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KNOXVILLE, Tenn.– A basic checking account and a credit card are the only tools of personal finance most college-bound students need, says a University of Tennessee finance professor.

Dr. Phillip Daves says college may be the first real test of whether a student can handle money, so it’s important to keep spending and credit choices simple.

 For the checking account, Daves recommends overdraft protection of $200-$300. For the credit card, a charge limit of no more than $500.

 “If a higher limit is offered, turn it down,” says Daves. “A student with a credit limit of $10,000 is an accident waiting to happen.”

 Daves does not recommend either a credit card or over-draft protection for students who lack the self-control to watch their spending.

 “My recommendations are meant to be followed with the understanding that a good credit rating is a valuable asset to be carefully developed and maintained.”

 Daves also has other tips on checking accounts, credit cards, debit cards, other cards, health and life insurance.

 Checking accounts:

 — Nothing wrong with keeping a hometown checking account, but a bank or credit union closer to school will be more convenient. Accessibility can be especially important if problems develop.

 — Compare checking fees between banks or credit unions. Some institutions will charge students as much as $10 per month, plus 10 cents per check, so it pays to shop around. An offer of free checking with a minimum account balance of $500 should be considered.

 — The checking account should provide over-draft protection of $200-$300, just in case. A parent may be asked to co-sign for the protection. Let them, if they will. One bounced check can equal $50 in penalty fees. Worse still, when an account is overdrawn, two or three checks often bounce before the error is discovered.

 — Don’t need over-draft protection? “Nah, get it if you can,” says Daves. “I’m a Ph.D. in finance and I’ve added when I should’ve subtracted. I’m careful, but it happens.”

 Credit cards:

 — A basic Visa or MasterCard with a low credit limit is fine. Use it one or twice a month, never charging more than can be paid back at month’s end. Never miss or make a payment late.

Debit cards:

 — Not recommended because it’s too easy to forget to write down every debit card transaction as a checking account withdrawal.

Other cards:

 — Avoid the so-called prestige cards because they are bad deals. “Just say, No!” Daves says. “I can think of nothing positive to say about any of them.”

 — Department store cards may be more available to students with little or no credit history. Get one to build credit history, paying off the balance every month. After a few months, try again for a major card.

Health insurance:

 — Every student needs health insurance. Fortunately, many are still covered by parents’ policies. If not, the student will need his or her own policy.

 Life insurance:

 — “Most students have no reason to buy life insurance. It’s inexpensive, but if you don’t need it, it doesn’t matter if it’s cheap.” Married students with children should consider a term policy, avoiding whole life policies.

 Daves’ final recommendation is to take a course in personal finance.

 Contact: Dr. Phillip Daves (423-974-1727)