Cashless transactions are growing significantly on a global level. Countries like South Korea are leading the change with 77 percent of its citizens preferring cashless payments. Even those that are slower in adoption are already seeing a big uptick, with the Philippines seeing 33 percent of its citizens leaning towards cashless payments. With how feasible it is to get a credit card now or set up a digital wallet, it’s worth considering how practical this is when going on a trip around the world. As global travel continues to grow in the wake of the pandemic, let’s take a look at the pros and cons of travelling with a credit card.
Before we get started, please subscribe for new Adventures from Elle. 🙂
What’s Inside
Pros of Taking a Credit Card When Traveling
1. Preventing Fraud
Credit cards actually protect you from fraudulent activity, especially compared to debit transactions. Cards have many security measures embedded now, and issuers will help you deal with fraudulent transactions right away. These also won’t immediately be deducted from your bank account if you can dispute them.
2. Avoiding Theft
Credit cards can be kept in less obvious places more easily, so you’re not such an easy target for experienced pickpockets. When you’re travelling with tons of gear, you can safely store your credit card and keep it close to you without the same heft and easy accessibility of cash.
3. Lightening Your Load
It’s easy to accumulate tons of stuff when you’re travelling, which is a real pain not just on flights but also just strolling around different places. Get rid of bulk change and heavy, space-taking cash by using a credit card. It’s light enough that it never even has to leave your person, which is helpful considering how lost luggage surged by 67 per cent in 2022.
4. Getting Better Exchange Rates
Exchange rates are a constant factor when travelling across different countries, and credit cards simply have better rates than what you’d find at an ATM or money exchange. That extra bit of savings can do a lot when you’re on a prolonged trip.
5. Accessing Insurance
A big benefit to using a credit card is the insurance it usually comes with. Although this depends on the card you’re using, it can be a helpful layer of protection when you’re in unfamiliar lands. Make sure to check your statement or contact your bank to find out for sure.
6. Earning Rewards Points
Most credit card offers will come with rewards programs these days. It’s just an added perk to be able to earn rewards while making transactions you would have done anyway. If you get enough miles or accommodation points, this could even contribute to your ongoing trip.
7. Removing the Downsides of ATMs
ATMS are useful, but also get used by tons of people, have steep international fees, and have a high risk of theft and fraud. In the US, card skimming frauds have grown a whopping 700 percent. There’s even a chance it could eat your card. If you go cashless and use credit for your transactions, you don’t need to worry about these issues.
8. Eliminating the Need for Cash Withdrawal
Withdrawing cash can be a troublesome process, especially when you need the amount right away and find yourself with no place to cash out. Even if you budget well, unexpected purchases and prices can happen. It’s just easier to have a card ready to go.
Cons of Taking a Credit Card When Traveling
9. It Will Hurt Your Credit if Unchecked
A comprehensive guide on hard and soft credit checks discusses how individuals can request soft credit checks as much as they like without it impacting their credit score. This can be an essential step in monitoring your usage and ensuring that you are not missing any payments. If you simply ignore your payables, you can end up hurting your credit score. Jamaicans, you can access your credit score online for free too at Credit Info Jamaica.
10. Cards May Not Be Accepted Everywhere
Just because cashless is growing, doesn’t mean that every place has the capacity to read credit cards. After all, only 20 countries have reached credit card penetration that’s more than 50 per cent. If you’re looking to explore smaller towns or isolated islands, you’ll have a hard time finding services or places that accept anything other than cash.
11. Can Make Budgeting Harder
You need to save for travel, even as you continue on your trip. Budgeting cash is much easier as you immediately have a visual and tactile guide of what you have on hand. Tracking expenses can be trickier when you’re using a card, with a tendency to overspend.
12. Could Lead to Too Many Debts
Paying within your means is fine, but it can be troublesome when you keep using your card and end up accruing a ton of debt. This will give you a harder time in the long run if things start piling up. Make sure you still stick to a limit when using credit.
13. Can Come With Added Fees
Foreign transactions have fees added when charging your card. You can expect lower rates at one per cent, whereas some cards will be charged up to three per cent. Those added fees are also on top of the existing fees that Mastercard and Visa issue.
14. Might Get Flagged By Card Issuer
If you aren’t able to inform your card issuer that you are going to be travelling around the world, then any transactions you make may be flagged as fraudulent. Although this could easily be cleared up with a phone call, you still have to face the hassle of that back-and-forth and even run the risk of getting your card locked.
15. Can Be a Data Risk
Not every transaction is secure. If you’re not careful, you may end up giving up your valuable data just because you’re trying to use your credit card. Even information as simple as your name can be very valuable, so a measure of care must be taken when choosing where to swipe.
Wrap Up
Going with or without a credit card is simply a matter of practicality. If the option is available to you, you may want to bring both cash and a credit card. However, it also comes down to preference as long as you keep the pros and cons in mind. Share, pin and bookmark this article for later. Lastly, remember to subscribe by email for new posts on Adventures from Elle.
‘Til next time.
Find Elle on Facebook, Pinterest, Instagram and YouTube.
Leave a Reply