How to Refinance a Student Loan: Options for International Borrowers

September 28th, 2023 by IEFA

Refinancing your international student loans can be a game-changer in managing your student loan debt more efficiently and potentially reducing the amount of interest you pay by thousands of dollars. But, what are the steps to refinance, and what challenges do international students face in this process? In this blog post, we’ll uncover the benefits of refinancing for international borrowers, discuss the challenges and provide actionable steps on how to refinance a student loan, helping you take control of your financial future.

Key takeaways

  • Refinancing student loans can provide international students with better loan terms and help reduce the amount they pay in fees and interest.
  • International students must consider credit score, repayment terms, lender fees and eligibility requirements before refinancing.
  • Students can find lenders with competitive interest rates and build a U.S. credit history when they make timely payments.

Contents:

Understanding student loan refinancing

International student loan refinancing challenges

Eligibility requirements for refinancing student loans

Steps to refinance your international student loan

Top lenders for international student loan refinancing

Building your credit history in the U.S.

Additional options for international borrowers

Frequently asked questions

Understanding student loan refinancing

When you refinance your student loans, you secure a new loan from a lender to settle your current student loan debt. This new loan comes with different terms such as lower interest rates or reduced monthly payments, which could reduce the amount you pay over the life of the loan and potentially help you get out of debt faster. It’s an excellent solution for international students who want to change the terms of their international student loan and take advantage of better loan terms.

However, refinancing isn’t a one-size-fits-all solution. Before embarking on the process, you need to evaluate your financial situation, compare lenders and offers and familiarize yourself with eligibility requirements. The good news is there are excellent lenders like MPOWER Financing, SoFi and Citizens Bank that specialize in international student loan refinancing.

What is refinancing?

Refinancing is the process of obtaining a new loan to pay off an existing one, often with the goal of securing a lower interest rate or reducing monthly payments. For international students, refinancing can be an opportunity to release a cosigner and consolidate multiple loans into one, making it easier to keep track of payments and manage your finances.

Building a solid credit score in the U.S. may enable you to qualify for better rates on refinanced loans, thus reducing the amount you pay in interest every month. Keep in mind that not all lenders provide student loan refinancing for international students, so it’s essential to research and understand your options.

How refinancing works

Refinancing student loans involves a new lender paying off your existing loan(s) with a new loan. Your new loan will have different terms and a potentially more favorable interest rate. When you’re thinking about refinancing your student loans, it’s crucial to carefully examine the new interest rate, repayment terms and any fees the new lender might charge. By doing so, you can ensure refinancing is the best move for your financial future.

International student loan refinancing challenges

Refinancing international student loans comes with a unique set of challenges. Many lenders may not offer refinancing options for international students or may have stringent requirements making it difficult for them to qualify.

Limited credit history

A significant challenge faced by international students when attempting to refinance their student loans is having a limited or nonexistent U.S. credit history. Most lenders rely on credit histories and scores to make underwriting decisions, which can make it difficult for international students to get approved for refinancing.

Nonetheless, if you start building a U.S. credit history now, you can enhance your chances of refinancing in the future and qualify for superior loan terms. Most U.S. lenders report payment history to credit bureaus, and you can develop a credit history by:

  • Opening a secured or unsecured credit card account.
  • Financing a larger purchase, such as a car or an appliance.
  • Making timely payments.

Temporary visa status

Temporary visa status can also pose a challenge for international students when refinancing their student loans. Not all lenders have the ability to service and collect on loans internationally, and they may not be able to approve noncitizens on temporary visas, making it more difficult to find refinancing options.

Eligibility requirements for refinancing student loans

To qualify for student loan refinancing, you typically need to meet certain eligibility requirements, such as:

  • Having a history of making debt payments on time.
  • Having a steady income.
  • Having a low debt-to-income ratio.
  • Having good or excellent credit.

Understanding these requirements in depth and evaluating your financial status are crucial to determine if refinancing is a viable option for you.

Stable employment and income

Having stable employment and income is a key factor when it comes to student loan refinancing. Lenders want to ensure you have the means to repay the loan, so they require proof of steady income and employment. By providing pay stubs, tax returns and bank statements, you can demonstrate your financial stability and increase your chances of approval for refinancing.

Building a strong credit history in the U.S. can also improve your chances of qualifying for better refinancing terms and interest rates.

Debt-to-income ratio

Another important factor in determining your eligibility for refinancing is your debt-to-income ratio. This ratio compares your monthly debt payments to your gross monthly income and is calculated by dividing your total monthly debt payments by your gross monthly income.

