Should I Use Cash, a Debit Card or a Credit Card While on Vacation?

Traveling doesn’t come cheap, and part of keeping your finances intact during vacation includes knowing the best way to pay for your purchases during your getaway. Should you primarily use cash, a debit card or a credit card?

Let’s take a look at the pros and cons of each choice so you can make an informed decision during your vacation.

Using cash on vacation

Cash may be going out of style, but it’s still the preferred method of payment for some travelers. 

First, cash works anywhere. It’s also easy to stick to a budget when you’re only using cash. Also, cash is easy to use to pay for small purchases when on vacation.

On the flip side, cash is not the most convenient to lug around. You’ll also need to decide how much cash you need for your vacation before leaving home, because you may not find an ATM that’s connected to your credit union while you’re on vacation. Finally, cash always carries a risk of loss or theft. 

Using a debit card on vacation

Your debit card may be your go-to method of payment at all times, but should it be your number-one choice while on vacation? 

First, let’s take a look at the good news. Your debit card rarely carries any surcharges or merchant fees, and the money comes directly out of your checking account, so there will be no surprise bills waiting for you when you return home. Tracking your spending is easy, with account statements available on your financial institution’s website or app.

The bad news is, your debit card does not come with robust purchase protection and there’s generally no way to walk back a purchase. Also, your particular card may not be accepted at every vendor. 

Using credit cards on vacation

Credit cards are generally the recommended choice of payment method to use when traveling.

First, credit cards offer unparalleled security with fraud protection and the ability to dispute charges. Also, many credit cards offer travel-related perks for purchases, which can include travel insurance, rental car coverage and access to airport lounges. Finally, when traveling internationally, credit cards often provide competitive exchange rates compared to currency exchange kiosks. 

Unfortunately, credit card use does have some downsides for vacationers. Using your credit card when vacationing can trigger overspending, leaving you with a nightmare bill to pay off when you return home, often with interest charges as well. Last, some credit cards have foreign transaction fees, which can add up to a significant amount over the course of your trip.

Cash, debit or credit? It’s a tough decision, but with all the pros and cons of each choice laid out for you, you can make a responsible choice for your vacation.