If you’re an international student coming to the United States on an F1 visa, you probably have a bank or debit card that you use for your daily expenses. But there are several times when you’ll also want and need actual credit — your debit card, even with a credit card logo, is technically just cash. Unlike a bank or debit card, only a proper U.S. credit card offers these six short- and long-term advantages when used responsibly:
- A Credit History
In the U.S. financial system, a credit history is an important part of your economic success, just like steady income and savings. Whenever you pay back money that you borrow, in small or large amounts, you’re building a credit history and your credit score, which is like a financial GPA. That can only help when it’s time to rent an apartment, secure a loan with reasonable terms, buy a car, or sign up for a U.S. smartphone plan. If you have any intention of staying in the U.S. after you graduate, a credit history will be a major advantage for you.
Paying with a credit card, either in person or online, is safer than paying with a debit card. When your debit card is compromised through fraud or compromised payment systems, that card is tied to your cash assets. If you lose cash due to fraud, it can be more difficult to retrieve. It’s much easier to disconnect from a credit card when your card information is compromised. Carrying only a credit card is also preferable to cash in case you’re the victim of an in-person theft. If your card is stolen from you, you can cancel it immediately, often before it can be used.
Some services such as car rentals, hotels, and cell phone companies will request or insist you submit a proper credit card (not a debit card) upon sign up. This is called collateral, which is something of value that can be used as a security deposit. Using a debit card will freeze your funds. Using a credit card for a security deposit helps you avoid losing access to cash.
Tomorrow, a check for $500 will hit your bank account; today, however, you have $0.43. Waiting for a paycheck or a wire transfer can be a frustrating situation that interrupts your life. Use a credit card to pay for everyday expenses like dinner and coffee then pay it off immediately when your cash arrives. This is a good simple way to build credit if you’re not used to paying with credit cards.
- Unexpected Charges
Cell phone plans, bus passes and electronic toll booth readers are just a few items that are subject to unexpected charges. Transportation passes often maintain a balance that is automatically refreshed any time that balance is too low. Given that these charges can happen at any time, you can find yourself unexpectedly without cash. Similarly, your cell phone plan may have overage or repair fees that will be charged to the card you have on file. Using credit means you can manage these payments on your schedule, once a month when you pay your card bill.
Medical expenses, plane tickets, auto repairs — just one of these emergency expenses can wreak havoc on your finances as a student. Using a credit card to pay for an emergency gives you the time and flexibility of a billing cycle to get your finances in order without being at a loss for necessary cash.
We hope this was a valuable introduction to the ways credit cards can benefit international students. Please share with a friend if you found this article useful!
This post is sponsored by SelfScore. SelfScore offers a credit card for international students in the U.S. on F, J, and M visas — no SSN or deposit required. No annual fee. Learn more and start building your financial future in the U.S. today.