Banking in the US — open accounts, build credit, avoid fees

Pick a checking account: traditional, online, or both

Traditional banks (Chase, Bank of America, Wells Fargo, Citi) have the densest branch and ATM networks. Useful if you handle cash, want in-person service, or plan to apply for a mortgage with the same bank later. Most charge a $10–15/month fee, waived if you direct-deposit a salary or maintain a minimum balance.

Online banks (Ally, Capital One 360, SoFi, Charles Schwab High-Yield Investor Checking, Marcus by Goldman Sachs) charge no monthly fees, pay 4–5% on savings (vs 0.01% at traditional banks), and reimburse out-of-network ATM fees. Trade-off: no branches, no cash deposits except via partner ATMs.

A common pattern: keep a small Chase or Bank of America checking for cash deposits and the occasional in-person need, plus an Ally or SoFi savings account for emergency fund and short-term cash.

Anatomy of a US account number

Two numbers identify any US account: a 9-digit routing number (the bank and branch) and an 8–12 digit account number. You hand these to your employer for direct deposit, to a landlord for ACH rent, or to set up bill pay. Both are printed at the bottom of every paper check.

There is no IBAN — the US never adopted the European standard. International transfers into a US account use the SWIFT code (BIC) plus the account number, often via a wire transfer for $10–35 incoming and $25–50 outgoing. Wise and Revolut typically beat bank wires for dollar-conversion transfers.

Building a credit file from zero

A US credit file starts the moment you take a credit product reported to the bureaus — a credit card, a car loan, a tenancy reported through a service like Experian RentBureau. Without a file, prime credit cards, car loans, mortgages, and even some apartment rentals are out of reach.

The fastest legitimate path: open a checking account, get a secured credit card (Capital One Quicksilver Secured, Discover it Secured, Chime Credit Builder) that requires a small deposit equal to your credit limit, charge a small amount monthly, and set autopay to pay it in full. Six months of clean payments lifts your score significantly; eighteen months gets you to "thick file" status with FICO scores in the high 600s+.

If you held a credit card abroad with American Express, the Global Transfer programme imports your overseas Amex history into the US — one of the only ways to get a prime card from day one without a US history.

How a FICO score is built

FICO scores range 300–850. Above 740 unlocks the best mortgage and credit-card rates; 670–739 is "good"; 580–669 is "fair" and limits options; below 580 is "subprime" with high interest rates and tight approval. VantageScore (used by Credit Karma) is similar but lenders mostly use FICO.

• Payment history (35%) — never miss a payment by 30+ days. One late payment can drop the score 60–100 points.
• Credit utilization (30%) — keep card balances under 30% of the limit, ideally under 10%. The score uses the statement balance, not the unpaid balance.
• Length of credit history (15%) — the older the average account, the better. Closing old cards hurts.
• Credit mix (10%) — a mix of revolving (cards) and installment (loans) helps, but not enough to chase loans for it.
• New credit (10%) — too many recent applications hurt for ~12 months. Space applications 3+ months apart.

Rewards cards: meaningful money once your file is thick

US credit cards offer some of the world's most generous rewards — 2% cashback on everything (Citi Double Cash, Wells Fargo Active Cash, SoFi Credit Card with direct deposit), 5% rotating categories (Chase Freedom Flex, Discover it), 3–4x points on travel and dining (Chase Sapphire Preferred, Amex Gold). A typical household with reasonable spend earns $500–1,500/year in cashback or travel value, paid for by the merchant via interchange fees.

Pay in full every month. Average APRs sit around 22–28%; carrying a balance erases all the rewards and then some. Set autopay to "statement balance" to never miss a payment and never carry interest.

Savings and investing — start with the 401(k) match

If your employer offers a 401(k) with a match, contribute at least enough to get the full match — anything less is leaving guaranteed compensation on the table. Typical match: 50–100% of contributions up to 3–6% of salary.

After the match, the standard advice is to fund a Roth IRA up to $7,000/year (2026 limit, $8,000 if 50+) at Fidelity, Vanguard, or Charles Schwab in a target-date fund or a low-cost index fund. Above that, return to the 401(k) up to the $23,500 employee limit. High-deductible health-plan participants can also use an HSA — triple-tax-advantaged for healthcare costs.

For taxable savings, a high-yield savings account (Ally, Marcus, SoFi) for emergency fund and a low-cost broker (Fidelity, Vanguard, Schwab) for index funds is the simplest stack for most households.

FDIC insurance and where money is safe

FDIC (Federal Deposit Insurance Corporation) insures deposits up to $250,000 per depositor per insured bank. Joint accounts cover $250,000 per co-owner. SIPC covers brokerage accounts up to $500,000 against broker failure (not market losses).

For balances above the limits, spread across multiple banks or use Treasury bills — backed by the full faith and credit of the US government, with no FDIC ceiling.