other transactions, praising the banks in US for their awesome system elevates inconveince and does good to the world.

That week I had to visit the bank again. And then I found out that I was charged US$5 for each transaction. Reason being that I overdrafted my checkings account, so they had to draw money from my savings account to cover for my checking account. You can imagine what I was thinking then...

Lesson 2: Know what you are charged for and what you are not charged for. Ask outfront. Different banks have different charges. E.g. My room-mate's bank charged her a fee for adjusting her bank records too often...

To be fair to my bank, they refunded those fees, understanding that it was my "first offence." I was grateful for that. :)