A debt-to-income ratio of less than 43% is considered optimal for refinancing, as it indicates you have a manageable debt load and are more likely to be approved for refinancing.

Good credit score

A good credit score is essential for qualifying for better loan terms and interest rates when refinancing your student loans. Most lenders require a minimum credit score of 690 to refinance a student loan.

Steps to refinance your international student loan

Refinancing your international student loan involves following a series of steps to ensure a successful application and approval process. These steps include:

  1. Assessing your financial situation.
  2. Comparing lenders and offers.
  3. Preparing necessary documentation.
  4. Submitting your application.
  5. Monitoring progress.

Assess your financial situation

Before embarking on the refinancing process, it is vital to evaluate your financial status to decide if refinancing aligns with your needs. This involves taking a close look at your current income, debt-to-income ratio and credit score to get a comprehensive overview of your financial health.

By evaluating your current financial picture, you can determine if you qualify for a lower interest rate or lower monthly payments and understand the potential savings and benefits of refinancing.

Compare lenders and offers

After evaluating your financial status, the next step involves comparing different lenders and their offers to identify the most optimal refinancing option. This involves researching and evaluating the interest rates, repayment terms and other features of different lenders.

By comparing these factors, you can make an informed decision about which lender and refinancing option is most suitable for your financial situation and goals.

Prepare necessary documentation

Once you’ve selected the most suitable lender and refinancing option, the next move is to compile the requisite documentation for your application. This may include:

  • Recent pay stubs or proof of employment.
  • Tax documents.
  • Valid identification documents.
  • Loan statements.

Having all of this documentation readily available will make the application process smoother and increase your chances of approval.

Submit your application and monitor progress

The final step in the refinancing journey involves:

  1. Submitting your application.
  2. Tracking its progress.
  3. Proactively communicating with the lender.
  4. Providing any additional information or documentation they may require.

Staying on top of your application and maintaining open communication with the lender will help ensure a successful refinancing process and potentially save you time and money in the long run.

Top lenders for international student loan refinancing

Several leading student loan refinance lenders offer options to refinance international student loans specifically designed for international borrowers. These lenders include MPOWER Financing, SoFi and Citizens Bank, each of which has unique offerings and eligibility requirements for international student loan refinancing.

By evaluating these leading lenders, you can discover the ideal refinancing option that aligns with your unique circumstances and requirements.

MPOWER Financing

MPOWER Financing specializes in providing loans specifically tailored for international students, as well as refinancing options to help you reach your financial goals. Their services include:

  • Loans specifically designed for international students.
  • Refinancing options with competitive APRs.
  • Eligibility requirements that can help international students reach their goals more easily.

MPOWER Financing is an excellent option for international students who may not have a U.S. credit history or a U.S. citizen cosigner.

SoFi

SoFi is a personal finance company that provides a range of financial products and services, including:

  • Student loan refinancing options for nonpermanent resident aliens, U.S. citizens and permanent residents.
  • Competitive interest rates.
  • A variety of refinancing options to suit your needs.

In addition to refinancing, SoFi provides free financial advice from a certified financial planner and free career coaching, helping you take control of your financial future.

Citizens Bank

Citizens Bank is another lender that offers refinancing options for international students. Their refinancing options come with:

  • Competitive interest rates.
  • The freedom to choose your repayment terms.

These features make Citizens Bank an attractive option for international students looking to refinance their student loans.

We must note that refinanced loans from Citizens Bank do not qualify for the formal forbearance policy – a critical point to remember.

Building your credit history in the U.S.

Establishing a strong U.S. credit history is crucial for international students who want to improve their chances of approval for refinancing. Building credit in the U.S. involves:

  • Using secured credit cards.
  • Making timely bill payments.
  • Monitoring your credit report to ensure your credit history accurately reflects your financial behavior.

Adopting these measures can elevate your credit score and enhance your financial position, simplifying the process of qualifying for refinancing and potentially enabling access to better loan terms.

Secured credit cards

One way for international students to establish a credit history in the U.S. is by using secured credit cards. Secured credit cards require a cash security deposit, which acts as collateral and reduces the risk for the lender.

By using these cards responsibly and making on-time payments, international students can demonstrate their creditworthiness and build a positive credit history in the U.S. This, in turn, can help them qualify in the future for other types of credit, such as student loan refinancing.

Timely bill payments

Paying bills on time is another essential component in building a strong credit history and improving credit scores. Consistently making timely bill payments demonstrates to lenders that you are responsible with your finances, which can help you build a strong credit history.

