5 Reasons You Should Use Credit Cards Whenever You Travel

Growing up, I never had much interest in traveling, though I can’t quite pinpoint why. However, now that I have a family of my own, I’m beginning to appreciate the allure of exploring new places. It’s a chance to immerse ourselves in different cultures and break away from our usual routines, creating cherished memories along the way.

As the pandemic has put leisure travel on hold for about a year, I eagerly anticipate the day when we can venture out again. [Editor’s Note: Please refrain from traveling right now.] Personally, I’m already planning ahead by applying for a travel credit card. I find using a credit card for travel expenses particularly advantageous. Not only does it offer financial protection, but it also adds convenience to the journey. Here are five reasons why I believe using a credit card for travel is beneficial.

Using a credit card offers unparalleled convenience, as it’s widely accepted and easy to carry. Certain businesses, such as car rental agencies and hotels, often require a credit card for reservations due to its higher spending limits compared to debit cards. This higher limit allows companies to mitigate potential losses more effectively in case of incidents.

Moreover, with a credit card, you can avoid the hassle of carrying cash. It simplifies the process of making reservations and payments, while also providing organized transaction records that facilitate budgeting and expense tracking long after your trip.

However, it’s worth noting that not all establishments accept credit cards, especially abroad, where smaller local shops may prefer cash transactions. Therefore, it’s advisable to carry a small amount of local currency as a backup, although credit cards remain the preferred payment method for many travelers.

When cash is stolen, it’s gone for good. However, with a credit card, you’re not liable for fraudulent purchases made with a stolen card, provided you report it within 60 days. It’s a good practice to keep the card’s customer service number handy, either written down in a secure place or stored in your phone, for quick access in case of loss or theft.

Debit cards, on the other hand, offer less protection. While they may claim to provide safeguards, you often need to report unauthorized transactions within a shorter timeframe, typically two or three days, to qualify for protection. Additionally, if your debit card is compromised, the funds are immediately withdrawn from your account, leaving you without access to your money until the issue is resolved. In contrast, with a credit card, the disputed amount isn’t deducted from your funds, offering a buffer while the dispute is resolved.

For added security, designate a specific credit card for travel purposes only. By using it exclusively for travel expenses and not for recurring bill payments or other purchases, you minimize the inconvenience of updating billing information if the card is ever lost, stolen, or replaced.

Traveling with a pocketful of coins can be cumbersome, especially in unfamiliar international destinations where deciphering coin denominations can be challenging. In such situations, travelers often resort to using larger bills, resulting in leftover loose change in a foreign currency that may be difficult to spend.

By opting to use a credit card, you can bypass this inconvenience entirely. Additionally, using a credit card offers protection against potential scams, such as receiving incorrect change from a cashier or being overcharged by a taxi driver. In my own experiences, I’ve encountered instances where overseas taxi drivers attempted to shortchange me, counting on my unfamiliarity with the local currency or assuming I wouldn’t notice. Using a credit card provides a layer of security against such fraudulent practices, ensuring peace of mind while traveling.

This scenario isn’t uncommon, and it’s likely not accidental. For instance, imagine you arrive at your destination, and the taxi fare reads $12. You hand the driver a $100 bill, and they promptly return $38 in change. Then, they pause, watching for your reaction. Perhaps you’re tired from a long flight or in a hurry, and you mistakenly assume you gave them a $50 bill instead.

If you question the amount, the driver might hastily concoct an excuse, claiming they were searching for more change. In reality, they were hoping you wouldn’t notice. While most taxi drivers are honest individuals trying to earn a living, there’s always the possibility of encountering a dishonest few, especially when cash is involved.

Numerous credit cards provide valuable perks that can result in significant savings during your travels. One such perk is car rental insurance, which can cost upwards of $15 per day when purchased separately. By using a credit card that offers this coverage for free, I’ve likely saved hundreds of dollars over the years.

The process for filing a claim is straightforward as well. On one occasion, I was rear-ended in my rental car while traveling. After the police determined the other driver to be at fault, I simply drove the rental to a nearby car rental facility. They exchanged my vehicle, contacted the credit card company, and essentially handled the entire process from there.

Using a credit card for travel offers the enticing benefit of rewards. Some cards offer up to 5% back on rewards, essentially providing a discount for every dollar spent during your vacation. However, to make this financially advantageous, it’s crucial to pay off the credit card balance in full before interest charges accrue.

The key to successful travel finances lies in advance planning. Save money for your trip in a high-yield savings account, earning interest until your departure. Then, utilize your rewards credit card to cover trip expenses, accruing valuable rewards such as air miles or cash back. Finally, pay off the balance using the saved funds, avoiding high interest fees while still enjoying the rewards.

Once more, I urge you not to travel right now. The world is still grappling with the aftermath of a devastating pandemic, and even the most optimistic vaccination projections suggest that most people will have to wait several months for their doses. However, there is light at the end of the tunnel, and eventually, you’ll be able to explore the world once more.

When that time comes, be sure to plan your finances as meticulously as your itinerary. Using a dedicated travel credit card can offer numerous financial benefits, including reward bonuses and enhanced security. As you prepare, consider researching cards that don’t charge hefty fees for currency conversions. By doing so, you’ll be able to enjoy your trip to the fullest without constantly worrying about having enough cash on hand.