Reader Question: Which Credit Card For My Daughter Who Is Studying Abroad?

Disclosure: We get a commission for links on the blog. You don’t have to use our links, but we’re very grateful when you do. American Express, Barclaycard, Capital One, Chase, Citibank and US Bank are Million Mile Secrets advertising partners. Opinions expressed here are the author's alone, and have not been reviewed, approved or endorsed by our partners. Here’s our Advertiser Disclosure.

Million Mile Secrets reader Carol writes in:

Our daughter is studying abroad for 1 year in Rome, Italy and I am trying to figure out a way to send her money and a credit card for her to use that has no international transaction fees.  

Any suggestion you may have would be greatly appreciated.  Would it be possible for her to earn mileage or points on a specific card?  She is 20 years of age.

There are three parts to Carol’s question:

  1. Which credit cards have no foreign transaction fees?
  2. Which miles and points credit cards can a 20 year old qualify for?
  3. How to send money to someone abroad?

Why Is a No Foreign Transaction Fee Card Important?

Most US credit cards charge an extra 3% when you use them for transactions in foreign currency.

3% may not seem like a lot, but it adds up.  Let’s say that you’re a student studying abroad who spends, say, $750 per month for 12 months.  That’s $9,000 in spending ($750 per month X 12 months).


Say No to Foreign Transaction Fees!

You will pay $270 in fees if your credit card charges a 3% foreign transaction fee  ($9,000 in annual spending X 3% foreign transaction fee).

You can save the $270 by getting a card which doesn’t charge foreign transaction fees and even earn miles and points!

Credit cards with no international transaction fees

My favorite no-foreign transaction fee card is the Chase Sapphire Preferred because you get double points for travel (airfare, hotel, car rental, parking, etc.) and dining.

If you’re studying abroad for a year, there’s a good chance that you will be spending lots of money on eating out and traveling, so why not get double points for those expenses?

You can transfer points from the Chase Sapphire Preferred to many airline and hotel partners such as Hyatt, United, Southwest etc.

Here’s a link to “Which Credit Cards Do NOT Charge a Foreign Transaction Fee?” if you want to see which other credit cards do not charge a foreign transaction fee.

You can also check out the No Foreign Transaction Fee tab on the Travel Credit Cards page.

No foreign transaction fees

No Foreign Transaction Fees Tab

Some cards like the Chase Hyatt or the Citi Hilton Reserve also have a chip in them which may make them easier to use in certain countries, but in my experience most merchants also accept regular American credit cards without a chip.

Also the American cards with a chip are different from the European cards with a chip, so I wouldn’t go out of my way to get a card with a chip in it.


But Carol’s daughter is unlikely to get approved for the Chase Sapphire Preferred card because she has no other credit cards.

Carol can add her daughter as an authorized user on one of her existing cards (preferably an older card) to build her daughter’s credit history.

Carol’s daughter should also apply for a student credit card, charge a small amount each month, and pay the bill in full to build her credit history.

You can read more about student credit cards in my post Credit Cards for Students With No Credit History.

The Discover Student card does NOT charge a foreign transaction fee.  However, Discover cards aren’t that widely accepted outside the US.

The Journey® Student Rewards from Capital One® could be a better choice because it is a Visa card which is accepted in more places than Discover and it also doesn’t charge foreign transaction fees.

But Carol’s daughter is also likely to get a VERY low limit on her 1st student card which may not be enough for her expenses studying abroad.  So she should have a back-up card as well.

Carol could also apply for a miles and point card with no foreign transaction fees (like the Chase Sapphire Preferred) and add her daughter as an authorized user to that card.  That way her daughter:

  • Is building her credit history
  • Earns miles and points for foreign transaction purchases
  • Has another credit card in case her student credit card is over the limit or a fraud alert prevents her from using it

However, Carol should only add her daughter as an authorized user if she is comfortable that her daughter won’t go on a spending binge with the credit card because Carol is responsible for paying the bill on time!  But Carol will earn the points for the spending on the card.

Carol should also let the bank know that the authorized user is overseas so that there aren’t fraud alerts when the card is used outside the US.


