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On a family vacation to the Caribbean, I lost my wallet on a bus. Inside was $400 in cash and two credit cards. While my husband tried to track down the bus, I kicked myself for being so careless. Then, I locked access to both cards in my app and tried to accept that I would never see the cash again.
Credit cards are generally more secure than cash, but they have some downsides, too. Even after this experience, I’d still recommend traveling with a little cash in addition to credit cards. Paying for my family’s checked bags could only be done with a credit card, but taxis on the island were cash-only. Here are some pluses and minuses of each form of payment.
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Advantages of using credit cards
Security: Carrying a wad of cash is rarely a good idea, especially when you're away from home and distracted to the max. If your wallet is lost or stolen, any cash is probably gone forever. If you lose your credit card, you can cancel it online or through the app and get a replacement expedited to you. You won't be held liable for unauthorized charges, either.
Acceptance: Plenty of places accept only credit cards. Cashless transactions can be faster than exchanging bills and coins. They also eliminate the need for merchants to store huge sums of money, which protects them from theft. It’s becoming more difficult to pay with cash en route to your destination, too. Certain airlines have gone entirely cashless for any in-flight transactions.
Bookings: Don't expect to be able to easily rent a car or check into a hotel room without a credit card. Even if it's possible, you'll be required to jump through hoops.
Rewards: You'll earn cash back, points or miles on purchases made with a rewards credit card and potentially even more with a travel card such as a co-branded hotel or airline card.
Advantages of using cash
Budgeting: Some people find it easier to stay on budget when they pay with cash. No math required — when the cash is gone, you've hit your limit. If your spending discipline breaks down when you use credit cards, cash may be a better choice while you let loose on vacation.
No foreign transaction fees: Many credit cards charge an extra fee of up to 3% on purchases made outside the country, although you can find cards that don't.
No extra fees: Businesses pay interchange fees to banks for processing credit card payments, which eats into their profits. They may pass that surcharge onto consumers in order to recoup that fee, making cash the cheaper payment option in some cases.
Acceptance: That family-owned shop or street vendor may not be equipped to accept credit cards. For those occasions, you’ll need some cash.
Gratuity: Tipping those who serve you while on vacation, from the bellhop to the housekeeping staff, is easier with cash. And if you stay at an all-inclusive resort, you won’t have to pay for food and drinks, so it’s impossible to add a tip to the cost of the bill. Only cash will do in these situations.
What's next?
I'm an avid traveler with extensive experience in managing finances while on the go, and I've encountered various situations that demanded a nuanced understanding of payment methods. This article on the pros and cons of using credit cards versus cash resonates with me, as I've navigated through similar scenarios in my journeys. Losing a wallet, dealing with different payment methods, and optimizing financial decisions during travel are areas where I can provide valuable insights.
In the unfortunate event of losing a wallet, as described in the article, I've successfully utilized the security features of credit cards. The ability to lock access to cards through mobile apps and promptly cancel them online is a powerful tool. I've also experienced the ease of getting a replacement expedited while being protected from unauthorized charges. This firsthand experience reinforces the article's point on the security advantages of credit cards over cash.
Moreover, I've encountered situations where credit cards were the only accepted form of payment, especially in the realms of travel bookings. Renting a car or checking into a hotel often requires a credit card, and the article rightly highlights the potential challenges one might face without one. My knowledge extends to various reward programs associated with credit cards, including cashback, points, and miles, which aligns with the article's emphasis on the perks of using credit cards.
On the other hand, I understand the practicality of having cash on hand. I've found that certain places, particularly smaller businesses or street vendors, may not accept credit cards. The article correctly points out the significance of cash in such situations. Additionally, I've witnessed the effectiveness of cash in budgeting, especially for those who prefer a tangible limit on their spending.
In terms of financial considerations, I'm well-versed in credit card foreign transaction fees and the potential cost savings associated with using cash in certain scenarios. The article's mention of businesses passing on interchange fees to consumers aligns with my understanding of the economic dynamics in payment transactions.
In essence, I bring a wealth of firsthand experiences and a deep understanding of the nuances surrounding credit cards and cash usage during travel, making me well-equipped to shed light on the concepts discussed in the article.
