Best Credit Cards for Students Studying Abroad
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As the school year starts up, many college students are likely thinking ahead to the spring or even next summer. For some, this may involve study abroad, a chance to immerse yourself in another culture and learn valuable life lessons along with your studies. My three-month stint at Queen Mary University of London firmly cemented my love of travel. Hopefully, many collegians can plan on similar opportunities.
The logistics of living abroad for an extended period of time can be challenging but there's help in one area: finances. Today we're going to discuss the benefits (for both parents and students) of getting a credit card before heading abroad. We'll get into the different cards to consider and then wrap it up by offering some card suggestions.
5 Reasons to Get a New Credit Card
1. You can easily earn a ton of points or miles.
One of the quickest ways to boost your point balances by a significant amount is to open a new travel-rewards credit card. This is primarily because of the lucrative welcome bonuses many of these cards offer. Here are some of the best ones out there right now:
- Chase Sapphire Preferred Card: 100,000 bonus points after you spend $4,000 in the first three months from account opening.
- The Platinum Card® from American Express: 75,000 Membership Rewards Points after you spend $5,000 on purchases within the first 6 months of account opening. Terms Apply.
- Citi® / AAdvantage® Platinum Select® World Elite Mastercard®: 50,000 bonus miles after spending $2,500 on purchases in the first three months of account opening.
The information for the Citi AAdvantage Platinum card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Chances are quite good that your child will be racking up some large expenses with tuition, books, lodging and even travel, so you shouldn't have any problem reaching these spending thresholds.
Of course, you can continue your earning spree by selecting a card with category bonuses, especially ones that your kid will be using quite frequently. For example, the Chase Sapphire Reserve offers 3x points on both travel and dining purchases, so anytime your son or daughter dines out or hits the road to explore, you're earning a nice bonus of Ultimate Rewards points on those purchases.
Chase has a wide description of what counts as travel: airlines, hotels (including Airbnb), motels, timeshares, campgrounds, car rental agencies, cruise lines, travel agencies, discount travel sites, operators of passenger trains, buses, taxis (including Uber and Lyft), limousines, ferries, toll bridges and highways and parking lots and garages.
2. You can avoid foreign transaction fees.
Anyone who travels outside the US even once a year should have a credit card that waives foreign transaction fees. If you send your child abroad with just a debit card or a plain-Jane, no-annual-fee credit card, you'll likely see a 2.7%-3% fee tacked onto every purchase he/she makes. I'd be willing to bet that most study abroad programs these days aren't exactly cheap; why add to this cost unnecessarily?
There are a variety of cards that do not charge these foreign transaction fees, so be sure to review our list to select one that fits for you. And even if you already have a card that waives these fees, signing up for a new one gives you the benefit of a large welcome bonus that an existing card won't.
3. You can build your child's credit history.
The third reason why you should consider opening a new card isn't selfish. It won't earn you points and won't save you money. One of the best things you can do for your children is to add them as authorized users on a new (or an existing) credit card. My parents both did this for me when I was in high school and college. When I got into the workplace and on my own, I found that I was able to get approved for new credit cards right away. That's because banks could look at my credit score and see my parents' histories of on-time, in-full payments, low utilization and other positive factors. Since my credit profile was associated with those accounts, it demonstrated to issuers that I too could responsibly manage lines of credit.
Just be aware that by adding your son or daughter as an authorized user, you become responsible for any and all purchases made on the card. If you're worried that may be an issue, consider an American Express card. This is (at the time of writing) the only major credit issuer that allows you to set predetermined spending limits on authorized users.
4. There's better protection on purchases and against fraud.
Another reason that doesn't have the flash of the bonus points but can be valuable nonetheless: providing added protection for your son or daughter. Generally speaking, most credit card issuers offer a $0 liability benefit to cardholders for fraudulent purchases on their cards. In addition, the card isn't pulling directly from your bank account balance, so it's not taking money from you. As a result, if the card gets lost or stolen and the thief tries to run up a huge balance, you likely won't need to worry about it affecting your finances.
Contrast that with having your child use an ATM or a debit card. There is some protection for fraudulent debit card purchases, but they still make an immediate dent in your account balance. This could lead to bounced checks or overdraw fees for legitimate purchases. And of course, taking cash out of the ATM leaves your son or daughter open to petty theft, with no way to recover the lost money.
This doesn't stop with fraud, however. Don't forget that many popular travel-rewards credit cards offer added layers of protection if (or when) things go wrong. Here are some examples:
- Purchase protection on cards like The Platinum Card® from American Express, giving up to $10,000 of coverage on eligible items that are lost, stolen or damaged (generally within the first 90 days of purchase)
- Trip delay coverage on cards like the Chase Sapphire Reserve, reimbursing you for additional expenses incurred when delays on common carriers result in an unexpected overnight or an otherwise delayed arrival at your final destination
These benefits (and others like them) can come in handy not only when it comes to purchases before your student heads abroad to study but also for trips during the program.
5. You can use the card (or the points/miles) to go visit
A final reason to get a new card is simple: to visit your student abroad! My mom and sister came to London for Thanksgiving when I was studying in London (my wife's family did something similar when she was there as well). If you open a card and grab a welcome bonus, it can help you finance the trip to see your son or daughter far away. If you open a card that's good for airfare purchases or includes lounge access, you can earn bonus points and enjoy added perks along the way.
