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Best credit card for American student studying abroad?

geewally 167 106 January 8, 2016 at 11:19 AM in Finance (2)
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Helping my son prepare to study a semester in Italy.
He has a bank account with a debit card associated with it.
He used this previously when traveling abroad and it worked OK.
But it's not a very official looking card (no raised lettering), has some transaction fees, and it builds no credit history.

I'm thinking I'll have him apply for a student credit card.
He will pay it off every month (he has funds set aside for his expenses already).
He has no credit history and made about $9000 last year working part-time and summer job.
He just received an invitation to apply for the Discover Chrome It card.
No annual fee or foreign transaction fees.

This looks to me like a good card for him to start with.

So: Opinions?
Any better way to go?

Also, looks like limit will likely be $500. That may be enough but if he puts a surplus into the account will it allow him to spend more than $500? For instance, if he puts $500 into it to begin could he spend $1000?

Another question: application says he can include in his annual income "scholarships and grants (for living expenses only)." Does this mean any amount that does not go directly to tuition, for instance room and board?

Thanks for the help.

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#2
Hmmm....no help.
By the way, I did some more research and I don't think the Discover card is the way to go.
It is rarely accepted in Italy.
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Quote from geewally View Post :
Hmmm....no help.
By the way, I did some more research and I don't think the Discover card is the way to go.
It is rarely accepted in Italy.
Discover is the way to go. No foreign transaction fees and widely accepted, even in Italy. It's my card of choice outside the US.
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Quote from ghostofposterspast View Post :
Discover is the way to go. No foreign transaction fees and widely accepted, even in Italy. It's my card of choice outside the US.
Seriously? Every forum I've checked says it's dang near impossible to find a place that will accept Discover even in the largest cities.
I asked a relative in Italy who travels for business and they were not familiar with Discover card at all.
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Quote from geewally View Post :
Hmmm....no help.
By the way, I did some more research and I don't think the Discover card is the way to go.
It is rarely accepted in Italy.
Quote from geewally View Post :
Seriously? Every forum I've checked says it's dang near impossible to find a place that will accept Discover even in the largest cities.
I asked a relative in Italy who travels for business and they were not familiar with Discover card at all.

Agree - Discover Card is even worse than American Express as a choice using overseas.


Best to stick with Visa/MC combination that will have no problems - just pick a card with no foreign transaction fees.


Debit Card is also not a great option - foreign transaction fee can kill you. Also, check with your bank to understand the foreign ATM fee. Some charge a very high 3% per withdrawal - best to pick a card like Fidelity Cash Management Debit which does not charge a fee for ATM withdrawals.


Capital One Quicksilver is a great option - 1.5% CB and no foreign transaction fees, but don't know how lenient they are for those with no credit history. If you are willing to open one in your name and get a second card for him, that would be an excellent option.


If you want him to build credit history, check out a site like this to identify options:


http://www.nerdwallet.com/blog/to...edit-card/


My recommendation is to do both: apply for CapOne Quicksilver yourself as a parent and give him a card while also applying for a card himself. That way, if he is rejected, you won't be scrambling last minute. And if he does get his own card, he can also keep your Quicksilver card as backup in case he goes over the limit.


Hope this helps and hope your son enjoys the great opportunity of studying abroad! Where is he is going?
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Quote from megakimcheelove View Post :
Agree - Discover Card is even worse than American Express as a choice using overseas.


Best to stick with Visa/MC combination that will have no problems - just pick a card with no foreign transaction fees.

It looks like things have changed since I spent a few summers in Italy in the early 1980's. Back then it was American Express that was accepted everywhere.
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Thanks megakimcheelove
He's going to Torino, Italy! What a great opportunity for him (and us vicariously!).

Right now I'm looking at the Capital One Journey card for students.
As far as I can see it does not have foreign transaction fees and it is geared towards students so I think he'll have a good shot at being approved albeit with a low credit limit.

I don't think that a low credit limit will be a problem if I'm able to put money towards his credit card early in the monthly cycle and extend his credit limit.
This was one of my original questions.
For instance: if he has a $500 credit limit and he charges $300, can I pay $300 before his payment is due and once the payment goes through he'll be back to be able to spend $500 again?

