Need to Know Tips About Debit and Credit Cards When Studying Abroad

February 06 , 2019

As a tour operator that has worked with thousands of students over the years, we are always shocked at the lack of knowledge about spending abroad by the students studying in Europe. Students are typically unaware of the rates and fees that are being applied by their bank and end up costing them a significant amount of money during the duration of their program.

How can we fix this and help students to protect their money from unnecessary fees and bad exchange rates? By arming them with knowledge in advance of their trip! That’s why we have collected our need to know tips about debit and credit card usage when studying abroad that all students should know before embarking on their journey.

1) Call your bank

First things first, call your bank and find out what they will charge you for using your credit or debit card abroad. Some banks charge a foreign transaction fee which isa percentage of the transaction amount, typically between 1-3 percent of the transaction, but this will vary based on your bank.

In addition to these fees, which can add up over the course of a study abroad program, American banks also will determine the exchange rate that they using to convert your currency. Many banks do not use the current market exchange rate that you would see if you did a quick Google search on “Euro to USD exchange rate.” Find out what exchange rate your bank will be applying to your transactions abroad as this is another mistake many study abroad students make and can accelerate their spending.

Another cost to find out from your bank is whether or not they will charge you to use foreign ATMs to take out cash from your account. This fee is normally no higher than $5 per ATM usage, but again can result in unnecessary costs for students who are on a tight budget.

Finally, once you’ve determined that your bank will be a good option for you to use abroad, inform your bank that you will be traveling and for them to put a travel alert on your account. If you forget this step, you will more than likely confront issues with your card being declined abroad due to suspected fraudulent activity on your account.

2) Consider opening a new checking account

If once you’ve contacted your bank and found out all the information regarding your debit or credit card and you have decided that this card will be too costly to use abroad, there are solutions out there for you to consider that will save you money in the long-run.

We’ve provided a few of our top picks for travel checking accounts and debit cards. What is most important is to do your research in advance and select the best option for you.

Internet or digital banks

No fee checking accounts

4) If possible, use a travel credit card

Not only do we recommend having more than one card in case of emergency or unexpected situations, such as losing your card, we would suggest using a travel credit card when possible. Travel credit cards typically have no foreign transaction fees and provide you with the best market exchange rate possible.

Additionally, credit cards provide additional insurance and fraud protections that many debit cards don’t. This is an added level of security to ensure your money and spending while abroad.

Pro tip: The most commonly accepted credit cards in Europe are Visa and Mastercard, so make sure at least one of your cards is Visa or Mastercard. Although they have have expanded their network in recent years, Discover and American Express are unfortunately not accepted at many locations in Europe, so don’t count on being able to use those cards while you’re abroad.

5) Choose to pay in local currency

“Euro or USD?” If you’ve traveled in Europe before and used a card to pay for your purchase you have more than likely been asked this question and been unsure how to answer.

You should choose to process your transaction in the local currency. The rate your bank uses is almost always better than the one the business converting the currency for you will use.

6) Don’t use a currency exchange

Seriously, please don’t exchange your currency. Instead, take money out of a local bank ATM. The exchange rates offered at currency exchanges will end up costing you a large amount of money, so try to avoid them altogether.

Bottom line? Do your research and make sure you’re informed about how your money is being spent while you’re abroad. Going abroad fully knowing the information on any fees you will need to account for will lead to an easier transition to your study abroad experience.

Sammi DiBacco

Sammi DiBacco