You can ensure timely bill payments by setting up automatic payments, setting reminders and budgeting for bills, which will help you stay on top of your finances and avoid late fees.

Monitoring your credit report

Regularly monitoring your credit report is crucial in building and maintaining a strong credit history. By keeping an eye on your credit report, you can spot errors, identify areas for improvement and track your progress in building credit.

If you find any errors in your credit report, you should dispute them with the appropriate credit bureaus to ensure your credit history accurately reflects your financial behavior.

Additional options for international borrowers

Alternative financing solutions are available for international borrowers who might not meet the qualifications for conventional refinancing options. Exploring these additional options can help you find the most suitable solution for your unique needs and financial circumstances.

Personal loans

Personal loans can be a viable option for international borrowers looking to pay off their private student loans with a more favorable interest rate. These loans are typically provided by banks, credit unions or online lenders and can be used for various purposes, including paying off student loans.

To qualify for a personal loan, you typically need a reliable source of income, a healthy debt-to-income ratio and good credit, but the exact requirements may be different from a dedicated refinancing product. By comparing personal loan offers and carefully evaluating interest rates and repayment terms, you can determine if a personal loan is a suitable alternative to refinancing your student loans.

Family or friend loans

Borrowing from family or friends may be an option if you are unable to qualify for traditional refinancing solutions. While this option can provide you with the funds you need, it’s essential to establish clear written terms and repayment plans to avoid potential financial and relationship complications.

By setting a repayment plan, interest rate and any other relevant terms upfront, you can ensure a successful family or friend loan that benefits and protects both you and the lender.

Summary

Refinancing your international student loans can be a powerful tool in managing your student loan debt and potentially reducing the amount of interest you pay by thousands of dollars over the life of the loan. By understanding the benefits, challenges and steps involved in the refinancing process, and considering top lenders like MPOWER Financing, SoFi and Citizens Bank, you can take control of your financial future. As you navigate the world of refinancing, remember to explore all available options, including building a U.S. credit history, enlisting a co-signer and considering alternative financing solutions, to find the best refinancing solution for your unique needs.

Frequently asked questions

Is it hard to get student loans refinanced?

Getting student loans refinanced is not easy, as you typically need good credit and a steady income to qualify. Requirements vary by lender, but a minimum credit score and a strong debt-to-income ratio are generally needed. Prequalifying is the best way to determine eligibility.

How does refinancing a student loan work?

Refinancing your student loans is simple: you take out a new loan with better terms to repay your existing loan in full, allowing you to pay less over time or have smaller monthly payments. This can be a great way to reduce the amount you pay each month and make your student loan payments more manageable. It’s important to do your research and compare lenders to make sure you’re getting the best deal.

How much money do you need to make to refinance student loans?

It varies by lender. If you’re looking to refinance student loans, you’ll need to research what the lender’s income requirements are to qualify.

Can I refinance my student loan with a cosigner?

Yes, you can refinance your student loan with a cosigner. A cosigner should have a good credit score and steady income in order to strengthen your loan application. However, one of the best reasons to refinance is to release a cosigner from their responsibility on your existing loan or loans.

What is student loan refinancing, and why is it beneficial for international students?

Student loan refinancing can be a great option for international students, as it allows them to improve on the terms of their existing loan and potentially reduce the amount they pay in interest over the course of the loan. It involves obtaining a new loan with better terms, such as lower interest rates or reduced monthly payments, to pay off an existing student loan debt.


Exploring Different Credit Card Options for International Students in the U.S.

March 22nd, 2023 by IEFA

The overall process of obtaining a credit card as a non-citizen in the United States can appear daunting, especially without a Social Security number. However, international students can get credit with credit cards without needing social security information. Here, we’ll provide more on different credit card options for non-citizen students in the U.S.

The key to acquiring student credit cards in the U.S. is knowing which cards you’re eligible for and understanding their requirements. Before we look at the different international student credit cards available, let’s look at the challenges non-citizen students face when getting a credit card!

Challenges to Overcome When Acquiring a Credit Card

First, you need to look at the requirements set by the credit issuer carefully and thoroughly because the requirements for each credit issuer vary. For instance, most credit companies in the U.S. require a social security number, whereas others waive this requirement. Holders of F-1 or J-1 visas can apply for a social security number via the Social Security Administration (SSA) to ease the process of acquiring a credit card.

Another challenge international students encounter is the need for a bank account in the U.S. Before getting a credit card, you need to open an account. Obtaining a bank account in the U.S. makes it easier to manage and keep track of personal finances. For example, you can easily monitor what you have and what you owe.

Let’s dive in!

