How to stay afloat in the year abroad

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The Independent Online
Students going abroad to study for a year have financial problems to address over and above managing debt. What should they do about a bank account? And insurance? How to get money transferred? What about a credit card for emergencies or for secure spending?

UK institutions falling over themselves to "help" students here can possibly offer help for those going abroad, too.

At the rather gimmicky level, NatWest offers commission-free travellers' cheques and foreign currency. But the bank will also help with the opening of a foreign bank account, sending a letter of introduction as a reference for local banks. For example, in France some banks offer special accounts for under-25-year-olds and students, but insist on parental guarantees.

Barclays, despite having an extensive network of branches in Europe, advises students going abroad to maintain their UK account. This way they can keep the bank's special student terms while still making withdrawals in the local currency, using their debit cards. Cashpoints in the Delta Visa network can be used, but there will be charges.

Students who take out a Barclaycard get a pounds 25 credit on it and a credit limit of pounds 350. Other banks offer similar credit limits as standard but it should be possible to get a higher limit with a parental guarantee.

Frizzell Bank offers a credit card aimed especially at people going abroad. Most other cards make a "turn" of 2 per cent or so on the exchange rate when you use them abroad and therefore give you a worse exchange rate. But Frizzell's card makes no surcharge. Cash loaded on the card will earn 3 per cent interest until the money is spent.

Frizzell will also issue local currency cheques against card accounts, for example, to provide a deposit for accommodation. The card is issued in both Visa and Mastercard forms. But there is a downside: Frizzell charges a pounds 10 annual fee.

Money transfer services are available for the use of kindly parents wishing to support their offspring. But many of these services can seem expensive or present other problems, such as slowness. Two that appear not too bad overall are the services offered by NatWest and Thomas Cook.

For many students going abroad the other great expense is insurance - sometimes seen as an unaffordable luxury. Even with Endsleigh, the student insurer, premiums start at pounds 157.50 for a year for a policy that includes medical cover and possessions insurance.

The Association of British Insurers emphasises that, with regard to possessions insurance, it should not be assumed that students will be covered if they are included on their parents' policy in the UK. Policies may not extend to offspring spending a year abroad.