Guide for Israelis going to study in the US

How much money will I need during the first months?

It will probably take some time before you'll get your first stipend paycheck. To work out how much cash you'll need until then add up the following:

Temporary housing costs during the house-search period.
After you've found a place, rent. Note that setting up the lease will cost some more money; you will probably be asked for a deposit (usually equal to a month's rent), and maybe a check for last month's rent as well.
Cost of whatever you want to buy during the first few months. The exact list depends on what you brought with you, but you will probably want basic furniture, kitchen appliances, etc.
Cost of a car, if you plan on buying one right away. Many car dealers are located out of town, so consider renting a car for a few days for the search process. A note about rental cars: you'll be required to pay an insurance fee (CDW), unless you carry your own. Try and make arrangements with your current (Israeli) car insurer, or with your credit-card company, to extend your current policy to rental cars (more information here, anyone?).
Food for the period.
Setup costs for a telephone line, first electricity bill, and so on.

What is the best way to transfer money to the US?

The definition of "best" is subjective. Here are several possible ways:

Traveler's checks. The post office will sell them to you without charging the insurance fee (allegedly, they're still insured), and for a good rate. The disadvantage is that they (the post office) only take cash, meaning you'll have to make a pretty big withdrawal at your bank and carry the money around to the post office (does anybody know if having an account at BANK HADOAR solve this?).
Bank transfer. This is most convenient, but can cost a bundle, and you will have to know the account number of the receiving party. This means you can do this only *after* you've opened the US bank account.
Simply charge purchases in the US to your Israeli (international) credit card. The rate isn't bad -- just make sure you leave enough money in Israel to cover the bill! You can tell your Israeli bank to open a dollar account for you, and transfer money to it; you then tell your credit-card company to deduct international charges from that account. Note that:
1. Most (all?) credit-card companies deduct international charges on a weekly basis, not monthly.
2. Drawing money from an ATM (CASPOMAT) using the Israeli card is much more expensive than using the same card for purchases. If you must, try and walk into a bank and ask them to give you a cashier's check drawn against your international credit-card. This method will not work for small amounts (cashier's checks cost a few dollars each, and the cashier fills out the "payable to" line when preparing it).
Depending on how much you are willing to carry on you, there's always cash. Note that buying cash dollars will probably mean you'll be doing it in the "cash" (high) rate.

One last note. On the plane before landing in the US you will be asked to sign a customs declaration. For tax purposes, it is considered a good idea to declare whatever amount you're bringing in.

What about bank accounts?

You can open an account using just your passport, which means you don't have to wait until you get your social security number. Bank fees and commissions in the US are usually higher than in Israel (some are considerably higher), so make sure you understand what you'll be paying for. Over-draught is not allowed, and the equivalent of a PAKAM is called a "savings account" (a normal OSH is a "checking account"). There's also a "certificate of deposit" (CD), which is essentially a PAHAK. Just to give you an idea on bank fees, a bounced check will cost you $30. And you will be most probably charged that again by the merchant to which you gave the check. Also, because of ATM fees, it was cheaper for me to get money from the wall at the Milan airport, than in Pittsburgh if I used the wrong ATM, both withdrawals made from the same account in Pittsburgh.

A note about new accounts: Note the small print regarding withdrawals from your account right after opening it. New accounts are restricted, so you could come in with a check, deposit it, and then find out you can't withdraw the money for 15 or 30 days. Cash deposits (and EFT's, I believe) should be available for withdrawal immediately. Or simply have a back-up, like an international credit card you case use at an ATM.

There is no need or apparent benefit to getting your credit card from the same bank you keep your accounts in. Many banks offer interest-bearing accounts (that is, a combination of a checking and a savings account). Personally, I think they're not worth it since the interest is ridiculously low and there is a non-negligible minimum balance requirement. This means you'll be losing interest money, so there's more to think about besides the low fees this account may have.

Personally, I dislike the bigger banks and try to do my business with the smaller ones. It seems the bigger ones overcharge you for pretty much everything. On the other hand, smaller banks don't have as many ATM machines around the city (there is a fee for pulling money out of an ATM which is not owned by the bank that issued your card).

In general, there is no HORAAT KEVA here. Here and there, you might be able to find a vendor that supports it, but there might be a fee involved (as well as a possible fee to get your bill in the mail instead of e-mail - go figure). So you need to either write checks and lick stamps and mail them, or use a bill-pay service (usually online). Many banks offer bill-pay services that are tied to your account. That is convenient. But - can you guess it? - there is a fee.

One bank fee that is easy to get away without paying is the cost of checks. When you open the account will be given a free checkbook of 10 or 25 checks, and they'll ask you if you want to order some more. Don't! You can get the same checks for less than a quarter of the price at a third-party printer. They also have many more choices of graphics (for the background of the check), letter styles, and so on. You usually mail them your order (they need a sample of your current checks), and get the checkbooks back within a few weeks. I never had any problems using those checks --- they seem to have the same security measures (watermarks, micrographics, etc.), as the "bank" checks. I wouldn't be surprised to find out that the banks print their checks there before slapping on a fat commission. You can find some of these printers here.

When you open the account, the bank will give you an ATM card, which is also a debit card. This means you can use it "like" a credit card to buy stuff. The difference is that the charge is deducted immediately from your account balance, so your account must have enough money in it to cover the purchase when you make it.

You can avoid standing in line for the ATM and possibly paying a fee by using your debit card for your supermarket purchases. You ask for some cash back (up to $40 or so is OK), and they simply over-charge your card by that amount and give you the balance in cash. Note this doesn't work for credit cards (and if it does, it's called a "cash advance", and you definitely don't want to pay the associated fees).

How do I get a credit card?

Before we start, a note about credit cards. You can get them from anyone, not just your bank. At the end of the month you will be mailed a statement, and you are expected to mail back a check for at least some minimum amount. The interest on the balance is very high, and for most cards means you'll be losing the 30-day grace period on outstanding purchases until your account is paid in full again. If you're the kind of person who lives on over-draught then this is the American equivalent of it. In any case, pay at least the minimum amount or risk a bad credit record (see below), as well as losing the card.

In the US, financial records about you are kept by credit agencies. The "big-brother" effect is quite shocking --- a late electric bill, for example, can come back at you a couple of years later when you apply for a loan. Your record will be examined by credit companies before giving you cards, by anyone whom you want to lend you money, by car dealers (unless bought in cash), and even prospective landlords. You want to keep this record clean.

Your problem is, you have no record to start with. This means that in the beginning it will be hard to get credit cards and so on. There is no secret here --- you just have to wait a couple of months. In the meantime, try and build a good record by paying bills on time. Apply for, and use, store-only credit cards (those are easier to get) at department stores, gas stations, and so on. There are also "secured" credit cards, where you pay in advance and whatever you buy is deducted from the balance (technically, they're not credit cards, but nobody can tell the difference --- except for you and the issuer).

Usually credit card companies have a booth on-campus during the first weeks of the semester. Apply for those as well --- they are more lenient than usual, and you get a free T-shirt just for applying :). Those "student" cards usually carry a lower line of credit and higher interest, so you will want to cancel them soon as you get something better.

As time passes your credit rating will improve and you will be able to get a reasonable card (read as: you will get a lot of junk-mail from companies wanting your business). As of today (summer 2001), most don't charge a yearly fee, and offer some insurance on purchases, as well as other goodies (eg, some percentage of your purchases is given back to you either as cash or as a check payable towards your phone bill balance). For current offerings see this site. It is a good idea to keep one of the low line-of-credit ones around to be used exclusively for Internet purchases.

Maintained by Dan Pelleg.

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