Best Credit Card Companies for International Students

Non-citizen students pursuing higher education in the U.S. can get credit cards without a Social Security number or extended credit history from the card issuers. Below are credit card options you can consider:

Deserve EDU Mastercard

The Deserve EDU Mastercard is an excellent option for students because it doesn’t require applicants to provide a Social Security Number. The credit card is best for Amazon Prime benefits, and other perks such as:

  • Up to US$59 in Amazon Prime Student subscription reimbursement upon spending $500 on your card in three billing cycles of account opening
  • 1% back in rewards for each dollar spent
  • No foreign transaction fees
  • No security deposit
  • No annual fee
  • 20.99% variable APR

Generally, the Deserve EDU Mastercard for students won’t charge any security deposit or annual fee. In addition to the benefits mentioned above, students are also eligible for US$30 in rewards for every referral.

Petal-2 Visa Credit Card

International students can acquire a Petal-2 visa credit card from WebBank. You can apply for a credit card without a Social Security number. However, you must provide an Individual Taxpayer Identification Number (ITIN). ITIN is a federal income tax reporting requirement for non-citizens and international students.

International students with ITIN can apply for Petal-2 Visa Credit Card and begin earning 1% back on total spending. Continued use of the card increases the cash back to 1.25 percent in six months and 1.5% after 12 months of on-time payments.

Petal-2 visa credit card comes with a minimum credit limit of US$300 up to US$10,000, depending on creditworthiness. The credit card is user-friendly as it doesn’t charge an annual or foreign transaction fee. Above that, the company has a mobile app that allows you to pay on the go and keep track of your spending. Petal-e visa credit card is best for a flat cash back reward.

Why consider this credit card:

  • 15.24% to 29.24% variable APR
  • No security deposit needed
  • 1-1.5% cash back on transactions upon making on-time payments
  • 2-10% cash back at select merchants

Capital One Quicksilver Student Cash Rewards Credit Card

Are you looking for a credit card for your everyday spending? Look no further than Capital One Quicksilver student cash rewards offering enticing 1.5% cash back on all everyday purchases. The credit card launched in August 2021, and international students can apply with an ITIN rather than using a Social Security Number. In addition, credit cards are accessible for students with fair credit bureaus.

The Capital One Quicksilver Student Cash Rewards offers one of the most competitive reward rates on the student credit card. Cardholders are eligible to earn a flat 1.5% cash back. You can choose varying options in which you prefer to receive your cash back rewards. Options available include gift cards, checks, statement credits, or applying rewards directly to new purchases.

Why choose it:

  • 16.49% to 26.49% variable APR
  • No foreign transaction fees
  • No annual fee
  • Unlimited 1.5% cash back on daily purchases

Capital One SavorOne Student Cash Rewards Credit Card

The Capital One SavorOne Cash back reward launched in August 2021 and is an excellent option for students seeking to incorporate credit cards in dining and entertainment. International students can acquire a credit card with an ITIN.

The credit card offers 3% cash back on select categories, including entertainment, streaming services, dining, and grocery stores (excluding Walmart and Target).

Apart from rewards from select merchants, the Capital One SavorOne reward for students integrates unlimited 1% cash back on general purchases. In addition, students can build up cash rewards for an extended time since the cash back rewards generated with Capital One credit cards don’t expire.

Why select it:

  • 16.49% to 26.49% percent variable APR
  • No foreign transaction fees
  • No annual fees
  • 1% cash back on general purchases
  • 3% cash back on dining, grocery stores, entertainment, and streaming services

Journey Student Rewards from Capital One

International students in America can apply for the Journey Student Rewards from Capital One using an ITIN in lieu of a Social Security number. Cardholders receive 1% back in rewards. Additionally, they can enjoy 1.25% back once they process their credit card bill on time.

International students can benefit from this credit card that features no foreign transaction fee/ annual charge. In addition, Capital One usually reviews the credit card account for credit line increases after six months of purchase activity.

Why choose it:

  • 26.99% variable APR
  • No foreign transaction fees
  • Offers unlimited 1% perks back on all spending (get 1.25% on on-time credit bill payment)
  • Unlimited 5% cash back on bookings (hotel and rental cars) via Capital One Travel.

Chase Freedom Student Card

Non-citizen students can apply for a Chase freedom student credit card using an ITIN without providing a Social Security number. The credit card offers flat 1% cash back on daily spending. Card owners can also enjoy 5% cash back on Lyft and a US$50 sign-up bonus upon initial purchase after opening the account.

