Credit card or cash when traveling: Which is best?
As you plan your next trip, you may be asking, “Should I use cash or credit when traveling?” Using a credit card can be more convenient, but there may be times when cash is your only option. Having a mix of the two could help you stay prepared.
What you’ll learn:
- Credit cards are accepted in many parts of the world.
- Some credit cards offer travel-related insurance and other protections.
- Having access to cash while you travel can help if credit cards aren’t accepted.
- Some credit card issuers charge a fee for purchases made in another country.
When you might want to use a credit card
Here are some situations where a credit card comes in handy:
- Reserving hotels: Many hotels require a credit or debit card for reservations and incidental charges.
- Renting a car: Rental companies may ask for additional information, or might even need to run a credit check, if you try to pay another way.
- Booking flights and travel: Using a credit card can allow you to book online and in advance. Even when paying in person, some airlines no longer accept cash.
- Making daily purchases: Paying with a card for meals, shopping and excursions can help you avoid carrying large amounts of cash—not to mention access to rewards and other benefits.
Benefits of using a credit card when traveling
Regardless of the situation, you might want to pay with a credit card because of the perks and protections. Benefits vary by card, but might include:
- Rewards: Earn cash back or other types of rewards on your purchases.
- Potential to build credit: Using your card responsibly can help you establish a positive credit history.
- Travel-related protections: Get built-in coverage, such as travel accident or rental car insurance, when using an eligible card to book.
- Security features: Many cards offer security features that can help protect your account. For example, Capital One lets you lock your card online to stop it from being used, and unlock it just as easily.
- Fraud coverage: If your card is lost or stolen, you may not have to pay for purchases you didn’t make. Some financial institutions, including Capital One, offer $0 liability for unauthorized card charges.
When you might want to use cash
Credit cards can offer you benefits, flexibility and protection. But during your travels, there may be times when merchants don’t accept card payments. That might be the case when you pay:
- Tips
- Local guides
- Street merchants
- Small businesses
Is it better to use a credit card or cash abroad?
When traveling in a foreign country, it’s often easier and more secure to pay with a card. But cash also has its place. When you’re far from home, you may not be able to use your card in all situations. Having some cash along with your credit card could make sure you avoid situations where you don’t have the ability to pay.
Many credit cards are widely accepted in foreign countries—from France and Mexico to more remote destinations. But there are a few things to keep in mind when using a credit card internationally. For instance, some card issuers charge foreign transaction fees, while others, like Capital One, never do. View important terms and disclosures.
Credit card or cash when traveling FAQ
Still have questions about whether to use cash or a credit card on your trip? Here are answers to common questions to help you decide and understand more about currency exchanges:
What is the best way to pay when traveling?
It depends. Some vendors don’t accept credit cards, so you might need to use cash in those situations. But if you have a card that offers protections and perks, it might make the most sense to use that when you’re able.
Should you exchange money before you travel internationally?
Looking at currency exchange rates before you depart can help you get the best value for U.S. dollars. If you don’t want to carry cash on your flight, you may be able to get local currency at your destination airport, from either an ATM or an exchange office.
Do credit cards automatically convert currency?
When you make a purchase in another country, many credit cards will convert the transaction to U.S. dollars, while some may charge in the local currency.
Key takeaways: Credit card or cash when traveling
With the right credit card, you could earn rewards for your purchases and have peace of mind if your card is lost or stolen. But during your trip, there may be times when it’s useful to have cash on hand.
Considering a new travel card for your next trip? See if you’re guaranteed to be approved for a Capital One card before you accept.