Sending money to someone’s bank account overseas is costly because both the sender and the receiver will have to pay wire transfer fees.

It is less expensive to use your debit card to withdraw money from an ATM abroad.  You should NEVER use a credit card to withdraw money from an ATM because you will pay very high cash advance fees.

However, many banks charge a fee for using an ATM outside the US (in addition to the fee which the ATM owner charges) and often there is a 3% foreign transaction fee added to the withdrawal amount.

The Charles Schwab debit card with the High Yield Investor checking account is the best debit card for using overseas.  There are:

  • No foreign transaction fees
  • No ATM withdrawal fees
  • No minimim balance required

Even better, you get reimbursed for the ATM fees which the ATM owner may charge you.

Don't Pay Foreign Transaction Fees With Your Credit Card

The Charles Schwab Debit Card Is The Best Way To Get Money Outside The US

Carol could open a joint account with her daughter and deposit money in the account in the US.  Her daughter could then withdraw the money with her debit card from an ATM outside the US.  And there wouldn’t be any fees involved!

You can even deposit checks by mail or via a mobile phone app!

Another option is a Bank of America debit card.  Bank of America is part of the Global ATM Alliance, which means that you could be charged no fees for using some ATMs overseas.

But you may still be charged the foreign transaction fees.  I don’t like this option as much as the Charles Schwab option because this applies only in few countries and doesn’t waive all fees.

In Italy, withdrawals on BNL d’Italia ATMs would be free with a Bank of America debit card, but there could still be a foreign transaction fee baked into the exchange rate.


Even WITH a no foreign transaction fee debit or credit card, you could still be charged a 3% fee!

You’ll pay 3% extra even if you have a credit card with no foreign transaction fees, if you choose to be charged in US dollars versus the local currency.

For more details, read Why you should always pay for foreign purchases in the local currency and not US dollars.

Bottom LIne

Unless your child has an established credit history, a miles and points earning card may be out of their reach.  But they can get a basic student card with no foreign transaction fees, though it may have a low limit.

You can also add your child as an authorized user to one of your credit cards with no foreign transaction fees and earn miles and points for your child’s expenses.  But you are also responsible for the bill.

The Charles Schwab bank account is the best way to withdraw money from an ATM with no fees and foreign transaction charges outside the US.

Cards without foreign transaction fees will save you money, but always ask to be billed in the local currency to avoid the currency conversion fee!

* If you liked this post, why don’t you join the 25,000+ readers who have signed-up to receive free blog posts via email (only 1 email per day!) or in an RSS reader …because then you’ll never miss another update!

Editorial Disclaimer: Neither the responses below nor the editorial content on this page are provided or commissioned by the bank advertisers, and have not been reviewed, approved or otherwise endorsed by the bank advertisers. Opinions expressed here are the author’s alone, not those of the bank advertisers. It is not the bank advertisers’ responsibility to ensure all posts and/or questions are answered.

Leave a Reply

Your email address will not be published. Required fields are marked *

14 responses to “Reader Question: Which Credit Card For My Daughter Who Is Studying Abroad?

  1. In regards to the Charles Schwab checking, it claims “This account is linked to a Schwab One brokerage account, with no fees to open or maintain either one” yet when you go to the page for the brokerage account it states “Minimum required to open an account: $1,000” so it sounds like in order to open the checking account, you also have to have $1,000 in a brokerage account, but it isn’t clear. I’ve been using a Capital One 360 (formerly ING Direct) online checking account for years now and have been totally happy with it. Back before interest rates fell to nothing they were offering 2% interest on checking balances, now its closer to .2% which is still double what Schwab offers. They don’t require a brokerage account, but if you want one anyway you can use their Sharebuilder which requires no minimum balance, and for foreign transactions they state “Foreign Transaction. If you use your Card for a foreign transaction (any transaction made in a foreign currency or that MasterCard® classifies as a cross-border transaction), we won’t charge you anything. However, MasterCard may apply a charge for converting the purchase to U.S. Dollars. Please remember to notify us if you are traveling overseas.”

