Credit Cards for International Students
While studying outside your home country having a credit card can be helpful. They allow you to start building credit and are great to have in an emergency. Here we’ll tell you how you can benefit from having a credit card and provide you with some information about what to do, and not do with one.
The Benefits of Having a Credit Card
There are many benefits of having a credit card to use while you’re an international student. Here are a few of those benefits:
- You can build good credit: Your credit history will affect your ability to obtain loans for large purchases in the future. If you can build good credit now, you’ll be golden down the road if for example, you buy a car.
- Learn how to use money: While it’s great to have independence, having a credit card comes with a lot of responsibility. It’s a good way to become disciplined with your money.
- Great backup plan: In case of an emergency that requires a purchase you’re otherwise not able to buy, credit cards are great to have on hand.
- Avoid overdrafts: With a debit card, you can easily overdraft your account when paying monthly bills and fees. You can plan to pay these bills with a credit card to avoid an overdraft fee from your bank.
- Perks/rewards: A lot of credit card issuers will provide perks and rewards for using their service.
Challenges for International Students Getting a Credit Card
Getting a credit card can be a difficult process and as an international student, there are more challenges for you to face. You can overcome these challenges, but it’s important to know what they will be before going into the process.
First, you’ll want to take a look at the requirements put in place by the credit issuer. Look at these requirements carefully and thoroughly. The requirements for each credit issuer in the US vary. For example, most credit card companies will require you to provide a social security number but some do not have this requirement. If you hold an F-1 or J-1 visa, you can apply to get a social security number through the Social Security Administration (SSA). This might make the process of obtaining your credit card run a little more smoothly.
Another challenge you may run into is not having a bank account in the US. Before you get a credit card, you may want to open one. Having an account open in the US will make it easier to manage the money you have and to keep track of what you owe. You don’t ever want to lose track of the money you have or the money you owe. Doing so could result in credit card debt.
5 Tips on How to Spend Responsibly
As mentioned before, it’s important to become a responsible spender in order to hold a credit card. Here are five tips you can use to spend responsibly:
- Never spend more than you have: Credit card debt is a big issue in the US. A lot of this is a result of credit card holders spending more than they actually have coming in. Be absolutely certain that you can pay back what you borrow, plus any interest you accrue, before making a purchase.
- Pay the full balance: If you pay the full balance on your card at the end of the month, you’ll avoid paying a lot of interest. Try not to leave a balance on your card for longer than a month, but if you need to, you can often try to negotiate a lower interest rate with your card issuer.
- Sign up for reminders & autopay: Set reminders. You’ve got a lot going on and you’re likely to forget a payment due date once or twice. A lot of credit card issuers will even allow you to enable autopay so that your bill will automatically be paid on its due date.
- Know about perks/rewards: It’s likely that your credit card issuer will provide a lot of perks and rewards for using their service. Know what they are and use them to save money.
- Choose a payment day that works best for you: You’ll want to align your payment day with when you have money and stick to the payment plan. For example, if you have a job, set yourself up to make payments right after you get paid.
Compare Credit Card Companies
Before deciding on a credit card company, make sure you’ve been through all of the options available to you and compared them. Each card issuer will have a different set of requirements and different perks. You want to make sure that you are choosing the best option for you. These companies offer the best credit cards for international students: Discover, Capital One, Bank of America, and Deserve.
Deserve provides international students like you with the opportunity to have a credit card, even if you don't have a social security number or credit history. With the Deserve Edu MasterCard you can count on the following:
- No SSN required for International students
- Amazon Prime Student Membership (get reimbursed for subscription fees up to a lifetime total of $59)
- 1% unlimited cash back on all purchases
- Credit limits up to $5,000
- $0 annual fee & no foreign transaction fees (great when traveling during Spring and Summer break)
- No security deposit or co-signer required
- Helps students build credit history and gain financial independence
- Use anywhere in the world where Mastercard is accepted
- Includes Mastercard Platinum Benefits like Car Rental Collision Damage Waiver, Roadside Assistance, Travel Assistance Services, Price Protection, Extended Warranty and ID Theft Protection
- Complimentary cellphone insurance up to $600
Credit Card Security Threats
All of this information may be exciting to you and you might be ready to start the credit card application process now. However, before jumping into it, you should know about some potential security threats.
Financial fraud happens when your information is breached and someone has access to using your credit card without your permission. This can happen in many different ways. One way your information could be stolen is through the physical card. Let’s say you can’t find your credit card and fear that someone else might have picked it up. Report this to your card issuer right away so that they can block fraudulent activity on the card. They can then provide you with a temporary card while you’re waiting for your new card to arrive.
Another way that your information could be stolen is online. With online shopping becoming the new norm, you should always be careful about where you choose to make purchases from on the web. Trust your judgment. If the website seems suspicious, then you definitely shouldn’t input your credit card information. If you’re not sure if the website is legitimate or not, there are many fraud checkers you can use to help determine the legitimacy of the site.
Your PIN and other important passwords in a safe place away from your card. The last thing you want is for your card and your PIN to be stolen at the same time. You’ll also want to keep your Social Security Number (SSN) top secret. Anyone with access to your SSN can open credit cards in your name, so it’s best to only keep this information to yourself unless you’re required to disclose it. Additionally, be diligent about checking your account for fraud. If fraud should occur, notify your card issuer immediately.
Frequently Asked Questions
Q: What is APR? A: The Annual Percentage Rate (APR) is a yearly charge for borrowing money. This will be a percentage of a loan or credit card balance added on top of what you have to repay. On a credit card, if you make all of your monthly payments on time, you won’t need to worry about APR.
Q: What is a good credit card interest rate for international students? A: It’s hard to determine what a good rate is. You will have to do research and compare the rates of different card issuers. As of December 2019, the average credit card interest rate was 17.30% in the US.
Q: If I don’t use my credit card should I cancel it? A: Generally, no. You should try to avoid canceling your credit card as it could negatively affect your credit score. Simply place it in a secure location and keep building your credit- even if you’re not using your card. You will first want to check with the credit card company to confirm if there are fees for non-use, and don’t forget about any annual fees your card might have.
Q: What can I pay for with my credit card? A: The short answer is pretty much everything. But that doesn’t mean you should. A good rule of thumb with credit cards is to only use it on items you can afford.
Q: Do I need a Social Security Number (SSN) to open a credit card? A: Not necessarily. Most credit card companies will require you to get an SSN to open a credit card account. However, there are some companies, like Deserve, that will allow international students to open one without an SSN. Take a look at the card issuer requirements.