How to swipe and pay for expenses overseas with a Student Credit Card

Read on to know if you should consider getting a student credit card as part of your financial planning for studying abroad.
How to swipe and pay for expenses overseas with a Student Credit Card

How to swipe and pay for expenses overseas with a Student Credit Card

For decades, Indian students have travelled abroad to study and graduate from international universities. This trend is so prevalent, that around 1.3 million Indian students are studying abroad as per recent reports. This number is projected to grow even further, with Indian students’ overseas spending on education to hit $70 billion a year by 2025.

More and more overseas travellers are switching to credit cards for spending given that it is an easy, secure and convenient option. The same applies to students for whom carrying large amounts of cash is not ideal, nor practical.

Read on to know if you should consider getting a student credit card as part of your financial planning for studying abroad.
Pros of Using a Student Credit Card
Such a card allows you to have a single source of spending, allowing for easy tracking of expenses. Most of these cards are accepted in the top student destination countries, making it a top choice for overseas Indian students.

As opposed to the other alternatives such as cash and travellers cheques, cards offer a variety of benefits:

Increased Security Compared to Cash

Carrying large amounts of cash while being new to the city makes you a target for thieves and criminals such as pickpockets. Moreover, if your cash gets stolen, it will most likely be gone forever. Whereas, a card, if stolen or lost, can be easily blocked and replaced by the issuer.

Record of Spending History

Prudent credit usage is a practical way for students to learn how to manage their finances. Monthly bills and interest payments can help you keep your spending on track, analyse your expenses and recalibrate if needed.

Helpful for Building Credit History

Having a robust credit history is instrumental to your financial standing. If you are able to demonstrate regular repayment patterns, you will be more suited to securing funds for future needs, at better interest rates. A clean credit history will simplify a lot of things, including getting a house loan, car loan, and more.

Travel Benefits and Tailored Rewards

Many such cards offer rewards tailored for student spending habits. Moreover, few banks and financial providers offer packages for popular universities and destinations. Look for cards with rewards programs, including cashback, travel miles, and other perks.

Cultivation of Responsible Financial Habits

Being in a new country, figuring out different cost of living patterns, food, language and more all by yourself, is character building. Many times, this is the turning point to adulthood and responsibilities. Tracking your expenses through such a card will help in your daily, weekly, and monthly budgeting, while you form an idea of where to spend and splurge.

Cons of Using a Student Credit Card
While there is a host of benefits to using these cards, here are a few drawbacks worth considering:

Currency Markup Charges

Since these are international network cards issued by Indian providers, there will be a certain markup fee charged on the cards. However, similar forex markup charges also apply and are often higher, when exchanging cash. Students enrolled in 3-year courses or longer can also apply for credit cards from local banks, by building a credit history.

Risk of Credit Card Fraud/Theft

The risk of fraud is very real with such cards. Once fraudsters place that you are inexperienced, they can misuse your card or even steal it. However, there is a way to handle such issues. Cards can be easily cancelled or blocked once you inform your bank or provider. You can also get a new card delivered to you promptly.

Increased Chances of Overspending

Unregulated card use and impulse purchases will lead to hefty bills and penalties if left unpaid. Hence, you should set up and adhere to a strict budget, and regularly review your spending. Moreover, most banks offer the ability to set limits on each mode, such as:

●International point of sale (POS)

●Tap to pay

●e-commerce transactions

Make full use of these to protect yourself from credit card fraud as well as overspending.

Choose the Right Student Card for Your Needs

There are many different student focused cards to pick from. Here are the key points to keep in mind while choosing a card:

Check Exchange Rates and Compare Options

Make sure to compare your eligibility and available credit limits across options. Stay informed about the currency exchange rates of your chosen country, then pick the provider giving you a good rate along with other benefits.

Moreover, cross verify the fees and charges applicable on different modes of international usage to avoid any surprises. Finally, once there, ensure you always pay in the currency of the destination country. This is to avoid incurring additional forex fees.

Enquire About User Benefits

Most cards offer a bundle of value-added services such as loyalty programs, frequent flyer miles, rewards and more. Since these differ based on the financial provider’s tie-ups, ensure you choose a card that best suits your needs.

While such a card is a great everyday tool to control your spending, it is always a good idea to have a contingency plan in place. Stash away a rainy-day fund, safely stored away for emergencies.

With time, you can set up your own checking account with local banks and even start saving. This way, if card networks are down or if your card is stolen, you still have some money to fall back on.

Remember, healthy financial habits are a prerequisite to thrive in a new environment, especially as a student. Prioritising responsible credit use and using it as a budgeting tool, rather than one that enables impulse spending.

Finally, ensure you do enough research and consider all your options thoroughly to select the right card. Start this process well before travelling as you may need certain documents to get the card. Last minute scrambling may lead to you losing out on great bundle offers and deals.

Disclaimer - Brand Impact

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