Credit cards are payment cards that resemble debit cards, although their mode of operation is different from debit cards. They allow you to borrow money from your issuer. Credit cards debts revolve in that once you pay your current debt at the end of the month, you can borrow again to carry out your transaction activities. Later, we shall check on the best credit card for international students.
International students are those coming from other countries to further their education. Since they do not possess most documents accepted by banks within the country, they may find it difficult to access financial services. Getting a credit card can help them carry out various transaction activities such as buying goods and services, withdrawing money at ATMs, and other transactions.
Credit card debts are forms of loans and therefore come with interest. Every time you repay your debt, you have to pay it with some interest. Different issuers charge different rates for their cards. Therefore, that is one thing you should check when applying for a credit card. Otherwise, you may pay so much money after the end of every billing circle.
What are the various types of credit cards?
We have two main types of credit cards. They include secured and unsecured cards. Secured credit cards require you to have a security deposit when getting them. That means you have to deposit specific amounts of money to get them. Some secured credit cards do not have specific minimum deposit amounts to get them. You deposit what you feel is suitable for your case.
You need to know that you can get a secured credit card for rebuilding credit. That is the primary purpose of a secured credit card. The deposit you provide ensures that if you cannot repay your debt, your issuer will use the deposit amount to repay your borrowed funds.
Unsecured credit cards don’t require a security deposit to get them. The issuers rely on your records of loan repayment. That means you must have a borrowing history to get such a card. If you have a borrowing history, you have credit scores, also called FICO scores. The more the scores, the better cards you get and vice versa. We have credit cards for bad, fair, good, and excellent scores. Bad credit cards have low credit limits and high-interest rates, while the ones with excellent scores have high borrowing limits and low-interest rates.
How to apply for a credit card?
To apply for a credit card, you can visit the issuer’s branch and apply. You can get approved for a credit card with no credit if you apply for a secured card. However, you will need to deposit money in your checking account to act as security. Your issuer will then lock the funds and issue you the card with a limit corresponding to the security deposit amount. You will then need to activate the card at the store before leaving. Some financial companies usually issue the card after several days, while others can give your card the same day you apply.
You need to know that the deposit you provide when getting the secured card is still your money. Once you attain good scores to get an unsecured card, your issuer will unlock the funds for you to start using them.
Your issuer must run a hard inquiry for fair-excellent unsecured cards, also called a hard inquiry, when you apply for a credit card. They get your scores from the credit bureaus, the bodies entrusted with keeping the borrowers’ information for use when necessary. The same institutions also compile credit reports for reported borrowers. Once they get your FICO scores, they give you any of the cards that go with your scores. You can choose the cards that please you as long as they correspond to your scores.
Remember that you can apply for credit cards online when logging into the issuers’ websites. Online account application is easy as once you submit your details, you wait for your card in your mail, activate it, and start using it. Above all, if looking for guaranteed approval for unsecured credit cards, you can apply for bad credit cards. The issuers do not bother contacting a hard inquiry since they already know you have bad scores.
How to use a credit card?
There are various ways you can use your credit card. They include the following.
i) Buy goods and services.
The primary use of a credit card is to buy goods and services from various stores and service centers. Some issuers even give you rewards when you purchase your goods and services at particular stores.
ii) Withdraw money
Even though it is not recommended due to high fees from the issuer, credit cards allow you to withdraw money from ATMs. You follow the steps that you use when withdrawing money using debit cards.
You can also withdraw money over the counter from a bank. Also, just as it is with withdrawing money over the counter, there are fees you will pay due to using the cash advance feature. Usually, financial companies charge up to 5% cash advance fees.
iii) Improve your scores
Secured and unsecured cards help you to improve your scores. As I mentioned earlier, secured credit cards are the best for building scores, especially if building from scratch. The card issuers report your card usage every month. In our case, secured cards are the best credit cards for students with bad credit to help them build their scores without spending much.
What is the best credit card for an international student?
Various credit cards are suitable for international students. They include the following.
i) Journey Student Rewards from Capital One
The card gives you a 1.25% cashback when you pay the monthly bills on time. You also earn 1% cashback on all your purchases. It accepts applicants with fair credit and limited borrowing history. The card has no annual fees. Another advantage of using the card is that you can earn $5 per month for 12 months on individual streaming subscriptions when you pay on time. The card’s APR on purchases is 26.99% which is Variable.
The APR is 26.99% Variable for balance transfers with a $0 fee for the transfer APR. The foreign transaction fee is $0. You will benefit from $0 fraud liability if you lose your card.
ii) Discover it® Student chrome
The card accepts applicants with fair credit and limited borrowing history. It has no annual fees. The card gives you an Unlimited Cashback Match from Discover that will automatically match all the cash back you have earned at the end of your first year. Therefore, you can turn $50 cashback into $100 or $100 into $200, and so on.
The card also earns you a 2% cashback at Gas Stations and Restaurants up to $1,000 in combined purchases every quarter. Also, you automatically get unlimited 1% cashback on all other purchases. The card offers you a 0% intro APR for six months and a 12.99% – 21.99% Variable APR afterward.
iii) Bank of America® Travel Rewards Credit Card for Students
Another fantastic card you can have for your transaction as a student is the Bank of America® Travel Rewards Credit Card for Students. The card accepts fair scores and limited borrowing history. It has no annual fees, and you can earn 3 points for every dollar you spend in net purchases at the Bank of America Travel Center, plus 1.5 points for every dollar you spend on all other purchases.
There is no limit to the total number of points you can get, which don’t expire. For your information, the cards give you 0% intro APR for 15 months and 13.99% – 23.99% APR, which is variable after that. You can get an APR of 13.99% – 23.99%, which is variable.
iv) Deserve® EDU Mastercard for Students
The card has no annual fees, and therefore, you can save big at the end of the year. The card requires excellent, good, and fair credit with a bit of history. You can receive one year of Amazon Prime Student on Deserving when you spend $500 in the first three billing cycles with the card.
You also earn 1% cashback on all purchases using the card. Automatically start you earning cashback as soon as you are approved. You will be able to get an 18.74% Variable. Unfortunately, the card does not allow balance transfers.
v) Capital One Platinum Secured Credit Card
If you want a card to build your scores, you can use the Capital One Platinum Secured Credit Card. The card accepts fair credit and limited borrowing history and gives you a 26.99% variable. There are no monthly or annual fees.
A credit card allows one to borrow finances from their issuer. There are two main types of credit cards which include secured and unsecured ones. Secured credit cards require a security deposit, while unsecured ones require a borrowing history. You should check on the APR, fees, and borrowing limits when getting a credit card. You can use a credit card to build credit, buy goods and services or withdraw money.