If my daughter received a letter saying that she is being sued by a credit card issuer for non-payment, what can she do at this point?

Your daughter does not need to do anything until she is served with the summons and complaint by a process server.  The complaint is the lawsuit attached to the summons.  When your daughter is served with the lawsuit, the summons will state the number of days she has to file an answer to the complaint.  Your daughter will need to file with the court an answer to the complaint within the stated time period.  She will also need to serve the opposing party with the answer to the complaint by mail.  If your daughter does not file the complaint within the time stated in the summons, the opposing party can file a default with the court.  This means your daughter will lose by default.  If that happens, your daughter will need to file a motion to set aside the default.  If the court grants the motion, the case will then be back on track and litigation will continue.

As for the answer to the complaint, the answer denies the allegations in the complaint.  At the law library, look in the index of Pleading and Practice for answer to complaint.  This will provide the general format for an answer.  At the end of the answer is the verification which your daughter signs and dates under penalty of perjury. The verification attests to the veracity of the statements in the answer.  File the answer with verification and an attached proof of service with the court and mail a copy to the opposing party or the opposing party's attorney.  The proof of service verifies the date of mailing.  Your daughter can use a court form proof of service or can write her own.  If she writes her own, the proof of service just says that she is at least 18 and the attached documents were sent via first class mail unless stated otherwise to ______________ (name and address of opposing party or opposing party's attorney) on _________ (date).  Sign and date at the bottom.  The date signed should be the same as the date of mailing and the same date the documents are filed with the court.