Types of Credit Cards to Consider
If one or more of these reasons apply to you, what card should you actually get? There's no single best card for every type of traveler out there, but here are a few broad categories for you to consider:
- Airline cobranded: If you live in an airline's hub city, it might be a good idea to grab one of its credit cards. In addition to having a wealth of flights from your hometown, it'll also allow you to enjoy added perks for your future trips. I'm a big fan of the extra award seats made available to holders of the United Explorer Card, while many of my Atlanta-based friends are partial to the Gold Delta SkyMiles® Credit Card from American Express.
- Hotel cobranded: Getting to your child's study abroad location is one thing; where to actually stay once you arrive is an entirely different story. Fortunately, there are many hotel credit cards that would award you enough points for one, two or even three free nights, just via the welcome bonus. My personal favorite is The World of Hyatt Credit Card. New cardmembers earn 25,000 points after you spend $3,000 on purchases in the first three months from account opening, then another 25,000 bonus points after spending $6,000 total within the first six months of account opening. These points are worth $850 based on TPG's valuations and could be redeemed for up to 10 free nights in a Category 1 Hyatt property.
- Transferable: One of the best ways to make the most of your points and miles is via transferable points currencies like Chase Ultimate Rewards and American Express Membership Rewards. This gives you the flexibility to hold onto the points until you find the exact flights you want, then transfer them to a partner program for redemption. Consider the Chase Sapphire Preferred Card in this category; you'll earn 2x points on all travel and dining purchases along with a lucrative welcome bonus and the annual fee will be waived for the first year.
Again, every card will appeal to different parents, so evaluate carefully the benefits of the cards you're considering before pulling the trigger.
Best Cards With No Foreign Transaction Fees
When it comes to credit cards with no foreign transaction fees, there are actually plenty of options. However, we're also lookiing for which cards will allow you to earn valuable rewards and enjoy more travel-related perks. Here are the standouts:
For Parents to Add an Authorized User...
The Platinum Card® from American Express
If you're a frequent traveler and don't already have this card, then you need to get it. One of the advantages of not already having the Platinum is that if you get it now and don't have any other Amex cards, you're welcomed with 75,000 Membership Rewards Points after you spend $5,000 on purchases within the first 6 months of account opening. In addition to the bonus points, you'll also enjoy Centurion and Priority Pass lounge access, Global Entry or TSA rebate (up to $100), 5x points on airfare booked directly with the airline or through American Express Travel and on prepaid hotels booked with American Express Travel, and the ability to transfer MR points to 20 different airlines among other things. This card also comes with no foreign transaction fees (see rates and fees). Enrollment required for select benefits.
This is not a card for students to get on their own. Instead, we recommend parents get it and add their child as an authorized user for $175 (see rates and fees). Why? Because this way you and your child can enjoy all of the benefits that come with the Platinum. After adding an authorized user, your annual fee goes up to $725 ($550 + $175) (see rates and fees) and though that sounds steep, we value the 75k bonus alone at $1,500 based on TPG valuations, which I think helps justify the annual fee even more, since you're now sharing the wealth.
At the least, you'll be able to book your student's ticket with the bonus points. Or you could buy it with cash, earn the 5x on airfare and then use those points to visit your child abroad.
Chase Sapphire Reserve
The CSR is the upgraded version of the Chase Sapphire Preferred, which means students will likely have to ask their parents to add them as an authorized user. Like the Amex cards, Chase charges for authorized users on the Reserve ($75), bringing the total annual fee to $525. With that, you and your authorized user will earn 3x on dining and travel purchases, you'll receive credit for Global Entry and TSA applications (up to $100) and a yearly $300 travel credit. Plus the card has the same broad travel categories as the Sapphire Preferred. Additionally, you'll earn 50,000 bonus points after you spend $4,000 in the first three months from account opening, which TPG values at $1,000.
Capital One VentureOne Rewards Credit Card
The VentureOne card earns 1.25x miles on all spending. Beyond the earning, Capital One rewards users with 20,000 miles after spending $500 on purchases in the first three months of account opening, worth $370 in travel redemptions based on TPG valuations and not provided by the issuer. Additionally, there's no annual fee with this card and you get to enjoy perks like the ability to transfer miles to several travel loyalty programs. If you're a parent willing to add your child as an authorized user, consider upgrading to the Capital One Venture Rewards Credit Card instead, as it offers higher earnings.
More Recommendations: Best Credit Cards with No Foreign Transaction Fees in 2019
Studying abroad can be one of the most enriching experiences of a lifetime. It certainly was for me. If you have a son or daughter getting ready for a semester out of the country, you probably have your work cut out for you. However, one of the easiest things you should do is to open a new travel-rewards credit card. Hopefully the reasons I highlight above prove that!
- Best Credit Cards with No Foreign Transaction Fees in 2019
- Best Credit Cards for Global Entry and TSA PreCheck
- Best Credit Cards for Students and Recent Graduates
- How College Students Can Maximize Travel Rewards Credit Cards
- 5 Credit Cards Every 20 Something Should Consider
- How Your Dorm Decor Can Earn You a Free Flight
Additional reporting by Liz Hund and Sam Lipscomb
For rates and fees of the Amex Platinum, click here.