International students by UNE Photos, on Flickr
As more and more international students travel to the United States for their schooling, a common experience emerges: money mistakes. We’ve all made mistakes with money at some point or another. But when you’re away from home, the impact of a mistake can be huge — you need all the funds you can get.
You’re less likely to make a mistake if you know what to avoid. Here’s are five of the more common mistakes international students make.
1. Not Understanding Foreign Exchange Rates
Foreign exchange rates make all the difference in spending power between one country and another. Students coming to the U.S. from countries with a relatively strong currency won’t have many problems. Their spending power will be the same – or even better – compared to what they’re have at home.
But students coming from countries with weak currencies will want to be sure they aren’t outspending their means by keeping track of foreign exchange rates. Otherwise, they could find themselves quickly running out of cash.
2. Not Alerting Credit Card Companies
Credit Cards by Matt Sherberg, on Flickr
Using student credit cards can make sense for international students if they qualify. Many don’t or can’t hold part-time jobs during college that may be more accessible to native students, and a credit card can help them manage their basic expenses until they can pay off the full amount of their balance when they go home. Most credit cards can also be managed online, so a student’s parents can pay down the card from afar.
However, using credit cards internationally can get tricky if you don’t plan ahead. Choose a card without international transaction fees, and alert your U.S. credit card company when you’ll be traveling back home. This way, the company won’t flag your transactions as potentially fraudulent when they suddenly start coming in from another country.
3. Paying Tuition by International Wire
Most international students at U.S. colleges pay full tuition because they can’t get federal student loans or scholarships – or don’t even need to apply for them. That’s all well and good – until their international wire transfer doesn’t get to the school in time or doesn’t have their name attached to the money.
As this article from Fox News shows, international wire transfers can eat away at your chunk of change as fees between banks add up. On top of those fees, you also have to deal with the problem that your information may get erased from the payment before it reaches the bursar’s office, resulting in serious tuition snafus.
Luckily, more services are becoming available for international students, who can band together in mass international money transfers that get better rates and keep things more organized. Check out these options online before wiring money directly to your school.
4. Not Understanding Student Loans
The majority of American students take out at least some student loans to fund their educational experience. And foreign students may assume that those same loans are available to them, as well.
Understanding Student Loans by Hajj Flemings, on Flickr
Unfortunately, since the bulk of affordable student loans is backed by the federal government, these loans are available only to U.S. citizens and permanent legal residents. You may be able to get a student loan from a bank, as long as it’s signed by a citizen or permanent legal resident who has good credit.
5. Paying Full-price Tuition Without Doing Research
American schools love to attract foreign students for a variety of reasons, one of them being that these students typically pay full-price tuition. Even if you have the means to take the more expensive route and pay full tuition for a school, does it make sense for you? Your education is a major investment and should be treated with great care. Research your choices wisely and thoroughly – ideally by visiting the campus ahead of time, to make sure you are getting the value promised on the institution’s website. If you can’t travel before an application is due, then be sure to talk to current and former students, and read all you can before getting your heart set on one school that won’t turn out to be all that it seems.
Not only do international students tend to struggle with the same basic money issues most college students have – where to get cheaper textbooks, how not to spend too much on going out, and so on – they also have these larger issues to contend with as they deal with exchange rates and a more challenging way of accessing funds.
Luckily, there are ways to avoid mistakes; the key is educating yourself before you pursue your international education.
Daniela Baker is a blogger and social media advocate at CreditDonkey, a financial education website. One of her favorite travel quotes is: "“I am not the same having seen the moon shine on the other side of the world” by Mary Anne Radmacher. Follow her on Twitter (@CreditDonkey) for the latest financial tips and deals.
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