Do you need a credit card to travel?
While you don't need a credit card for your upcoming vacation, using one for your purchases may provide benefits and can eliminate some of the hassles associated with travel. A travel credit card can be particularly useful on vacation and may give cardmembers travel benefits including rewards, travel insurance and no foreign transaction fees.
Benefits of using a credit card for travel
A credit card can make spending easier and provide convenient protection when you travel.
Potential extra rewards
Credit cards such as general travel, hotel and airline cards give cardmembers extra points and miles for travel-related purchases. If you use a credit card affiliated with a hotel or airline, you may receive bonus points or miles for airfare or a hotel stay with the associated chain. Many travel credit cards also give cardmembers extra points for other travel purchases, such as car rentals and dining.
Travel insurance
Trip delays, cancellations and emergencies can turn travel into a nightmare. Many travel credit cards come with travel protection to help with unexpected problems that may arise during your trip. Some insurance perks can include:
- Trip delay coverage
- Trip cancellation coverage
- Lost baggage coverage
- Car rental insurance
- Emergency assistance
No foreign transaction fees
When traveling to a foreign country, you might run into foreign transaction fees. A foreign transaction fee is an added charge to every purchase you make abroad. These fees are typically around three percent (3%), and while that may not seem like a large percentage, your foreign transaction fees can add up over the duration of your trip.
There are many travel credit cards that don't charge foreign transaction fees when you're traveling overseas. Having a card without this fee will make your trip a lot less expensive.
No need to convert currency
By using a credit card, you'll have the added convenience of not having to switch to the local currency. This takes away the hassle of deciding on how much money you should convert before traveling.
Easy to use for hotel charges
When booking a hotel stay, many hotels may consider debit cards to be riskier than credit cards. Regardless of the type of card you use to check in, a hold will be placed on the card. This hold acts as a security deposit to cover the cost of your stay and, sometimes, extra fees.
If you use a credit card to check in, the hold will appear as a charge that will be taken off your account. When using a debit card to book your hotel stay, the hotel will usually take the money out of your account right away. You may not be able to access these deposit funds until the hold is lifted, which can take days or weeks.
Extra travel perks
With a travel credit card, you might have access to extra perks that are designed to give cardmembers added convenience while on vacation, including:
- Annual travel credit
- Airport or hotel lounge access
- Priority boarding
- Free checked bag
- In-flight discounts
- TSA PreCheck®/Global Entry application fee credit
- Room upgrades
- Early check-in and late checkout
- Complimentary breakfast
- Free in-room Wi-Fi
- Free hotel night on your account anniversary
Convenience
Using a credit card when abroad is much easier than carrying a wad of cash around in your pocket. Cash can be easier to misplace and gives you the extra hassle of converting currencies.
Protection from fraud
When using your credit card or debit card, fraud protection can play an important role in securing your money and account. If your credit card is lost or stolen, you won't lose your real money and can easily contact your issuer to cancel your card. With fraud protection, you won't be held responsible for unauthorized charges made with your card or account information. You can also temporarily lock and unlock your credit or debit card if you misplace it or suspect fraud.
What to remember when using a credit card for travel
Give your credit card issuer a travel notice
Before you go away on vacation, you can notify your credit card company of your travels. When you spend money abroad without setting a travel notice, your credit card company may suspect these purchases as fraud and decline your transactions. Giving your issuer a travel notice can help you avoid this hassle. You can set a travel notice online, on the phone or in person.
Stay within your budget
While using a credit card on vacation, it can be tempting to spend more than you can afford. Overspending with a credit card is a common pitfall and can lead to debt that may take years to pay off. Sticking to a budget during your travels can keep you from racking up a high credit card bill.
