4 Smart Reasons to Use Your Credit Card While Studying Abroad

Few life experiences are as fun or memorable as studying abroad. Of course, the process can also be a bit daunting if you’ve never traveled to a foreign country before. Using a credit card on your travels has a number of benefits that will let you enjoy your trip without worrying about your finances.

1. Ditch Foreign Transaction Fees

Withdrawing money in another country can be pricey. Every time you withdraw money from an ATM, you will typically be charged $2 – $5. However, many cards charge a fee (1% – 3%) for foreign transactions, too.[1] The best credit cards for foreign travel are those with no foreign transaction fees so you don’t rack up extra charges while spending money.

2. Protect Your Cash

Carrying around a lot of cash while sightseeing is never a great idea. Not only is your money susceptible to theft, there’s always the chance you could simply lose it. And once it’s gone, it’s gone for good.

A credit card is just a piece of plastic, so having it lost or stolen isn’t the end of the world. If your card is stolen, you won’t be held liable for the fraudulent purchases. Plus, many credit card issuers employ EMV technology, which makes using your credit card much more secure.[2] If possible, select a credit card with an EMV chip for adding security and protection.

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3. Earn Miles for Your Next Adventure

Using a rewards credit card can make your daily spending pay off in a big way. Some travel rewards cards, for instance, will pay a percentage of your spending back to you in the form of airline miles.[3] Now that you’re a seasoned traveler, you can use those miles to jet set around the world after graduation.

4. Exchange Rates

Finally, exchange rates on credit cards are the least expensive — personal finance site NerdWallet found that “credit card currency conversion rates were pretty true to form,” and lack the additional markups you’ll often find at ATMs or the airport.[4]

More Tips for Using Your Card Abroad:

  • Alert your issuer: Before heading off on your trip, contact your credit card issuer to let them know when you’re leaving and where you are going. This prevents your card from being frozen due to suspected fraud.
  • Carry a backup: It’s always good to have an extra credit card on hand. Not all cards are accepted everywhere. As a student, you might not have much of a credit history yet, and therefore, have a fairly low credit limit. Additionally, there’s always a chance your card could be flagged for suspicious activity, even if you called your issuer ahead of time.
  • Be wary of exchange fees: It’s not uncommon for some European merchants to charge you for converting their prices to U.S. dollars before running your card. “Dynamic currency conversion”[5] might seem like a perk, but only makes swiping your card more expensive than necessary. Be sure to decline this service and always check that you are paying in the local currency.
  • Track spending: Remember, you have to pay off your credit card bill each month, so don’t spend recklessly. Sign up for online banking and keep tabs on your daily spending so you don’t go over budget.

[1] http://www.nerdwallet.com/blog/banking/debit-card-foreign-transaction-international-atm-fees/

[2] http://www.creditcards.com/credit-card-news/overseas-travel-requires-emv-chip-card-1294.php

[3] http://www.creditcards.com/airline-miles.php

[4] http://www.nerdwallet.com/blog/finance/money-nerd/traveling/exchange-currency-paying-huge-fees/

[5] http://thepointsguy.com/2013/07/just-say-no-to-dynamic-currency-conversion/

Legal Disclaimer: The articles and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. 

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