Credit Cards Beat Cash When You Travel

/ BY / Credit Cards

When you’re planning a trip within this country or to another country, one of the biggest concerns is how you’re going to pay for your meals, lodging, transportation, etc. Traveler’s checks used to be the norm, but these aren’t accepted many places anymore. So your choices today are generally limited to credit cards or cash that you have either exchanged or withdrawn from a foreign ATM.

Credit cards

Most travelers will automatically use credit cards for lodging, meals or big purchases. You’ll usually need a credit card to make a reservation at a hotel (especially if you ask for guaranteed late arrival).

If you’re traveling out of the country, credit cards provide the best rate of exchange (the interbank exchange rate)—better than the rate you’ll get when exchanging your cash for the foreign currency. 

Another good thing about credit cards is that you have some protection if your card is stolen and used illegally. As long as you report the loss immediately, you won’t be liable for charges made after your card is lost. Most credit card companies will also issue a replacement card quickly, so your vacation won’t be ruined.

Paying by credit card can also help you track expenses, which is particularly important if you’re traveling for business.

In addition, credit cards could help you pay for your next trip. If you have a rewards card, the points or the airline miles are likely to add up quickly with your travel spending.

Although most credit cards still charge a foreign transaction fee (usually 1 percent to 3 percent of the purchase), there are many that do not. Cards issued by Capital One and Discover do not carry that foreign transaction fees. Do some research before you go, and if your credit card company hasn’t waived those fees, consider applying for a card that has.

If you’re traveling to Europe, you will want to check that your credit card works with the chip and pin system that most merchants use overseas. Many banks will provide a chip and pin credit card if you ask far enough in advance.


Even if you plan on using credit cards for most transactions, there will be some times when you need cash—for gratuities for hotels, for example, or to make small purchases from vendors. Just remember, however, that if your cash is lost or stolen it’s unlikely that you’ll get it back.

ATMs are the best way to get cash you need for your daily needs, because the exchange rate for ATM transactions is generally better than the rate you’d get for exchanging cash.  

You will usually have to pay some sort of charge for each withdrawal, however, and the amount you can withdraw each day may be limited.  Some banks charge a flat fee, some a percentage of the transaction and some a combination of both.  Check with your bank to see if they offer any options to limit those costs. Don’t forget that the foreign bank that owns the ATM from which you’re withdrawing money may also charge a fee.

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Please note your financial situation is unique and our tips & advice presented here may not be appropriate for your situation. recommends that you seek different advice & opinions from your own accountant or financial adviser who understands your individual circumstances before making any important decisions or implementing any financial strategy.