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I live in the U.S., and my daughter will be starting college in England in the fall. She is financially dependent on us, has no credit history, and will not have a job while she's in college. We'll be paying directly for her major expenses, but she'll need to spend money on minor stuff, and we also need her to be able to handle emergencies. What is a good way of setting this up?

My wife suggested that we get her a credit card and co-sign for it. I'm concerned that this will set up a situation where our daughter perceives the money as something that flows from a tap; I would rather be able to dole it out to her so that she knows she has a monthly budget, while still allowing for emergencies.

Is a debit card a better option? If so, would it be better to have the card drawn on a US account or one in the UK? Do debit cards from US banks work abroad?

It would also be helpful if answers could go into the fees involved, including fees for transferring money between countries, as well as the miscellaneous fees banks charge on debit cards -- which I hear can be extremely exploitative here in the US.

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    Most US colleges have accounts linked to the student ID cards. These can be used for on campus vendors (coffee, snacks), the dining hall, and even some near campus locations. Parents can transfer money to these account on a set schedule, on a ad hoc basis, or when balances are low. I have no idea of these exists at universities outside the US. – mhoran_psprep Mar 15 '14 at 19:19
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Why not get her a credit card of her own, while she is still in the US? My experience with Canadian banks is that they were delighted to issue credit cards to I-turned-18-yesterday with no income. We did not cosign these applications. You can then give her a budget and pay up to that amount of her credit card bill each month (you should be able to do this online.) Should she overspend, she may have to scrimp for a while until your payments bring the balance back to zero.

Don't delay on this though: I doubt any UK bank will issue her a card with no credit history and having only just moved to the country. And get a chip and pin if you can, they work everywhere in Europe.

  • Nice answer, thanks! I'd also be interested in an answer that addressed the specifically international issues. – Ben Crowell Mar 15 '14 at 20:56
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    I have never had an issue using a Canadian chip-and-pin credit card in the UK, nor has anyone else I know. – Kate Gregory Mar 15 '14 at 21:16
  • Are there fees? Do they give a bad exchange rate? – Ben Crowell Mar 15 '14 at 21:20
  • Good questions, better answered about US cards though. – Kate Gregory Mar 15 '14 at 21:35

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