High Exchange Rates Increase Study Abroad Costs; Tips for Student Cards and Remittances

With the new academic year beginning at overseas universities, parents are actively seeking guidance on managing the rising costs of studying abroad. The current high exchange rate, with the won-dollar rate approaching 1600, significantly increases the financial burden on families.

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If the exchange rate is falling, using a credit card rather than cash can be a good choice. This is because the exchange rate applied to credit card payments made overseas is based on the rate on the day the transaction details are received by the domestic card company, not the day of use. Typically, it takes three to seven days for the transaction details to reach the domestic card company.

Online communities for international schools are abuzz with inquiries from parents asking for recommendations on suitable cards for overseas use and effective methods for sending living expenses. This proactive approach aims to prepare necessary financial services for their children's life abroad, especially given the substantial initial costs including tuition, accommodation, student fees, and insurance.

Industry experts advise that strategic use of financial services and cards can help mitigate these costs. For instance, using credit cards for overseas payments can be advantageous when the exchange rate is falling. This is because the exchange rate applied is typically the one on the day the transaction is processed by the domestic card company, which occurs three to seven days after the actual purchase. If the rate drops during this period, the cardholder benefits.

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If you expect your card's expiration date to pass during your stay abroad, you need to contact your card company before departure to request a renewal.

When selecting financial products, consumers are encouraged to compare benefits offered by card companies and banks. This includes looking for cards that offer higher points for overseas spending, waive or discount foreign transaction fees, and provide benefits on essential expenses like airfare, local living costs, and transportation. Participating in special events or promotions targeted at prospective international students, such as those offering gift certificates for overseas tuition payments or financial coupons for remittances, can also lead to savings. Additionally, parents should verify ATM withdrawal capabilities and ensure their child's card has sufficient validity for their stay abroad, renewing it if necessary before departure to avoid complications.

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When you are prompted to choose between Korean Won and local currency when paying by card overseas, selecting the local currency is more advantageous. Paying in Korean Won can result in a higher total charge compared to paying in the local currency because an additional currency conversion fee is applied.