    • @Mike F – When you go to the Charles Schwab brokerage account page and scroll to footnote 2, it says that the $1,000 minimum deposit is waived if you have a High Yield Investor checking account.

      I have the same Capital One 360 account which I opened as an ING Direct account, but I believe that they don’t reimburse ATM fees which could add up for a long stay overseas.

  2. Hi Darius!

    My 14 year old daughter gets targeted offers very often in the mail from all the major credit card companies with very high bonus offers. Although she’s only in high school & has no income (other than babysitting etc), can we include our total household income to apply? Can she even apply at that age? If not, what is the minimum age to get one’s own credit card?

    Thank you!!

  3. What exchange rate will you get when using debit card at foreign ATM? My experience is the rate is a lot worse than the cash exchange rate. Others might feel different.

  4. The Citi ThankYou Premier card has no foreign transaction fees (though it does have an annual fee unless you’re a CitiGold customer), and it ALSO has chip/PIN built into it which makes things MUCH MUCH easier when traveling outside the US.

  5. Schwab ATM card is the way to go for $1000 or less per day. For more, they also have a very good money transfer that charges a very small charge but uses the Visa published exchange rate. (Use their brokerage arm to get info on that, don;t use their banking operation.)

    • @Mary – Applicants under the age of 21 need a co-signor to apply for a credit card. If you’re under 18, you likely won’t be able to get your own card, though you can be added as an authorized user on someone else’s card.

      @Jrey – In my experience, you usually get a much better rate using a debit card from an ATM than converting cash.

      @Andrew G
      – I believe it is Chip and Signature and not a true Chip and Pin card.

      – Good to know. Thanks!

  6. @Mary, does she get Discover It card applications? I get 2-3 of them every week. Never had a discover card and probably never will. My shredder is almost full from all the discover applications they send to me and the rest of my family.

  7. Why not consider Citibank in places that use Citibank? I do global transfers from Citibank Australia (where I work) back to Citibank USA all the time to maintain my Citi HHonors Reserve card. The transfers are instantaneous, though the exchange rates aren’t as good (usually about 3 cents per dollar less than what I see on

  8. I actually got the Schwab debit card right before I studied abroad in southern Africa, and it was great. The exchange rate that I got from withdrawing from ATM’s was miles better than what was offered at cash exchange locations. It was generally the same rate that I got when doing the conversion calculation in Google, sometimes better and sometimes worse. My friends were also quite jealous that I didn’t have to pay the high ATM fees that they were stuck with.

    That said, be aware that Schwab will do a hard pull on your credit report when you apply. If you want to apply for a credit card and get the Schwab debit card simultaneously, definitely apply for the credit card first so that the Schwab pull doesn’t reflect badly on you in the credit application.

    @Darius: Are you sure about needing a cosigner before age 21? I am pretty sure I applied for my first credit card on my own at age 18, to start building my credit history. I think I even got one or two more before I turned 21, and my parents didn’t sign for any of them.

    @Carol: As a recent graduate, I would definitely suggest that your daughter apply for a credit card as soon as possible. When she graduates, having built a history of on-time payments will boost her credit rating immensely. I had to buy a car when I graduated, and having built up a credit score allowed me to get a 0% interest auto loan. Personally, I’d recommend the Citi Forward for Students card. It does charge fees for foreign transactions (so she wouldn’t want to use it while abroad) but on the other hand you can earn about 4% back on purchases from, restaurants and fast food joints.

    So my suggestion is: get the Citi Forward card now for her to use at home, and get the Schwab card afterward for her to use while overseas.

  9. “Sending money to someone’s bank account overseas is costly because both the sender and the receiver will have to pay wire transfer fees.”

    I’ve never heard of a bank in the eurozone that charges a fee to receive money.
    Even to send money fees are rare nowadays.

  10. If anyone’s paying attention:

    1. There IS a Citi Forward card that doesn’t charge foreign transaction fees, but you can ONLY apply in-branch, not online. It’s called the Citi Forward for International Students and has a chip, which will help in Italy.

  11. Pingback: tips & advice [best debit/credit cards] | It's DimSum Time!

  12. Pingback: Major Credit Cards Accepted In Australia | Information and Advice