Vacation money: Pay with cash or credit card?

by Kristina on July 30, 2014 · 7 comments

vacation money

Good morning Dinks.  I’m fresh off my vacation from NYC and I can’t stop thinking about how our money habits change while we are on vacation.  Do your money habits change while you are travelling.  I am not only talking about spending money, but how you actually manage your money.

I will be the first to admit that I spend money on things while on vacation that I normally wouldn’t spend money on; but that may be because when I’m on vacation in the United States I can find so many products that are not available in Canada.  So spending aside, does the way you manage your money change when you go on vacation?

Avoid using your credit card to prevent fraud

It has never happened to me but I’m sure absolute panic must take over if your credit card is declined while on vacation.  Although having a VISA, MasterCard or American Express that is accepted worldwide is very convenient the truth is we don’t know much about the risks when using our credit cards abroad.

I am not sure if the likelihood of credit card fraud is higher in foreign countries but I do know it will be a lot easier to address fraudulent charges and visit your bank branch when you are at home.  I don’t like to use my credit card while travelling for this particular reason, I also don’t want any surprises on my next statement due to foreign exchange rates.

Save on extra ATM fees

I hate paying bank fees.  I will do anything to avoid paying $2 in ATM charges to take out cash.  I usually never carry cash because I never remember where I spent it and therefore I always use my debit card whenever possible, but this is at home.

When I’m travelling and need cash ATM fees can quickly add up. I was once charged $2 by a bank for being a non-client and using their ATM.  I was then charged $5 by my own bank for taking money out abroad.  That was an unpleasant surprise.  My advice is to call your bank before you travel to find out if any additional ATM fees apply while travelling.

Carrying cash in convenient but it comes with risks

I am thankful that I have banking in the United States so I was able to use my Debit VISA card where ever we went.  Unfortunately my friends didn’t have this luxury.  One of my friends hit up the ATM twice during our four day long weekend in NYC and my second friend brought over $500 in cash on the trip.

It’s definitely convenient to carry cash while travelling abroad because you just never know if merchants accept debit or credit cards and it helps avoid paying any additional ATM fees.  However there is definitely a risk involved when carrying cash.  My friend didn’t want to leave her extra money in the hotel room in case it was stolen so she carried the wad of cash on her the whole time.  If you have a lot of cash on you there is always a risk that you can lose your wallet or get robbed.

When you are on vacation do you prefer to pay with cash or credit?

Photo from Flickr

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{ 3 comments… read them below or add one }

1 Brock @cleverdude July 30, 2014 at 8:24 am

I used to be a “cash only” guy on Vacation…but I found that I started to wonder where my money went. So, now I carry cash for incidental expenses, but use a single credit card for major expenses (hotels, food, gas, etc). That way I can accurately track how my vacation spending breaks down (categories, total, etc).

2 Kathy July 30, 2014 at 9:30 am

We pay for hotel, air fare etc. with credit. Usually we calculate how much we think we’ll spend on food and incidentals and take cash for that. When we get home, the money is always sitting in the checking account waiting for the credit card bill to arrive and it is paid in full then.

3 chris a July 30, 2014 at 7:49 pm

A note about using cards overseas. With chip & pin technology your fraud risk is lower abroad then it is here in the U.S. We should see this technology late next year. In any case, if you carry multiple cards just in case, dealing with a blocked card is much easier than dealing with lost or stolen cash.

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