The Chase Freedom credit card for students charges a 3% foreign transaction fee, unlike other credit cards with free foreign transactions. However, international students can access their credit scores for free with Chase’s Credit Journey program and the card has no annual fee. In addition, you’ll earn US$20 in Good Standing Rewards yearly for the account anniversary.

Why choose this credit card:

  • 16.49% variable APR
  • No annual fee
  • 1% cash back on all spending
  • US$50 bonus upon making your first purchase within three months of opening the account
  • US$20 credit for accounts in good credit standing every year (for five years).

Tips to Get a Credit Card as an International Student

Some practices can optimize your chances of obtaining a credit card for international students. 

  • If you’re applying for a United States based credit card, wait until your arrival in the U.S. This is because most U.S. credit cards require a stateside address for approval.
  • While applying for credit cards in your home country, ensure the credit card option doesn’t charge foreign transaction fees.
  • Apply for an Individual Taxpayer Identification Number (ITIN). An ITIN can increase your options of getting a United States credit card, especially if you lack a Social Security Number (SSN).
  • Check your eligibility for a Social Security number. International students with F-1 visas can access SSNs. In addition, the U.S. Department of Homeland Security provides relevant information on its webpage for international students.

Benefits of Having a Student Credit Card

Students studying abroad can garner many benefits from a credit card. Below are some of these benefits;

  • Build a good credit history through on-time repayments
  • Learn financial discipline/how to use money
  • Excellent backup plan
  • Avoid overdrafts
  • Gain rewards/perks

 FAQs

Can an International Student Get a Credit Card in the U.S.?

International students are eligible for credit cards if the credit card issuer accepts Individual Taxpayer Identification Number (ITIN) to substitute Social Security number. Students with limited credit history may need additional consideration for approval for credit card applications, i.e. cosigner, proof of income, etc.

Which Credit Card is Best for International Students?

The best credit card for non-citizen students studying in the United States is one that provides high rewards on purchases, charges no foreign transaction fees, and is eligible for students without a Social Security number. Examples of such cards include: Deserve EDU Mastercard, Capital One SavorOne rewards for students, and Capital One Quicksilver reward credit cards for international students.

Can an International Student Get a Credit Card without an SSN?

Yes. Some credit card companies accept ITIN as a substitute for Social Security numbers for international student credit card applications.

Which Credit Card is Best for International Students in the U.S. without an SSN?

Credit card companies such as Capital One, Discover, and Chase issue credit cards to international students without SSNs. International students without SSNs can consider students credit card issuers who accept ITIN instead of SSNs.


Before selecting a particular credit card company, weigh the options available. Different credit card issuers integrate a varying set of requirements and rewards. International students seeking the best credit card can consider companies like Discover, Capital One, Deserve, and Bank of America. Wrapping up, ensure you choose the best option for you!

*Information accurate as of March 2023

Resources

https://www.forbes.com/advisor/credit-cards/best/student/

https://educationusa.state.gov/your-5-steps-us-study/apply-your-student-visa/short-term

https://www.wes.org/advisor-blog/building-your-credit/

Other Interesting Posts:


International Student Credit Cards in the U.S. 

March 20th, 2023 by IEFA

Credit cards are some of the best financial tools available to international students in the U.S. You can have access to cash during emergencies or take advantage of rewards or cash-back programs to save money. With so many options available, it is important to select the right card for your needs.

In this article, we will be sharing everything you need to know about selecting the best credit cards for international students in the US.

How Do International Student Credit Cards Work?

Like with any credit card, this type of card allows you to make purchases, earn rewards and even withdraw cash from ATMs when necessary.

However, international student cards are designed specifically for non-US citizens studying in the US. Some of these cards allow you to transfer funds from your home country with no added fees, making them a great option for international students. With these benefits, international students have the opportunity to experience financial independence during their time studying abroad.

No matter how many benefits a credit card offers, if you don’t use them responsibly, you can end up with a pile of debt. That is why it’s important to know the features and benefits that come with any credit card before signing up, and to use them responsibly.

What Are the Benefits of an International Student Credit Card?

Here are some of the benefits of using an international student credit card:

Access to Cash: Credit cards can be a great financial security blanket. With the ability to access cash from ATMs worldwide, you’re never too far away from help in case of an unexpected emergency or everyday purchase. Just keep in mind that some may charge a fee for utilizing this feature – so make sure to check terms before using this facility.

Lower-Interest Rates: International student credit cards offer the perfect solution for those studying abroad – not only do they provide more flexibility with their global acceptance, but also boast lower interest rates than many traditional credit cards.

