The Mirror sat down with Ashlee Oldham the Assistant Vice President of Branches at Multipli Credit Union to answer questions for students about banking and the world of money.

Ashlee Oldham (Photo via Ashlee Oldham)

Q. What is the difference between a credit union and a bank?

A. Credit Unions are a full-service financial institution that offer all of the same products and services as a bank. The primary distinction is that banks are for-profit and credit unions are not-for-profit. Credit Unions still make a profit, but those profits are turned around and used to be able to help our members (account holders) purchase at lower interest rates and save at higher interest rates. As a member of a credit union, you are part of a family that works hard to take care of you through every stage of your life. We know that each account number represents a real person with different needs and goals. This is why we strive to get to know our members so that we can give them honest and personalized advice.

Q. What’s the best credit card to get as a college student?

A. Look for a VISA or Mastercard that has no hidden fees and a low interest rate. Rewards cards and retail cards that offer discounts (like Express or Victoria’s Secret) can sound exciting but if you don’t pay off your full balance one month, you can often be stuck paying a high interest rate.

No matter what card you choose, closing your first tradeline (typically a credit card) can damage your credit score so make sure you choose one that you’ll want to keep open for a long time. Monitor your card closely and make at least one charge on it each year so that it doesn’t close due to inactivity.

Q. What are good ways to start boosting your credit score?

A. Start with establishing credit. It is typically recommended that you have at least one revolving credit line (like a credit card) and one installment loan (like a car loan or our Credit Builder Loan). Once your score is established, make sure you make early or on-time payments every single time as late payments can really hurt your score. If you do find yourself struggling to make a payment, make sure to contact your financial institution before the payment is due so that you can work together to find a solution. If you have a credit card, make a small purchase on it each month and then pay off the full balance on your card each cycle if possible.

Q. What are the best investments for students?

A. The best investment students can make right now is building a savings account that leaves room for emergencies.

Once you’ve established your emergency savings, you can start thinking about investing for retirement. We like Roth IRAs for young adults because you can make contributions now and your savings grow tax-free. You’ve already paid taxes on the funds you are putting into the IRA so when you withdraw them at retirement (when you are likely in a higher tax bracket), you don’t have to pay any taxes! As you begin your career, look for a company that offers retirement plans with matching funds and take advantage of them. Keep adding different types of plans and investments to your portfolio (in other words, don’t put your eggs all in one basket), and you will be set for retirement.

Q. What are the pros and cons of direct deposits for payments?

A. [They] are the same… It’s out of sight and out of mind. Just make sure that if something changes, like your job or account number, that you remember to notify each company that you have set up for automatic payments. Ask your financial institution if they have alerts to notify you if a payment doesn’t get made so that you can manually make the payment before getting charged a late fee or before it affects your credit.

Written by Jacob Maher.