Using a credit card can be advantageous but it can also cause some nightmares as well.
These days, people tend to favor using a credit card to make purchases. That’s because credit cards are able to extend our spending capacity by allowing us to buy things and then pay them later either in a lump sum or in installments. But what about when you’re traveling? Is using a credit card beneficial for travelers, or do they cause more harm than good?
Advantages of Using a Credit Card During Your Travels
1. Access to Online Deals
One of the advantages of using a credit card is that you are able to book cheap airline tickets and hotel reservations online. Many of these websites that offer discounted rates on flights and hotels will only allow you to book a reservation by using a credit card.
2. Extra Mileage for Upgrades and Freebies
Using your credit card to make purchases or payments allows you to earn points that you can use to avail of a list of products and services offered by your credit card company’s loyalty program. Some credit card companies have partnerships with airlines and car rental companies. These partnerships allow you to convert your loyalty points into miles that you can then use to either upgrade your airline ticket, or even book an airline ticket for free.
3. Using a Credit Card is Safer
Another advantage of using a credit card during your travels is that it is a lot safer than having to bring cash around. Currency exchange kiosks located within the city offer better exchange rates than those located in hotels, banks and airports. The problem of going to these kiosks is that you attracted unwanted attention from shady people who are always on a lookout for tourists having their cash exchanged to the local currency. Using a credit card when making your payments eliminates all of this.
4. Lump Sum or Installment?
If you spent just a bit over your budget while traveling, and you were using a credit card for all of your purchases, you don’t have to worry about paying this as a lump sum. Credit card companies give you 30 days to review all of your transactions. For as long as you have a good standing with your credit card company, you can call them during this review period and request to have the lump sum converted into easy installment payments. This way you will be able to pay for your bill and not incur any financial charges.
5. Easier Way to Get Reimbursed
This is particularly true for travelers sent by their company either to another city or country. In many cases, business travelers would have to pay first for their expenses and then have them reimbursed by the company. By using a credit card during your business trip, you will have a detailed account of the transactions you’ve made so that you can submit this to your company and have your expenses reimbursed.
Disadvantages of Using a Credit Card While Traveling
1. Good-bye Bargain Shopping
One of the huge disadvantages of using a credit card during your travels is that it is more difficult to do some bargain shopping. That’s because credit cards are only accepted in stores located in shopping malls or fixed establishments, and their prices here are pretty much fixed. If you want to get a really good bargain, you’ll have to go over to the flea markets where the only accepted form of payment is cash.
2. No Control when Using a Credit Card
Because of high credit limits given by most credit card companies, there is always that possibility that travelers can go a little bit crazy when using a credit card to make their payments since they don’t see just how much they are spending until they receive their credit card bill.
3. Huge Foreign Transaction Fees
Another disadvantage of using a credit card to pay for stuff while you’re traveling is the additional fees and charges that will be included in your billing statement. Many credit card companies charge a foreign transaction fee for payments and purchases you make, which can go as high as 3%. As if that was not high enough, the foreign transaction fee is charged every single time you’re using a credit card to pay or buy something.
4. Problems with Payments
If you are using a credit card issued by a local bank and you’ll be traveling for a long period of time, paying your credit card bill can be a problem. That was the case when I took a trip to New York a few years ago. To make sure that I get to pay my credit card bill on time (and not risk the embarrassment of it being denied when I went shopping), I had to make arrangements with my parents to pay my bill on my behalf. Since I didn’t have my bill with me, I had to first request for a copy of the bill to be emailed to me by the bank and then have the money wired to my folks before finally having it settled.
Verdict in Using a Credit Card While Traveling
There is no doubt that using a credit card does have its benefits when it comes to traveling. But like everything else, it is not perfect and can even be the root of future financial problems. That being said, it’s still beneficial to still carry some cash along with you while traveling along with your credit card.
So what do you think? Is using a credit card beneficial for travelers or not? I’d love to read your thoughts about it.
Photo by Rev. Xanatos Satanicos Bombasticos (ClintJCL) Using a Credit Card: A Traveler’s Dream or Worst Nightmare?,
About Adeline Yuboco
Twitter: twitter (creditdonkey)
says:
Good advice. There are always two sides to a coin. It all boils down to taking a quick grip of the situation, and decide whether to use credit card or cash. Making a wise decision will depend on how we have evaluated the need so we get to know what is the most desirable course to take.
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That’s very true, A lot of times, it really pays to stop and think about not just what type of payment to use, but also whether or not to even buy it. Impulse shopping can really get people into a lot of trouble, speaking from experience. Thanks so much for dropping by.
Twitter: directbanc
says:
I think you did a great job of outlining the advantages and disadvantages of using credit cards when traveling. I personally feel safer carrying my credit card than a large amount of cash when I travel, although I always have some cash for shopping at local places that may not accept credit cards. I also like that I can dispute any charges on my card through the company, where as with cash I am just out of luck.
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Great points, Monica. Thanks so much for sharing and for dropping by.
Twitter: wizardofwords
says:
Great post, Adeline.
I use my credit card for practically everything, and don’t mind the foreign transaction fees as the convenience more than makes up for it. Plus, I had the great misfortune of being “had” by some timeshare salesmen last year and it was only because I had charged the transaction on Visa that I was able to demand (and get) a full refund.
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Oh my! So sorry you had to go through that experience. Good thing you were able to get a full refund. Having the ability to question certain transactions and even stop payments on credit cards are definitely some advantages they can give all of us. Thanks so much for pointing that out.
Thanks for the information Adeline. I don’t use the credit cards that much, but it’s great insight when planning an international trip.