Rewards and Cash-Back Programs: Most secured credit cards come with rewards or cash-back programs that allow you to earn cash rewards or points for every purchase you make. You can then use these points to get discounts on future purchases or even redeem them for products and services.

Credit Building: One of the best parts of having a credit card is that it can help you build your credit. By making timely payments and staying within your credit limit, you can slowly increase your credit score over time. This is great news for international students who may not have a lot of options when it comes to building their credit in the US.

*Note: Just as we mentioned earlier, the risks of having a credit card cannot be overlooked by the benefits mentioned above. It is important to use your credit card responsibly and not overspend, or you may end up in a lot of debt.

Things to consider when shopping for international student credit cards

Now let’s look at some of the factors you should consider when shopping for one of these credit cards.

Annual fee

Annual fees are the price that you pay to use and maintain the credit card. Most credit card issuers, however, don’t charge annual fees for an international student credit card. If a card does have an annual fee, make sure you read the terms and conditions carefully to ensure that it is worth paying.

Foreign transaction fees

A foreign transaction fee is a fee you pay for using your credit card in a different country. Most international student credit cards do not have a foreign transaction fee, so make sure to check this before signing up for a card.

Credit limit

One downside of secured credit cards is that the credit limit can be quite low, making it hard to make large purchases. But since you are a student, you might not need a large credit limit. If you still need a higher credit line, make sure to talk to the card issuer and see if you can increase your credit limit.

Rewards/cashback

Just as we mentioned earlier, most credit card companies offer rewards or cash-back programs for international students. This is a great way to save money on future purchases or even redeem them for products and services. However, make sure to read the terms and conditions carefully before signing up for any rewards program!

Security deposit

Since it’s a secured credit card, you have to provide a security deposit when you sign up. This amount is usually determined by the card issuer, so make sure to ask about this before signing up. On average, it’s around $500 to $2,000.

Your needs/spending habits

Make sure to consider your own needs and spending habits when looking for the best international student credit card. After all, it’s important to find a card that fits your lifestyle and budget. Make sure to follow a budget and only use a credit card when absolutely necessary.

Requirements

Every credit card company is different and has different requirements for international students. For example, some companies might need you to submit your SSN to apply for a credit card, while others might just need copies of your passport and visa. Some might also require you to submit your individual taxpayer identification number (ITIN). Make sure to read the requirements for each card carefully before applying.

Your credit history

One of the major requirements for getting approved for a credit card is having a good credit history. If you don’t have any credit history, make sure to start building yours by making small purchases and paying them off on time. Credit bureaus like Experian and TransUnion can be a great way to check your credit score and make sure it is up to date.


These are some of the factors you should consider when shopping for a student credit card. Make sure to do your research, compare different cards, and read the terms and conditions carefully before signing up. And remember, use your credit card responsibly, and don’t overspend! Good luck on your journey to building a strong credit score and financial future in the US.

Other Interesting Posts:


How to Choose the Best Credit Card for International Students in the U.S.

March 9th, 2023 by IEFA

Financing for higher education in the U.S. can be very expensive. The average cost of tuition and fees for one year of college is over US$25,000. Plus, there are other expenses like textbooks, housing, food, and transportation that need to be factored into the equation.

Having a credit card can help international students make purchases without having to worry about carrying money and paying extra currency exchange fees. Timely repayment of these accounts can also help them build a credit history in the U.S., which is important if they want to apply for loans or other types of financing in the future.

If you’re in the U.S. and want to get a credit card, this article will shed light on everything you need to know about international student credit cards and how to apply for one.

What is a student credit card?

A student credit card is a type of card that is specifically designed for students. It usually has lower interest rates, fewer fees, and may even come with rewards or additional benefits such as cash back on your purchases.

Student credit cards can be great for helping international students manage their finances while studying abroad in the U.S. when used properly – for example, avoiding overspending and making sure to pay off your balance in full every month. 

However, it is important to note that most student credit cards require applicants to have a social security number or a U.S. address.

How do international student credit cards work?

Credit cards for international students are similar to any other credit card in that they provide you with access to a line of credit. When you make a purchase, the money is automatically withdrawn from your card and then it is paid back at a later date with interest.

The difference between an international student credit card and a regular one is that most international student cards come with extra special features designed with the user in mind, such as travel and purchase protection, no foreign transaction fees, special student discounts, and more.

You can use the credit card for everyday purchases, such as groceries, gas, or even rent. However, international students should be careful not to use the card for purchases that they cannot afford because it could lead to unmanageable debt and damage their credit scores.