His debit card from a local credit union only charges 1% foreign transaction fee. His debit card does not have the security chip.
From what I've heard Europe has had the credit cards with chips for a lot longer than the US and they have experienced a lot of fraud with the typical magnetic swipe strips that we use here.

Quote from megakimcheelove View Post :
Agree - Discover Card is even worse than American Express as a choice using overseas.


Best to stick with Visa/MC combination that will have no problems - just pick a card with no foreign transaction fees.


Debit Card is also not a great option - foreign transaction fee can kill you. Also, check with your bank to understand the foreign ATM fee. Some charge a very high 3% per withdrawal - best to pick a card like Fidelity Cash Management Debit which does not charge a fee for ATM withdrawals.


Capital One Quicksilver is a great option - 1.5% CB and no foreign transaction fees, but don't know how lenient they are for those with no credit history. If you are willing to open one in your name and get a second card for him, that would be an excellent option.


If you want him to build credit history, check out a site like this to identify options:


http://www.nerdwallet.com/blog/to...edit-card/


My recommendation is to do both: apply for CapOne Quicksilver yourself as a parent and give him a card while also applying for a card himself. That way, if he is rejected, you won't be scrambling last minute. And if he does get his own card, he can also keep your Quicksilver card as backup in case he goes over the limit.


Hope this helps and hope your son enjoys the great opportunity of studying abroad! Where is he is going?
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Last edited by geewally January 13, 2016 at 09:30 AM
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Quote from geewally View Post :
Seriously? Every forum I've checked says it's dang near impossible to find a place that will accept Discover even in the largest cities.
I asked a relative in Italy who travels for business and they were not familiar with Discover card at all.
It seems you don't know much about Discover and it's brands. Discover owns Diners Club. While Diners Club has all but disappeared in the US, it's still prevalent in Europe. A Discover card works anywhere they accept Diners Club since it's the same card.

https://www.dinersclub.it/
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Quote from megakimcheelove View Post :
Agree - Discover Card is even worse than American Express as a choice using overseas.
Wrong. The only card I use outside the US is Discover. I haven't been denied anywhere in the world in years. Sure, some merchants will look at it and say that they don't take it. I just insist they try. They are surprised that it does work. So this is not a issue of Discover not being accepted, it's a matter of education.

Check this handy map at Discover. Other than in some countries in Africa, Discover is accepted worldwide. I can personally attest to that.

https://www.discover.com/credit-c...l-use.html
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Quote from geewally View Post :
From what I've heard Europe has had the credit cards with chips for a lot longer than the US and they have experienced a lot of fraud with the typical magnetic swipe strips that we use here.
Europe and the rest of the world, have had the chip for years/decades. Make sure you have him set a pin on his CC. The world stopped doing the signature thing the same time they did the chip. So a signature for a CC purchase is unknown to many merchants, particularly outside of tourist areas. It depends on the POS system whether they can take signatures or not. I've had people dig out a dusty carbon imprint system, pre 80's, when they see I have a signature card.
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Quote from geewally View Post :
Thanks megakimcheelove
He's going to Torino, Italy! What a great opportunity for him (and us vicariously!).
Of course, you willl want to be supportive parents and visit him, burdensome as that will be, right? Smilie

Quote from geewally View Post :
For instance: if he has a $500 credit limit and he charges $300, can I pay $300 before his payment is due and once the payment goes through he'll be back to be able to spend $500 again?

Yes, as long as you pay down balances through the month, his line availabiltiy will increase. Just check with Cap One as some card issuers limit the # of payments per cycle allowed.

Quote from geewally View Post :
His debit card from a local credit union only charges 1% foreign transaction fee.


Helpful to highlight that Foreign Transaction fee is different from Foreign ATM fee. The first is for a transaction where Debit Card is used to purchase an item; the latter is for withdrawing money from an ATM.


