Having a sense of monetary security is extremely essential whenever you plan to study abroad. The thought of residing in a different country carries ample stress. However, if you have a credit card, it will greatly reduce major financial stress and you can also avail of its benefits like payments online, complete faster transactions, and earning reward points. Read this blog for detailed information about the use and importance of a credit card for international students.
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Perks of Owning a Credit Card
Here are a few benefits of having a credit card for international students:
- Builds credit overtime: By maintaining your credit history record, you can obtain loans on large purchases and. Repaying your credit bills on time helps the bank lender be aware of your ability and proves your creditworthiness. A good record can help you avail of the benefits of buying a car, house, etc. by easily applying for loans.
- Money is disciplined: Using a credit card pushes you to maintain a record of your money spent and helps you abstain from unnecessary expenses. Along with being independent, you also learn to be responsible.
- Backup for emergencies: A credit card is extremely beneficial for emergency situations and instant purchases.
- Avoid overdraft: By planning your money in your account, keeping a check on the balance, setting alerts for low balances, you can avoid the overdraft fees from banks.
Challenges of Owning a Credit Card
Being an international student and applying for a credit card is a tough process. It is important to understand the procedure and its features accurately before applying for a credit card. Check the annual fees and interest rates. The requirements of each credit card vary and you need to check them for every issuer. For example – Having a social security number (SSN) – a nine-digit number that is only assigned to U.S. residents and citizens by the U.S. government- is important as it makes the procedure run smoothly. International students have to apply to get an SSN through the Social Security Administration (SSA). The number is used by the government to maintain a track of each person’s earnings and years of work.
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Tips for Spending Money Wisely
- Choose schemes that work best for you: Before choosing a credit card service, do your research and find out which payment day works best for you. Check your payday and align your payment day accordingly.
- Keep a budget: Setting a budget might seem a little extra work but it surely pays off. Set up a budget on how much you earn, what are your essential expenses, where do you spend on luxury items, and categorize each item accordingly.
- Track your spending: Track your expenses by recording and checking bills every time you buy something. Collect bills and check which expenditure was important. Search for cheaper alternatives for your large purchases. When comparing, you will find our many retailers are ready to offer you a ‘sweetener’.
- Avoid unnecessary expenses: Abstain from ‘impulse buying’. Discipline yourself to think over major expenses and talk it out whenever you feel you’re giving into any expensive purchases.
- Pay the complete balance: An important step is to always pay the complete balance due to avoid paying a lot of interest. Even if you are going through a crunch, negotiate with your credit card dealer and pay the complete amount by the end of every month.
Compare Credit Card Companies
There are many credit card companies in the USA that offer international students. You can compare their perks and choose which works best for you:
- Deserve Edu
- Bank of America
- Capital One Journey Student Credit Card
- Capital One Platinum Credit Card
- Wells Fargo Secured Credit Card
- Capital One Quicksilver Card
- Primor Secured Visa Gold Card
Credit Card Security Threats
With all the conveniences and perks, pwning a credit card also invites a few threats/risks.
- Financial Fraud: A fraud occurs when your information is breached with someone else having access to your credit card. If someone steals your credit card and uses the number, they can make purchases without your authorization. It will increase your balance and the company will hold you responsible.
- Identity Theft: This type of theft occurs when your information gets stolen online. Almost every transaction is made through an online medium nowadays. Being connected to sensitive and personal information, stealing your information from your credit card is easy for illegitimate use.
- Unauthorized Charges: Unauthorized charges can be charged by shady or illegal companies. They can intentionally double the amount or charge an expensive price.
Must Read: How to Get an Educational Loan for Studying Abroad?
Having read the risks, it is crucial you use your credit card safely and sincerely.
- Do not ever share your PIN, credit card, or CVV number with anyone. Keep your SSN also to yourself. Be careful while using your password in public places.
- While making online transactions or purchases, make sure you check if the website can be trusted and is secure
- If you find out that your credit card is stolen, immediately file a complaint and report the incident to your issuer. This will temporarily block your credit card until a new one arrives.
Hope this blog helped you understand the details and risks of credit cards for international students. If you are planning to study abroad and need assistance, reach out to our experts at Leverage Edu for the best guidance. Sign up for a free counselling session today!