How to Choose the Best Credit Card

Here are some of the things that should be considered when choosing an international student credit card:

Define your priorities

Most international students don’t even need a credit card, but still want one because everyone else has one. First and foremost, determine whether you need it or not. If yes, define your priorities. These could include: 

  • How are you going to use the card?
  • How much is your average monthly spending?
  • What type of rewards do you want from the card?

Ask yourself these questions, and if you find there is a genuine need for a card, consider the best option for you.

Consider the minimum payment calculation

While it is always ideal to pay off your outstanding balance to avoid interest, you should be aware of how your minimum payment obligation is calculated. At a minimum, lenders will require you to pay at least 1% of the balance back plus the interest that has accrued. However, some lenders may require you to pay 5-10% of the principal balance back every period. 

Look for the foreign transaction fees

A foreign transaction fee is a fee that is imposed when you purchase something in another country. Most international student credit cards waive these fees, so be sure to check the terms and conditions of the card before you apply.

Check the annual fee

An annual fee is the money you pay for the privilege of using a credit card every year.

Annual fees are an important part of a credit card, so you should check if there is one, and what the cost will be. Many international student cards have no annual fees, but if the one you’re considering does, keep in mind that it can add up over time because you pay the fee whether you use the card or not.

Explore interest rates and charges

The most important factor to consider when choosing a credit card is the interest rate. Credit cards for international students often come with lower interest rates than regular credit cards, but it’s still important to compare different offers and select the one that has the lowest rate.

Interest charges can often be avoided if you pay off your outstanding balance every month. Interest accrues based on the interest rate in your agreement; the faster you can pay off the balance, the less interest you will incur on your account.

Open a bank account 

Before anything else, you will need a bank account to apply for a credit card. This can be complicated and time-consuming for international students, so make sure to check if the issuer offers an easy way to open an account.

Check the requirements

Every credit card company is different and has different requirements for applicants. Before applying, make sure you meet all the requirements such as having a valid passport and SSN. One company might need SSN, but other companies might not require it – if you have a certain requirement restriction – so make sure to do your research.

Consider the additional benefits

Additional benefits such as cash rewards and travel points are nice features to have with a credit card, so check if the card you’re considering has any additional benefits. Every card has different features so compare them and see which one offers the most value for you. For example, a cash rewards credit card might be better for you than a travel points card.

Read the terms and conditions carefully

Before you apply for a credit card, read the terms and conditions carefully. This will help you understand what fees, requirements, or restrictions are associated with the card before you commit to it.

Check your credit history/credit score

Major credit bureaus such as Experian, Equifax, and TransUnion offer free credit reports. Check your credit report to see if there are any errors or discrepancies that could affect your chances of getting a credit card.

10. Compare different credit cards

It’s important to compare different credit cards and pick one that best suits your needs. You can use comparison websites or ask a financial advisor for help in choosing the best credit card for you. You can also ask your friends and family members for their recommendations.

Once you have narrowed down your options, make sure to read the fine print and thoroughly understand all the terms and conditions before finally submitting your application.


These are the most important things to consider when choosing a credit card as an international student. We hope this guide will help you find the best card for you!

Other Interesting Posts:


Understanding Credit Card Requirements and Restrictions for International Students in the U.S.

March 6th, 2023 by IEFA

If you are an international student in the U.S., understanding the requirements and restrictions for credit cards is critical. Credit cards are an important part of financial independence and security, so it’s important to know what your options are.

Having a credit line can be especially helpful as an international student because timely repayments on these accounts can help you build your credit score and establish a financial record.

However, getting approved for a credit card can be more difficult for international students than it is for U.S. citizens. So, it’s always a good idea to do your research and find out what the requirements are before you apply.

In this article, we will discuss the requirements and restrictions for international students looking to get a credit card in the U.S.

What are the options for international student credit cards?

International students can apply for a credit card from a number of card issuers even if they don’t have a Social Security number (more on this later). Depending on your exact circumstances, this could be relatively easy or a significant challenge. If you don’t have any luck with a traditional credit card, or if you prefer to skip that option, an alternative could be a “secured credit card.”

A secured credit card allows students from abroad to establish credit in the U.S. It is called a “secured” credit card because it requires the student to provide a security deposit to obtain it. This makes it easier for students to access funds.

The security deposit can be anywhere from US$500 – US$1,000 depending on the card issuer, and is often based on the amount of credit the student wants to have available. The main benefit of an international student credit card like this is that it helps the user build a positive payment history on their reports. This credit history can then help them secure loans, mortgages, and other lines of credit in the future.

International secured credit cards also often come with special benefits like discounts on travel expenses and cash-back rewards. Additionally, many cards charge low or no annual fees and offer competitive interest rates.

