When we travel, we always try to use credit cards whenever possible. There is a lot of debate out there as to the benefits and drawbacks of credit cards when it comes to being financially responsible.
This is how we choose to handle our credit cards:
-We pay them off each month, in full.
-We watch our spending and still budget.
-We never spend more than we make
-We still track everything we buy.
This, however, is not a post as to why you should use credit cards in life…this is specifically about why we use them more when we travel. Here are a few reasons why we choose to use plastic when we travel.
What No One Tells You About Traveling With Credit Cards
1. Credit Card Theft Protection
Your credit card likely has protection against theft. On more than one occasion, most recently when we went to Brazil, our credit card number was stolen while we were traveling. Our physical card was still in our possession but the number was taken. This last time they managed to rack up $15,000 of charges (our credit limit) all during the time we were on overseas flights back to the states. This was not the first time this has happened. Although it is a hassle to get a new card, I’m not out any money when this happens because I used my credit card. If they get a hold of cash or a debt card…you likely won’t have that protection.
2. Better Exchange Rate
The exchange rate with a credit card is typically better than the desk at the airport when exchanging cash. Credit card purchases are exchanged at the inter-bank exchange rate, which is almost always better than the currency exchange desk.
3. Fees Waived
Make sure you’re using a card without any foreign transaction fees. Capital One is known for being great about this. Then you’re avoiding the fees that you would incur if you were withdrawing from an ATM. Some banks also waive ATM fees too, but not as many as credit cards.
4. No Leftover Money
Whenever possible we try not to have leftover money when traveling. You probably paid a fee to withdraw it from an ATM, or if not you still will likely pay a worse rate at the money exchange counter when you leave. Skip the fees, use the card. When you use the card, there is no such thing as leftover money that you have to spend on trinkets at the airport on your way back home.
5. Track Spending
This is why I use credit cards most of the time, but also it is great to track spending when you’re traveling. Even if it is just to go back and tell your friend who is planning a similar trip how much you spent on X when you visited.
6. Handle Disputes
Unfortunately, sometimes you will have to dispute charges and it makes it easier when you’ve paid for the purchase on a credit card. For example, paying upfront for a hotel and then finding out they are booked solid…and they move you over to a cheaper hotel without giving you a refund for what you paid at the larger fancy hotel? (Can you tell this has happened to me?)
Good thing for credit card disputes, as you can dispute not receiving the item you paid for. This also happened recently when we purchased a video of our hang gliding adventure. We purchased CD’s of the adventure, and when we came home one was corrupted. We are able to get a refund for the charge right away.
7. Extra Protection
Did you know your credit card may have extra protection like coverage on your rental car or even trip insurance! Some even cover lost bags, arrange medical help (ambulance) if you are hurt and over 100 miles from home and even prescription assistance if you forgot your pills at home!
You may have a card that gives you double points for traveling! May as well use it if you’re buying it anyway! If you have certain airline/hotel cards you can even get free upgrades, free extra checked baggage, free breakfast/room upgrades and special lounges at airports!
Do we use cash? Yes of course we do. We use it for more on the side spending than anything else. In some countries, cash is still king. For example Cairo, Egypt was next to impossible to use a credit card. Rio was a mix and it depended on if we sat down to eat or if we dined at small food carts. Ireland and most of Europe we do almost everything on card, and use cash for various markets and smaller vendors. However, we also do our best to use our card whenever possible!
My final tips for you about using credit cards when traveling:
Always inform your credit card and banks that you will be traveling. If not (and even sometimes when you do) they may cancel them if they see charges in other countries. Make sure they have an email rather than phone number to contact you if you’re shutting off your phone for the trip. Also, bring a backup card just in case you lose your card, or it is shut off. Also, don’t use your debit card for anything except withdrawing from your ATM…it is too risky. If you’re needing to use the ATM card for some reason, get cash…then pay in cash.