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Using a credit card while traveling

Written for Credit One Bank by Experian Written for Credit One Bank by Experian

Do you plan on vacationing abroad soon? If so, consider using a credit card instead of cash as much as possible when traveling in other countries. It’s best to carry a mix of credit cards and cash while you’re on the road, because not all vendors accept plastic and, if you lose your card or it’s stolen, you might need cash to hold you over until your replacement card arrives. For the same reason, it’s always a good idea to have a backup credit/debit card, as well as extra cash, that you keep secure in your hotel room when traveling.

With many credit cards, there’s no charge for using them abroad, but some credit card companies charge foreign transaction fees to use their cards outside of the U.S. However, it also costs money to convert American dollars into the local currency; conversion costs will vary by vendor (or ATM).

If you have a credit card that doesn’t charge foreign transaction fees, it makes sense to use it as much as possible abroad, particularly given that credit card companies often provide you with a more favorable exchange rate than you’re able to get on your own at a bank or money exchange. But even if your card charges foreign transaction fees, you’ll want to weigh those fees against the costs of converting cash to see whether it’s more advantageous to use your card or cash abroad.

Besides potentially saving you money on conversion fees, here are three additional reasons why credit usually beats cash when traveling:

Reason #1 – Credit cards are more secure.

Losing your wallet or purse—either misplacing it or to a local thief—is a real concern whenever you’re traveling. But if you lose your credit card, you at least have the opportunity to notify the issuer so they can cancel it and get you a new one—often very quickly.

Even if it takes you some time to realize your card is gone, most credit card companies are pretty generous about waiving fraudulent charges. On the other hand, if you lose your cash while traveling, you’re probably simply out of luck.

Reason #2 – Credit cards can be more convenient.

In many instances, whether you’re traveling or at home, it’s easier to use a credit card than cash. With a credit card, you don’t have to carry a lot of cash—and you don’t have to carry annoying coins you receive as change that weigh down your pockets or purse.

The convenience factor is further multiplied when you consider that, while you’re abroad, you’ll be dealing with an unfamiliar currency that you’ll be handing back and forth to merchants who may not speak your language. By simply swiping or inserting your credit card, you’ll bypass a lot of confusion.

You’ll also avoid the problem of what to do with all of that leftover foreign currency when your trip is over. The more you use your credit card, the less money you’ll lose converting it back to U.S. currency.

Reason #3 – Budgeting and monitoring your spending are easier with credit cards.

It’s a good idea to make a budget when traveling. That’s the easy part. The hard part can be staying within that budget as your vacation progresses. The more cash you have to withdraw, the more difficult it can be to keep track of your spending. If you have an online account with your credit card, it’s generally easier to monitor your expenses and stay within your budget. And, if you’re traveling for a vacation, the whole point of the trip is to avoid doing too much work!

So the next time you travel outside of the U.S., don’t forget to pack your credit card. Yes, take some cash as well, but for all of the reasons above, put your credit card to work for you so you can relax and enjoy your trip.

Safe travels!




This material is for informational purposes only and is not intended to replace the advice of a qualified tax advisor, attorney or financial advisor. Readers should consult with their own tax advisor, attorney or financial advisor with regard to their personal situations.


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