Credit Card Requirements for International Students

The requirements might vary depending on the issuing bank, but here are some of the common requirements for international students:

Bank account

The first requirement for most credit card companies is having a U.S. bank account. You will need to provide the bank details to get the credit card. Also, it will be easier to manage your finances if you have a U.S. bank account. So make sure to do some research and get a bank account before applying for a credit card.

Security deposit

A secured card needs a security deposit. The bank usually requires the student to put down a minimum amount, which is usually between US$500 – US$1,000. However, it can vary from credit card company to credit card company, so make sure to read the terms and conditions before applying.

Credit history check

There are three major credit bureaus in the U.S., which are Equifax, Experian, and TransUnion. A credit card company issuing a non secured card will check the credit history of those who apply, including international students, to make sure they are able to manage their finances responsibly while in the U.S. A good credit score increases the likelihood that the applicant will be approved.

Proof of employment

Although it’s not necessarily a requirement, it’s a good idea for international students to show proof of employment when applying for a credit card. Having a job in the U.S. can help increase the chances of getting approved, and it also demonstrates that the applicant is financially stable. Some companies might need you to show your individual taxpayer identification number (ITIN) as well.

Unsecured credit card providers will need to evaluate your ability to repay the outstanding balance, and may require a cosigner if you do not have regular income from employment.

Social Security number

Some credit card issuers will require international students to provide a U.S. Social Security number (SSN) in order to apply for the card. An SSN is also required for reporting taxes, so make sure you have one before applying for your credit card. If you don’t have your SSN yet, there may be alternative ways to prove your identity and creditworthiness to the company.

Residency status or visa

International students must hold a valid visa or residency permit in the U.S. in order to be eligible for an international student credit card.

These are some common requirements that international students must meet in order to be eligible for an international student credit card. Some credit card companies might have higher requirements, so make sure to read the terms and conditions before applying.

Restrictions for International Students

Now that we know the requirements for international students, it’s important to understand the restrictions that come with many credit cards.

Longer approval time

Most banks take a few weeks to review applications and complete the approval process. Since you are an international student, the process may take a little bit longer. There are certain protocols and procedures that must be adhered to, and this might mean a longer wait for the approval.

Higher fees and interest rates

Although there are some competitive interest rates and fees, international students might have to pay higher than the average rate due to their lack of credit history. Make sure you do research and compare different cards before applying for one.

Low credit limit

Another restriction associated with international student credit cards is the low credit limit. This means that even if you are approved, the bank might issue a card with a low initial credit limit. Low limits mean not being able to spend too much money and using only what you need – which isn’t always a bad thing! 

Higher minimum payments

International students may have to pay higher minimum payments than other cardholders. Make sure to check the terms and conditions of your credit card before using it in order to know how much you have to pay on a regular basis.

Things to Consider Before Getting a Credit Card

Here are some of the things to consider before applying for an international student credit card:

Annual fee

Some credit cards may have annual fees that will affect your budget, so make sure to read the terms and conditions before signing up. The annual fee is the amount charged to use the card each year. Some card issuers do not charge annual fees.

Interest rates

Interest is the amount you pay on top of the balance you owe. Different banks will have different interest rates, so it’s important to compare and make sure you are getting the best deal.

Rewards and benefits

Rewards and benefits vary depending on the credit card. Many cards offer points, cash back, travel rewards, and other perks that can be beneficial for international students. Make sure to research different cards before applying to find one with rewards that appeal to you.

Foreign transaction fees

Foreign transaction fees are charged when you make a purchase in another currency. Some credit cards may charge foreign transaction fees, so make sure to read the terms and conditions before signing up.

Late payment fees

Late payment fees can add up quickly if you don’t pay your bill on time, so it’s important to set reminders or set up automatic payments to make sure you don’t miss any due dates. There is also a negative impact on your credit score for missing payments.

Building credit history and your credit score

The higher your credit score, the more likely you are to get approved for credit cards and loans in the future. Making timely payments and staying within your limit can help build a strong credit history that will be beneficial in the long run.


International student credit cards can be a great way to build your credit score through repayment, earn rewards and get access to cash when needed. However, there are certain restrictions and fees associated with these cards that must be taken into account before signing up. Be sure to do research and compare different offers in order to get the best card for you.

Other Interesting Posts:


IEFA logo
Thank you for visiting IEFA.org
Providing information about international financial aid & scholarships since 1998
2024 MPOWER Financing, Public Benefit Corporation
1101 Connecticut Ave NW Suite 900, Washington, DC 20036