Best Credit Card for Study Abroad?

“I'm a mother of a soon to be college daughter. My daughter is going to attend college in Singapore…I'm looking for a credit card to pay for her 4 year college tuition ($25,000 a year) and some other costs when she travels. The college accepts Visa and MasterCard. I'm hoping we don't have to pay transaction fees and can earn miles that are accepted by multiple airlines. 

 

My family mainly uses Discover card (>20 years). We also have an Amazon.com Chase Visa as a backup. I know the college doesn't accept Discover card. 

 

I have a credit score of >800. Can you please advise on the best Visa or MasterCard credit cards for my daughter's study abroad in Singapore and travels?”

 

Great question–it touches on topics such as:

• Building a credit score as a student
• Whether paying college tuition with a credit card ever makes sense, given that it nearly always comes with paying transaction fees
• Most rewarding credit cards with no foreign transaction fees
• Best frequent flyer miles for flights to and from Asia

 

 

Often new college students aren't in a position to get their own credit card, plus parents often want to monitor kids' spending initially, to gain confidence that money is being spent responsibly. Hence, the best bet is often making a new college student an authorized user on a parent's travel rewards credit card.

 

Once the college student is ready for his or her own card, she or he may need to work up to a travel rewards card, as most of these require excellent credit. Also see Best College Student Travel Rewards Credit Cards

 

 

Most colleges and universities do charge a transaction fee for credit card payments (see Pay Tution with a Credit Card: Worth It?) but, depending on the fee charged and how you redeem the miles (first class or business class international award tickets can make it worth it), it may still be worth it to you to put all or some of the cost on credit cards. 

 

 

Quite a few Visa and MasterCard credit cards have no foreign transaction fees, although the only AMEX cards that have no foreign transaction fees are AMEX Platinum cards, which aren't relevant for Tina anyway since the Singapore University (as with most universities) doesn't accept American Express. 

 

This also means that AMEX Membership Rewards points and SPG points aren't an option, which are the two other main transferable points currencies, apart from Chase Ultimate Rewards points.

 

A good overall travel card with no foreign transaction fees is the Chase Sapphire Preferred, since it offers 2X points for travel and dining spend. With the 7% annual points dividend, that's an effective 2.14x points on travel and dining spend. Ultimate Rewards points can be transferred to United MileagePlus (although keep in mind United miles and by extension Chase Ultimate Rewards points are worth less after the United Award Chart Devaluation), Korean Air, British Airways and Virgin Atlantic, in terms of international frequent flyer programs.

 

The Barclays Arrival Card earns “miles” but can best be thought of as a travel cash back card, because the points are used to refund travel expenses, and aren't transferable to frequent flyer programs. That means it's a good complementary card to cards such as the Chase Sapphire Preferred and other frequent flyer credit cards, because the Barclays Arrival can be used to pay fuel surcharges and taxes, low cost carrier flights, and other foreign travel expenses, earning an effective 2.2% cash back when redeemed for these travel charges. See Barclays Arrival Card: Top 10 Tips to Maximize Rewards from the 40,000 Bonus.

 

Also see Best No Foreign Transaction Fee Credit Cards for other options.

Right now, I'd have to say that AAdvantage miles provide especially good value for award flights to/from Singapore (since this is part of US Air's South and Central Asia region, which is more expensive than North Asia). With AAdvantage miles, you'd pay 110,000 miles roundtrip for Business Class, or 135,000 miles roundtrip for First Class. 

 

With United miles (or Ultimate Rewards points) business class to Asia on Star Alliance partners is 160,000 miles roundtrip for Business Class, and a startling 260,000 miles roundtrip for first class on Star Alliance partners.

 

My recommendation for this reader would be to:

1. Earn 100K-200K AA Miles: Leverage her daughter's tuition expense to meet minimum spend for the 100K Citi Executive AAdvantage card, or even for a couple of these cards, if her husband also applies and the Singaporean university is willing to break up the expense (or the tuition is charged in installments)

 

2. Also Apply for the Chase Sapphire Preferred and/or Barclays Arrival Card: For ongoing spend, I wouldn't necessarily recommend the Citi Executive AAdvantage card, even though it doesn't charge foreign transaction fees, because it only bonuses spend on American Airlines. Instead, it makes more sense for her daughter to use a card that bonuses travel and dining, such as the Chase Sapphire Preferred, or provides an effective 2.2% cash back when redeemed for travel expenses, such as the Barclays Arrival.

 

3. Make the College Student an Authorized User: It's probably simplest to make her daughter an authorized user on just one card, such as the Chase Sapphire Preferred or Barclays Arrival Card, depending on what this reader applies for in 2) above.

 

What do you think are the best credit cards for studying abroad?

Best College Student Travel Rewards Credit Cards

Understanding How Your Credit Score Works to Maximize Credit Card Rewards

How Does Adding an Authorized User Affect My Credit Score and That of the Authorized User?

Best No Foreign Transaction Fee Credit Cards

 

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