Wednesday, 14 March 2012

International Student Credit Cards

Credit Card Advice for International Students

1. Don’t get a credit card

This is probably the most important thing that I can tell you about credit cards for international students. As a student you probably will have no need for a credit card. Get a check card instead. A check card works similar to a credit card, but when you use a check card, you are actually using money from your bank account, thus spending money that you have. When you use a credit card, you are spending money that you do not have. You will have to pay the balance on your credit card by the end of the month or else pay an interest on the balance. It is also easy to spend more while using a credit card because it is just so tempting to swipe that card and buy on impulse. Believe me, I know…ahem…moving on

2. Get a card with a low interest rate

If you are still reading this, I guess you’ve made up your mind. So if you must get a credit card, the first thing to look at is the interest rate. Get a credit card with a low interest rate. Most credit cards for college students come with high interest rates, since college students do not have established lines of credit. So an annual percentage rate (APR) under 12% is considered good for international college students. A 12% APR means that you would be paying interest at 12% per year. Anything above 16% is too high.

3. Free is always good (or at least in this case)

Sign up for a credit card that has no fees associated with it. Some credit card companies will charge you an annual fee, account set up fee, monthly fee, maintenance fee and every other kind of fee that they can think of. My advice is to stay away from these kinds of credit cards. There are plenty of credit card companies that offer cards with absolutely no charges other than the interest on the balance. These are the credit cards that you should consider.

4. Pay your balance on time

Try to pay off your credit card balance every month. Even if you cannot pay the entire balance, make sure that you make minimum payment and do it on time. Almost all credit cards will charge you a $29 or more fee every time that you are late with a payment. Make your payments late two or more times and your interest rate will go through the roof. This will also be detrimental to your credit score. Therefore, it is extremely important that you make your payments on time, every time.

5. Do not exceed your limit, take cash advances or write credit card checks

Your credit card comes with a spending limit. Do not exceed this limit. Credit card companies charge a fee every time you exceed this limit. And did I mention that it is bad for your credit score.

Credit cards will allow you to withdraw money just like you would do with your checking account at the bank. But you will pay dearly if you decide to withdraw money from your credit card account. These kinds of loans have a much higher interest rate than using your credit card to buy something.

Sometimes, your credit card company will send you checks that you can write against your credit card account. Do not use these checks as they also have a higher interest rate than just using your credit card normally.

That is all the advice that I can give you about using credit cards in the United States as an international student. Again, the best thing to do would be to stay away from credit cards and use your bank check card instead. But if you do decide to get a credit card, use it wisely and spend only as much as you can afford to pay back.

More information

Do you have a story or advice about credit cards that you would like to share with our readers? What is your opinion about the easy access of credit to college students in the United States? Please add your comments below.

1 comment:

  1. I don't have SSN, which bank can give me a credit card ?


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