Twitter: SrinivasYReddy
says:
This is a timely post for me, Adeline, as I’m traveling internationally at the moment. I tend use credit cards for airline ticket purchases or for expensive items. For everything else, I prefer cash. Of course, it also depends on where I’m traveling to. Presently in India. Cash works well for me over here.
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Really great to hear that, Srinivas. I haven’t been to India yet, but a few of my friends have and they’ve all told me that shopping there with cash is a lot better. Pretty much like here in the Philippines. If you want to get the best bargains, it’s right in the flea market and small kiosk areas which only accept cash…after a bit of haggling.
Thanks so much for dropping by.
Twitter: keepupweb
says:
Adeline, This is a nice write up on some of the pros and cons of using credit cards. I use credit cards for traveling and large purchases as well. As Doreen mentioned, a big advantage is being able to have the credit card company act on our behalf if we need to dispute a bill. The thing is that credit cards need to be handled responsibly as you’ve pointed out.
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Thanks so much, Sherryl. You’re right. You need to be very responsible and disciplined when using a credit card. It’s so easy to just hand it over and have it swiped so that you buy something. But of course, at the end of the month, you will still need to pay for it. And if you don’t have the money to pay for it, it’s really going to cause more problems in the future.
Thanks again for dropping by.
This is a great outline of the benefits and disadvantages of traveling using credit cards. I always travel with some cash just in case the place I’m visiting doesn’t accept credit cards.
Excellent points. Using a credit card is quite advantageous especially when traveling. But of course there are always cons to every pros. I think the best thing here is to use our credit cards responsibly. We should also anticipate future problems like possible delay in paying our bills to avoid spoiling our travel plans.
Hello Adeline,
Great outline of pros and cons.
I use the credit card on my trips for larger amounts (tickets, bigger purchases etc) or just keep it for an emergency and pay smaller amounts (a book, ice cream and a soda etc) in cash.
It is worth to check with your bank, if you can use your debit card outside the country to get cash in a bank machine. Cash withdraw fees on a debit card may be much lower than on a credit card. That’s why I always have my debit and my credit cards with me when I travel.
Yeah, bring credit card is the best way during traveling. But, I have bad experience about this, my credit score getting low due late payment to credit card company.
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Your blog is very impressive!!Nice post. This post is different from what I read on most blog. And it has so many valuable things to learn. Thank you for your sharing!
travel insurance
I like using credit card. There are many advantages to use credit card. Keep on going, my friend, I will
keep an eye on it.
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Twitter: iamjhoysi
says:
Owning one has pros and cons. Just make sure that you’ll be responsible enough to handle any future damage.
Twitter: RickyBernardin1
says:
it take a lot of self discipline to stay out of trouble from credit card debts. one should always remember “never spend beyond your means” =)
Twitter: fairygodbeauty
says:
Thanks for sharing this. Credit cards I think are great for emergencies only and for people who have strong self control.
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I don’t have credit card now. I cut it because I can’t stop myself purchasing something online or at the mall. Whew! Need to stop my addiction. Thanks for sharing.
Twitter: leirs
says:
i don’t have a credit card we decided to stay away from it. we decide not to have it so that we can live within our means
You definitely hit the nail on the head with this blog post. Using credit card has its pros and cons especially when traveling overseas.
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Thanks so much!
Twitter: ronniedare
says:
Using credit cards always have its pros and cons. Better use it wisely and properly.
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I see no any problem using credit card only if you can afford to pay it.. or lets say you have already gain your financial freedom.. you know, the feeling when u no longer needed your earnings today, because you have lots of SAVINGSES!
right?
Right you are, Janine. Credit cards should be more of a form of convenience payment where you have the cash but you just didn’t bring it with you that time. It shouldn’t be a means to pay for something that, without it, you wouldn’t be able to afford.
the more one can’t save if using credit card when traveling. but traveling is expensive, you need to save more money and use the credit card for emergency.
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Twitter: blogandme
says:
Credit card is good for traveling if you run out of money and only if you know how to control the spending .
A credit card has its specific purpose. Splurging on unnecessary purchases is not it but having it on standby for vital emergency expenses can be heaven-sent.
Twitter: jenaspacio
says:
These plastic things can be very practical. But it has some unspoken requirements and it is definitely not for those who do not have financial discipline. Always charge what you have already earned – my take on using credit cards. At least, that is what I do.
Quite right. Credit cards can be very handy, but you need to also be discipline that you don’t go overboard.
Twitter: mishidems
says:
As much as there’s convenience in having a credit card at hand, I’m partial to get one myself since I know I lot of people who got in trouble because they didn’t spend wisely. Also, it makes me think I won’t be able to save up.
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In my trips outside it is better to use credit card. Also, there is a rule that we can only bring as much cash outside or else it already money laundering. Lastly, it is hard to find money exchange stations abroad, more so when you needed it.
That’s a good point, Orly. Yes, there are restrictions with the amount of cash that you can bring in a certain country.
Twitter: tauyanm
says:
i agree with all of the above! you made the point of everything! though i don’t have credit i enjoy shopping with just cash every time hehe xx
For me, it’s always handy to have one. Kaya lang one needs to be responsible to have one of these.
Twitter: merlmd
says:
I learned my lesson the hard way…now I am down to only one and use it only for emergencies.
Be smart when using credit card of the country as the credit card company charges extremely high exchange rates on the transaction so always factor this in making buy or buy not decision. I use my card which can actually be charged with exact dollar amount and be paid in dollars so I can save on the forex losses.