How to Maximize Your Credit Cards While Studying Abroad

A study abroad program offers you an immersive experience in a different culture where you can explore international academics, learn a new language and make lifelong friendships. However, living in a new country often comes with challenges including how to wisely spend your money.

For many, credit cards are the best option for managing expenses abroad, especially when it comes to unforeseen emergencies or last minute travel adventures. Using credit cards can help with currency conversions, incidents of fraud and build your credit, but it’s important you keep your spending on budget. Otherwise, you may be returning to the U.S. with unplanned debt.

When it comes to creating your study abroad budget, you need to think of the overall picture of living in another country for several weeks or months, maybe even a year! How much should you estimate for food, clothing, necessities and splurges? Will you travel on the weekends? How often will you go to cafes? Even more important: what form of payment will you bring with you — cash, debit or credit cards?

While it’s common to use cash or debit cards for purchases in the U.S., it can be riskier abroad. For example, cash can be spent more easily without considering your overall budget, leading you to be short for other expenses in the month. It can also be more easily stolen. Conversely, your debit card may not be accepted everywhere and your bank may charge foreign transaction fees which can add up quickly if you’re not strategic with your spending. Using credit cards abroad is another popular option because most cards are accepted worldwide, many without transaction fees, and provide fraud protection.

Generally, how credit cards work abroad is similar to the U.S. When you use your credit card for purchases, you will still receive a monthly statement and a monthly due date for your payment. You can also still pay via your bank account. This often helps keep students abroad up to date with their spending, helps them build credit and can improve their credit score.

With that said, it’s important you’re aware of not only the benefits, but also the potential drawbacks, including accumulating debt. The following benefits and drawbacks can help you determine if using a credit card for your study abroad expenses is the right option for you.

As an international student, not only will you need to focus intensely on your academics abroad, you’ll need to keep a close eye on your spending and expenses. A credit card is a convenient and safe way to help you manage your finances. Learn more about the benefits of using a credit card abroad as an international student.

While students may find it beneficial to use credit cards during their study abroad, there are some potential drawbacks to be aware of. Knowing what these are can help you avoid making spending mistakes that can have a negative impact on your finances.

Finding the best student credit card can be overwhelming, especially if you are selecting your first card. There are various factors to consider when choosing a credit card. The features and benefits that matter most depend on how you plan on using it. For international students, these may include foreign transaction fees, annual fees, travel protection, rewards and bonuses. Having a clear understanding of how student credit cards work can also help you get started.

Foreign transaction fees, also known as international transaction fees, refer to the charges cardholders are charged for overseas purchases or when using a foreign bank to process a transaction. Depending on the card, this can be costly.

Even a low foreign transaction fee can add up over time and lead to a large expense. To save money, you can look for credit cards with no foreign transaction fees.

Comparing annual fees when choosing your study abroad credit card can help. Annual fees refer to the amount credit card issuers charge to keep their cards active and the cost of fees may vary. Consider the benefits and features that a card offers to determine whether paying for the annual fees is worth it. You can also find no annual fee credit cards.

As a study abroad student, you should also consider issuers’ customer service and emergency assistance options. This is important if you lose your card or it’s stolen. You may want to review fraud protection services, too. It’s valuable to know your options in the event of hacking or unauthorized use of your card. Some credit cards also include additional travel protection features, such as account lock, car rental coverage, accident insurance, luggage insurance and travel delay.

It’s definitely worth comparing the rewards and bonuses of cards you’re interested in. Some credit cards offer cash back, miles or rewards points. You can earn points when making certain eligible purchases and you can use your points as cash back, to offset payments or get additional benefits. Note that earning rates typically vary per card.

Using a credit card can help you manage your finances while living abroad. However, you need to use your card responsibly and ensure you’re aware of your spending. There are also some key factors to watch for when you get your monthly statement, such as reviewing foreign currencies and transactions and verifying your transactions are legitimate.

Before leaving the country for your study program abroad, it’s essential you are financially prepared and understand your credit cards’ limitations and features. The following steps can help you get started if you’re planning on using your credit card overseas.

• Ensure your credit card has the right features. It is important to verify whether your credit card can be used overseas. Some features you should look for include EMV capability. If you plan on using your credit card frequently, it may be wise to use a card that doesn’t have foreign transaction fees.
• Research your host country’s accepted forms of payment. You need to be aware of what cards are accepted in your study abroad city and country. Some countries have limited or no credit card networks. Generally, Visa and Mastercard are the most widely accepted.
• Bring more than one credit card. If you have multiple credit cards, it’s advisable to consider bringing more than one card with you. This will provide you with a backup card if your primary credit card gets compromised, lost or stolen. You may also bring a debit card for emergency cash withdrawals.
• Inform your credit card provider about your trip. You should let your credit card issuer know that you will be studying overseas. This way, they can watch for any suspicious and fraudulent transactions and notify you immediately if there are any issues.

Planning to study abroad requires thorough research on a wide variety of topics, such as the host country, program academics, accommodations, funding options and more. Additionally, you have to ensure you’re well-prepared financially and have time to apply for scholarships, grants, aid and loans. Learn more about study abroad funding opportunities, tips and considerations in the following resources.

• Federal Student Aid: Find resources for federal student aid programs, including scholarships, loans, grants, aid for military families, aid for international study and other resources available from the Federal Government.
• Fulbright U.S. Student Program: Fulbright offers grants to recent bachelor’s degree recipients, master’s and doctoral candidates, as well as young professionals who want to further their studies or research projects abroad.
• Gates Cambridge: The Gates Cambridge Scholarship program awards full scholarships to students from outside the U.K. who wish to pursue a postgraduate degree at the University of Cambridge.
• InternationalStudent.com: This online resource provides tools that can help international students around the world. Find financial aids, loan programs, universities and colleges accepting international students and international scholarships.
• Marshall Scholarships: Marshall Scholarships help young Americans pursue a graduate degree in the U.K. Every year, up to 50 Americans receive scholarships so they can study at any British University.
• StudentsAbroad.com: Get access to the Study Abroad Student Handbook Worldwide and learn various tips from choosing the right program and planning your study abroad to what you may need to do when coming home.
• The Center for Global Education: This is an international resource center to help students who want to pursue their education abroad. You can find handbooks, online courses and program selection resources.
• University of Milwaukee Center for International Education: Access financial aid resources and find out how much your study abroad may cost.
• Yale Study Abroad Budget Calculator: Plan your expenses with the help of a budget calculator. You can also get a copy of the computation for your total expenses and estimated budget through email.