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As a college student, you should already be familiar with using credit. But even if you’re still using a debit card, a semester abroad can be a great time to make the transition to a credit card. Studying abroad tends to involve a good amount of spending on dining and travel, all while staying within a budget.
Along with the obvious perk of helping you build credit, having a credit card while abroad will help you earn valuable points or cash back. Your cash won’t be held if you need to put down a deposit for a hotel or an Airbnb. Also, credit cards tend to provide fraud and travel protections that your debit card can’t match.
What to Consider
When choosing a credit card to use outside of the US, finding one with no foreign transaction fees is paramount. These fees are usually around 3% per purchase, which could potentially cost you hundreds of dollars and negate any cash back or points you might earn. There are plenty of cards on the market that have no annual fee and no foreign transaction fees, so you shouldn’t need to pay a high fee to find the right card.
The next thing to consider is the fact that many merchants outside of the US don’t accept American Express or Discover, though Discover has been trying to expand its worldwide network. Visa and Mastercard are your best bets, as both are accepted at most merchants that accept credit cards.
It’s also worth finding out whether credit cards are an acceptable means of payment in the city you plan to study in. Berlin, for example, is particularly reliant on cash. But even if many merchants you might visit do not accept any type of credit card, it’s still a good idea to have one on hand.
Note: all of the cards we’ll discuss are in the Visa or Mastercard network and charge no foreign transaction fees.
Studying abroad is the perfect time to get started with your first credit card. Here are some that will provide you with great rewards without putting you in over your head.
The Journey Student Card provides relatively modest rewards when compared to other starter cards, but it’s a great choice for spending while you’re abroad. Not only is it pretty easy to be approved for if you have little to no credit, but you’ll get 1% cash back on all purchases (1.25% when you pay your bill on time, which we recommend). The card is easy to use and charges no annual fee. Plus a semester’s worth of responsible use should set you up nicely to be approved for a more lucrative card when you return home.
Bank of America Travel Rewards for Students card
Another no-annual-fee card that normally approves credit cards for beginners, the Bank of America Travel Rewards for Students card, gives you 1.5 points per dollar on all purchases, along with a 25,000 point sign-up bonus after you spend $1,000 in the first 90 days of account opening. Points, which are worth 1 cent each, can be used to book travel directly on any platform or used as a statement credit toward travel purchases, and BofA defines travel pretty broadly, so you shouldn’t have any problem redeeming your points.
An added bonus of the Travel Rewards for Students card is that you’ll get a 10% point bonus (or more) on every purchase if you’re a current Bank of America customer.
Deserve Edu Mastercard
While definitely not at the top of the list even for beginners, the Deserve Edu Mastercard is specifically geared towards those trying to build credit. You’ll only earn 1% cash back, but you’ll get a year’s worth of Amazon Prime Student for free just by having the card and there’s no annual fee.
A downside to any student credit card is that you won’t usually get a very large credit limit, and the Deserve Edu is notorious for providing extremely low credit limits (sometimes as low as $300, so be wary). If you get stuck with a prohibitively low limit, make sure you have a backup option or pay off your balance often enough to avoid being stuck in a situation where your card gets declined when you really need it.
For Those with Established Credit
Students who might already have a credit card or two should look at some of these more lucrative cards. Some of them carry an annual fee, but they’re also much more rewarding.
While college students might have trouble being approved for the Chase Sapphire Reserve, the Chase Sapphire Preferred is one of the most popular and recommended cards on the market, and it’s easier to get approved. It currently has a sign-up bonus of 60,000 points after you spend $4,000 in the first three months of account opening. Those points are worth $1,200 according to TPG’s current valuations, which is more than enough to offset the annual fee of $95.
This card gives you 2 points per dollar spent on travel and dining, likely two big expense categories for anyone studying abroad. Plus you’ll get 1 point per dollar on all other purchases and great travel protections.
While the points you earn from the CSP are technically redeemable for cash back at a rate of 1 cent per point, you’ll get far more value by keeping your points and using them to book travel, either through the Chase Ultimate Rewards portal or by transferring them to one of Chase’s many transfer partners.
Despite being a premium credit card with a $95 annual fee (waived the first year), students with some credit history tend to have good luck being approved for the Capital One Venture card, making it a great choice for studying abroad. The Venture card offers a 50,000 mile sign-up bonus after you spend $3,000 in the first three months after opening your account. You’ll also earn 2 miles per dollar on all purchases and 10 miles per dollar spent at Hotels.com (when booked and paid with card via Hotels.com/venture). Miles are worth 1 cent apiece when redeemed through Capital One, and you can also transfer them to several transfer partners, though the transfer ratios tend to be 2:1 or 2:1.5, which is less than ideal.
The Uber Visa is a great choice if you’re focused solely on earning flexible cash back. The card has no annual fee and has incredibly generous spending bonus categories. You’ll earn 4% back on dining (including bars), 3% back on airfare and hotels, 2% back on online purchases (including Uber) and 1% back on all other purchases. You’ll also receive $100 in cash back after spending $500 in the first 90 days of account opening. This card also tends to be slightly easier to get approved for and is an ideal pick for going abroad where a large majority of spending tends to be at restaurants, bars and on travel.
Other Things to Consider
For the most part, having and using a credit card abroad is no different than having and using a credit card in the US. That being said, you can take steps to make your experience more fluid.
Once you receive the credit card you’ll be using abroad, make sure to get it set up with Apple Pay or Android Pay. Most credit card-accepting merchants in Europe and Asia accept both, and in addition to being more secure than inserting or swiping your physical card, it’s far more convenient and you’ll avoid having to sign a receipt.
Though the following holds true for debit cards as well, it’s important to remember that if a merchant or ATM asks whether you’d like to be charged in the local currency or in dollars, you should always ask for the local currency. Let your bank do the conversion for you, as the rates they use are often much fairer for you.
Studying abroad should be an exciting and amazing experience. Wherever you end up, you’ll undoubtedly have experiences and form relationships that can last a lifetime. Having and using the right credit card can help you reap tons of rewards, leaving you with a little more cash in your pocket or points you can use for even more travel.
Featured photo by esther driehaus/Unsplash.
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WELCOME OFFER: 60,000 Points Terms Apply.
TPG'S BONUS VALUATION*: $1,200
CARD HIGHLIGHTS: Delta Sky Club and Centurion lounge access, $200 annual airline fee credit and up to $200 in Uber credits annually
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
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