It is the ATM fee I was cautioning about - it is probably buried very deep in your account disclosures, so I would just call the 800 customer service # to have them confirm. Some issuers do a flat fee, some do a modest 1% rate, but many of the big banks charge an enormous 3% PLUS a fixed fee.


Regardless of the actual fee structure, best strategy is to minimize ATM transactions (which generate fees) by making large withdrawals.
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Ghost
You say
"It seems you don't know much about Discover and it's brands. Discover owns Diners Club. While Diners Club has all but disappeared in the US, it's still prevalent in Europe. A Discover card works anywhere they accept Diners Club since it's the same card."
Well, no kidding! That's why I'm asking for advice.

But I've already checked the links you gave, saw that merchants who accept Diner's Club also accept Discover, and looked at the map where Discover is accepted.

Admittedly I was not knowledgeable about Diner's Club's viability overseas. Most Americans would not think of it as a readily accepted card since it's a dinosaur here.

I don't put any stock in the map saying "Discover is accepted in Italy" since it does not indicate how broadly it is accepted.

I am going on other people's experiences. I suppose when most people are told "We don't take that card" they don't question it. If you've found that the magic phrase is "try it anyway" and it works then you've apparently found the magic key. I would think Discover needs to educate the merchants and not the consumer.
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Quote from ghostofposterspast View Post :
Wrong. The only card I use outside the US is Discover. I haven't been denied anywhere in the world in years. Sure, some merchants will look at it and say that they don't take it. I just insist they try. They are surprised that it does work. So this is not a issue of Discover not being accepted, it's a matter of education.

Check this handy map at Discover. Other than in some countries in Africa, Discover is accepted worldwide. I can personally attest to that.

https://www.discover.com/credit-cards/help-center/account/international-use.html

ghostofposterspast - thank you for sharing your real-world experience. Definitely did not know this - I have had Discover denied overseas, but admit I never tried challenging a merchant on it. Looks like they leveraged the old Diners Club network when they purchased them a few years back, so that is giving them global coverage.


+4 for the helpful info - love it when I learn new things on SD
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Quote from megakimcheelove View Post :
It is the ATM fee I was cautioning about - it is probably buried very deep in your account disclosures, so I would just call the 800 customer service # to have them confirm. Some issuers do a flat fee, some do a modest 1% rate, but many of the big banks charge an enormous 3% PLUS a fixed fee.


Regardless of the actual fee structure, best strategy is to minimize ATM transactions (which generate fees) by making large withdrawals.
Or some don't have any ATM fee at all. I only use cards that have no ATM fee. Now ATMs in some countries, like the US, will charge a fee if you use it with a card that doesn't belong to that bank. This is in addition to the fee your bank changes you for using a "foreign" ATM. But there are also banks that will reimburse any ATM fee you get charged by another bank. The fees really add up if your bank charges you an ATM fee and the ATM charges you a fee too. Mine don't so I don't worry about my ATM transactions at all. I take out the equivalent of $20-$40 per. No need to carry around $500 in cash everytime you hit an ATM with the right banks.
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Quote from megakimcheelove View Post :
ghostofposterspast - thank you for sharing your real-world experience. Definitely did not know this - I have had Discover denied overseas, but admit I never tried challenging a merchant on it. Looks like they leveraged the old Diners Club network when they purchased them a few years back, so that is giving them global coverage.


+4 for the helpful info - love it when I learn new things on SD
Diners Club really only gave them Europe. Unionpay gives them Asia. But even in both places, I do see the little "we take discover" sticker from time to time. The beauty of that, in Japan, using a Unionpay card gets you an instant discount at the register. You just have to convince the merchant that your Discover card is really a Unionpay card. Discover has a handy wallet size card you can print out to explain it all to them. In Japan it's easy to get around 20% off on electronics. Just combine your passport(ex vat) + transit pass + Unionpay. I don't know why they do it, but if you have a tourist transit pass they give you 7% off for that alone. Being Japan, they don't even ask to see it. Who lies in Japan afterall? But yes, I really do have a pass. Why wouldn't I? $5/day for unlimited travel in all of Tokyo. I'd be an idiot not to get one.
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