Money and Banking

Let’s talk about money. Whether we pay with cash, credit card, or online payment, we still have to pay for stuff – and that money has to come from somewhere, too. So read on to learn more about all the details about money in the USA you know you should know but are too embarrassed to ask about.

U.S. monetary system
First things first – the money itself. The U.S. monetary system is a decimal system, with one dollar equal to one hundred cents. One dollar is written as $1 or $1.00, and one cent is written as 1¢. One dollar and twenty-five cents would be written as $1.25, and that’s important to remember because many currencies use commas to separate cents from the main amount, but in the USA we use a period.

Also important to remember: Dollar amounts are written with a comma every three digits (as are numbers used in any context), so one thousand dollars would be written as $1,000.00.

Paper currency is used for amounts of $1 or more, and coins are used for amounts under $1. The most common coins and their dollar equivalencies are as follows:

Coin Figure on Front Value (Cents) Value (Dollars) Color
Penny Lincoln 1 cent 0.01 dollars Copper
Nickel Jefferson 5 cents 0.05 dollars Silver
Dime Roosevelt 10 cents 0.10 dollars Silver
Quarter Washington 25 cents 0.25 dollars Silver

Paper currency is most often circulated in the following denominations: $1, $5, $10, $20, $50, and $100. Each denomination includes a picture of a famous American statesman on the front. The following table describes the images on the various denominations.

Denomination Portrait on Front Illustration on Back
$1.00 George Washington Great Seal of the USA
$5.00 Abraham Lincoln Lincoln Memorial
$10.00 Alexander Hamilton US Treasury Building
$20.00 Andrew Jackson White House
$50.00 Ulysses S. Grant US Capitol Building
$100.00 Benjamin Franklin Independence Hall

Bank accounts
Where will you keep your money? Hopefully not in large amounts under your mattress but in a bank, and specifically in a checking account. Checking accounts serve as a place to keep your money for daily usage, while savings accounts are designed to earn you more money. Every bank has its own set of terms for setting up and using their accounts, so make sure to compare fees and requirements before opening an account. If you choose to keep a bank account in your home country, you may face fees or currency conversion rates from your local currency if you use it in the USA.

Most checking accounts will include a debit card you can use to withdraw cash from your account at any ATM, 24-hours a day. This lets you make deposits, withdrawals, and complete other basic transactions at any time, even when the bank is closed. But beware – some ATMs in stores or other banks (as opposed to those located in your own bank building) – charge usage or withdrawal fees and may have much more limited transaction options.

Banks are typically open with staff from approximately 9:00 a.m. to 4:00 p.m., Monday through Friday, though these hours are sometimes extended depending on the bank or location. Many banks are open on Saturdays, sometimes with more limited hours, and very few banks are open on Sundays. However, you can use ATMs anytime because machines never take a day off.

Credit cards
Credit cards are such an ingrained part of the American way of life that they’re basically accepted everywhere; some people, in fact, rarely carry cash because they use credit cards so much that dollar bills seem unnecessary.

Many credit cards offer rewards, such as airline miles per dollar spent or money back, but those same cards may also require a big annual fee. Most of these offers are worth looking into, but there are often numerous caveats, restrictions, or drawbacks for each one, so it pays – literally – to do your research.

Unfortunately, international students find it difficult to get a credit card in the USA because they do not have an established credit history, which credit cards use to ascertain the likelihood you’ll pay off your balance and if you’re therefore worth taking on as a customer. In a frustrating cycle, however, you often need to have a credit card in order to establish a credit history. The solutions to breaking this cycle are few and far between, but generally include finding a credit card that will allow you to open an account with a co-signer, opening a credit card with an international bank that has a branch in your home country, or convincing your landlord to report your timely rent payments to the credit bureaus so you can start building a credit history.

Digital payments
With modern technology, there are lots of ways to spend money using an internet-based program. Though you can definitely write physical checks to pay your bills, you can also make online payments to utility services, credit card companies, schools, and many other institutions. These allow you to pay directly through the website or app by linking directly to your bank account (or credit card account in some instances) so you have real-time information about your payments.

What if you borrowed money from a friend? You can pay them back using an app on your phone. These days, many Americans have switched over to using Venmo, PayPal, Chase QuickPay, Zelle, or other payment apps as a way to reimburse a friend for that cup of coffee in under a minute. Each app is free and links directly to your bank account, so you can keep track of everything without writing numbers down on the back of your hand.

Paying with Google Pay and Apple Pay is also slowly gaining momentum in the USA. These apps act as a sort of virtual wallet, and users simply place their phone over the credit card machine at a store register and, voila, the money is deducted from the credit or debit card you’ve linked to the app.

Exchange rates
Some banks will exchange foreign currency for a fee, as will major hotels or various booths at the airport. This could be useful for when you first arrive in the USA, but once you’ve settled in you should use dollars exclusively and save the currency from your home country for when you go back for vacations.

Card safety
There are two extremely important tips you should always keep in mind for credit and debit cards. First, if either of them is ever stolen, notify the bank or credit card company immediately. And second, keep track of your spending – you’ll face fees or penalties if you withdraw more money than you have available in your account.