#Adulting

Boring but necessary = #Adulting

My apologies up front – this is going to be a bit dry compared to the normal blog format. The reason this blog is going up now has to do with Section 2.1 as it holds timely information regarding paying tuition with credit cards for those interested.

Also, MAJOR credit to Sachin and David (MS4 Co-Presidents) for sharing much of this info with us. As always, this blog represents our personal opinions and NOT the official voice of UTSW or travel/financial advise from us.  We’ve really got to stress that.  Information surrounding all of the points below is readily discoverable on-line or elsewhere, and if you do decide to go forward with anything mentioned below, it is entirely on you. We are not endorsing any product and we are not being compensated by any product or third party. So, are you ready for the TL;DR?

1. Global Entry
2. Credit Cards
   1. Tuition
   2. Fast Facts
   3. Credit Scores
   4. Picking Cards

1. Global Entry:

1. What
   1. TSA Pre-Check – $85 – program to get you through the Pre-Check lines at the airport, decreasing your time in security lines. When you purchase a ticket, you provide your Trusted Flyer Number, and then your ticket will have “Pre-Check” on it which will allow you to enter the shorter, faster line (won’t have to take off shoes or take out electronics/liquids). Not all airports will have Pre-Check lines, but in most cases it will save you lots of time.
   2. Global Entry – $100 – program that allows you to skip customs lines when returning from international flights and just go through Global Entry kiosks. It automatically enrolls you (at no additional cost) into TSA Pre-Check. 
2. Why
   1. This is essentially necessary for 4th year interviews
   2. I would encourage anyone with spare time this summer/semester to do this sooner rather than later because it stays valid for 5 years
   3. I would recommend Global Entry over TSA-PreCheck if you plan on traveling abroad at least once over the next 5 years
3. How
   1. Both involve filling out an online form, paying the fee, and then going in for a 5 min interview at DFW (check airports, I did mine at IAH)
   2. Sign up for this ASAP so you can get an interview, they fill up weeks in advance. Check regularly for earlier interviews, because spots open up frequently throughout the week. 
   3. Takes about 1 week after the interview to get fully approved. 

2. Credit Cards

1. Why should I get a credit card?
   1. Build up your credit
      • Med School seems like a tough time to start using credit cards, but in some ways it is ideal. Loan disbursements come in lump sums, so you have already been practicing your budgeting for a year.
      • If you are nervous about having a credit card, start small. Pick a consistent monthly payment – something like your internet bill, cell phone service, car insurance – and set up automatic online payments that you can pay off every month
      • Most apartments will charge a credit card fee, so I do not recommend using your credit card on rent
   2. Rewards! If you are spending the money anyway, why not get some bonuses?
2. Pay Tuition with Credit Card with no surcharge
   1. I repeat: NO FEE TO PAY YOUR UTSW TUITION WITH A CREDIT CARD. THIS IS UNHEARD OF.
   2. Why? REWARDS! Many credit cards have sign up bonuses that given you hotel, airline, or cash back points if you spend a large amount of money in the first 3 months. Paying for tuition will get you all but the largest sign up bonuses as well as 1-2 points on every dollar you pay for tuition and other purchases.
   3. You should be able to pay with credit card without a fee and even split your payments across multiple cards/methods if your spending limit is less than tuition.
   4. To do this, simply log into your PeopleSoft>Student Service>Make A Payment
   5. The charges went live on PeopleSoft on Monday July 18th so you can set this up ASAP
   6. It generally takes 7 to 10 days to get a credit cards, so if you are in the market I would suggest diving in soon
3. Fast Facts (and some opinions)
   1. Get a no fee credit card to keep long-term to build up credit score
   2. Credit Score >720-740 = excellent
   3. Do not spend more than you have
   4. Pay off card fully 1-2x/cycle & immediately if close to the spending limit
   5. Successfully applying for a card won’t drop your score much
   6. It’s ok to cancel in 2yr or even 1yr, but this will decrease your credit history
   7. Some banks limit how often you can apply (e.g. 5 cards/24mo), >2 at once may cause a big score drop
   8. Pick a card(s) that fits your spending habits & rewards preference
   9. If this is your first foray into the world of credit create a budget first; credit cards can become forgotten amounts because you don’t feel the pain immediately – don’t let that happen to you
   10. Consider the ease of checking your balances or linking accounts; if you’re indifferent between two cards, go with an option that auto-links to an account you already have so you don’t forget about an account floating in the abyss
4. Credit Scores
   1. The Fair Isaac Corp. periodically releases formulas that use consumer credit reports to create a FICO score. The FICO-8 is the credit score most widely used by banks when deciding to approve you for a credit card (or mortgage, etc.) and it is supplied by 1 of the 3 credit bureaus (Equifax, TransUnion and Experian). It will differ depending on which bureau is reporting. Essentially banks use it to assess how “good/reliable” of a borrower they think you’ll be.
   2. How do you get a good Credit Score: The two biggest determinants are typically your payment history (pay your bills, credit cards, and loans on time, and you’ll help your score) and your debt owed (a big component is your Credit Utilization Ratio). While student loans do factor into the amounts owed category, they have less of an impact than credit card debt does. Generally a medical student can improve their score by having 1-2 long term credit cards paid in full often or at least on time and paying all other bills/loans on time.
   3. How the heck do I check my mysterious credit score?  Good question.  There are a number of options out there (and some banks/cards are starting to include this with standard services) and we can’t advise one method over any other.  Sites like CreditKarma, FreeCreditReport and TrueCredit (add “.com”, respectively) all check the three (3) major credit reporting institutions and provide a quick report.  That said, you’ll have to provide personal information, including your Social Security number, so if you aren’t comfortable doing so, (see also: you like to study in your own private, underground bunker, and sign most documents with a nom-de-plume) then this may provide too much heartburn for you.
5. How to pick a card
   1. As co-presidents, we are not class financial advisors, so we can’t answer that for you specifically. Generally, owning 1-2 long term credit cards (cards you hold on to pretty much indefinitely) that you use and pay off at least once per billing cycle is a good idea. You typically want this to be a card with no annual fee and decent rewards.
   2. Research and determine your preferences. I think this is a great basic list of questions to answer as you begin the search.
      1. How sensitive are you to having annual fees?
      2.  Do you prefer travel rewards or cash back or other rewards?
      3. Are you loyal to a particular airline?
      4. Are you loyal to a particular bank?
      5. Are you willing to keep up with rotating categories, or would you rather have a flat rate?
   3. Shop for cards and have some fun with it
      1. I would recommend starting with your bank(s) and seeing what thay have to offer.
      2. Many websites will offer credit card comparisons, but at the end of the day, it is a personal decision.
      3. Start with one card. Start small and build from there.
6. Final thoughts – a credit card can be a great tool, but it can also go very wrong if you do not manage it the right way.  Missed payments cause rates to flip upwards to very high levels and, when coupled with potential fees, can create significant debt.  Make sure you have the tools and focus to pay attention to the rates, payment dates and ability to repay before jumping into anything.

If you made it to the end of this email then you are a champion. Cheers to you!

Enjoy some more lazy weeks of summer,

Katherine and Reed