How to keep Vacation Costs down on your Credit Card
For millions of Americans every year, vacation is the one time they look forward to more than any other. You don’t have the shopping and the hype associated with Christmas, and it gives you a chance to take a much needed break away from your job for just a few days. So it shouldn’t come as any surprise that vacations are like toxic waste to your credit cards. More than any other single event in the yearly calendar, vacations bring out the “justifications.”
- “I worked hard all year, yea, let’s fly first class.”
- “I just finished that big time project, let’s upgrade our hotel room.”
- “Let’s order room service, we deserve it!”
It doesn’t take a rocket scientist to see how vacations can be a huge problem when it comes to managing your credit card debt. People feel an overwhelming urge to splurge on vacation, and while you can’t argue the fact that everyone needs pampering now and then, it is possible to get through your vacation rested, relaxed and in good financial shape, too. Let’s take a look at how this is possible.
If you have pinched your pennies and saved your dimes enough to afford a trip overseas, you might want to take an hour or so to research how your cards handle exchange rates. Every credit card company from Visa to MasterCard to Discover handle how they process exchange rates and foreign purchases differently. You also don’t want to rely too much on one single card, especially if you are headed to a non-Western destination like Africa or the Middle East. You might end up with a card that isn’t even accepted in the areas in which you are visiting. Ironically, the card that has become one of the most useful on an international scale is American Express. This is especially true for cities in Africa. Discover, on the other hand, is not accepted on nearly the scale of their competitors. Call your card company first before you jet away to your exotic locale. Much like the boy scouts, the saying, “Be Prepared” should be on the lips of every vacation traveler.
Working hand in hand with knowing how your card company calculates foreign currencies is also knowing if your card company charges extra fees to be used outside of the United States. Remember, you don’t have to go to Europe or Asia to be in a foreign country. Millions of Americans every year take trips to Mexico, the Bahamas or Bermuda, and end up gouged because they use their credit cards. One of the most common fees, and this is especially true with debit cards that have credit card logos on them, is using the card for a cash advance abroad. The card company will grant it, but you might need another vacation when you realize what the finance charge was. The best thing you can do is to call your card company directly and ask for a full disclosure of international or foreign usage fees. Every company out there works in a different way, so just because your friend had a Visa card and didn’t get dinged doesn’t mean that your Visa card won’t. This can be a time consuming process if you have 4 or 5 cards since card companies love to keep you on hold until you are old and grey, but you will be happy you took the extra time when you get home from your vacation.
One of the biggest worries for most people when they go on vacation is theft prevention. No one wants to have their fun ruined by an opportunistic thief who decides to take advantage of a few lost tourists. The farther away from home people get, the more worried they usually become about losing their cash and credit cards. That’s why so many folks rely on credit cards on vacation. Not only are they accepted pretty much everywhere, especially if you are headed to a tourist-friendly area, but if you lose your card or it is stolen, a simple phone call cancels it and you don’t have to pay for any additional usage that you didn’t authorize. You don’t get that guarantee with cash. But what many people don’t realize is that the 1-800 number that is on the back of every credit card may not work once you leave the United States. It is an excellent idea to call your credit card company and ask them for international help numbers. This can save you if your purse or wallet is stolen when visiting exotic ports of call abroad, but also because many folks don’t give a second thought to the fact that they need a contact number written down in a separate place. Most people just imagine that if they lose their card, they will call the number on the back, but if your card was just stolen and you haven’t committed the number to memory, you don’t have a number to call. That’s why it might be a good idea to write down the international help line number several times, putting one copy in your suitcase, one in your wallet and another in a purse, that way, if one or two things get lost or stolen, you still have a number written down in a safe place. It may sound like overkill, or even paranoia, but if you do fall victim to theft, you will have erred on the side of caution.
Going hand and hand with calling your card company to get international help numbers is simply notifying your card company that you are going on vacation and that charges may start to appear from that destination. Thousands of innocent tourists have had their vacations destroyed by over zealous credit card companies who suddenly cancel a card out of the blue because they see what they believe to be “suspicious” behavior on your credit card account. Most card companies will call you before they cancel your card outright, but don’t rely on them, take the initiative yourself. This is especially true if you plan on using your debit card on vacation. Even if you aren’t planning on leaving the country, if you live on the East Coast and you are headed to Arizona, give a call to your bank and let them know you are going or you might find yourself with no way to access your accounts once you leave home.
The world of the Internet has completely changed how we keep our credit card information secure. We watch the sites we shop on to make sure they have encrypted connections and we scour our statements every month to make sure no one made off with our numbers. But the Internet can actually play a vital role in keeping your card information safe and easily retrievable in case of an emergency. If you have an account that you know is completely secure and you will be staying in an area that has a reliable Internet connection, you can store your card numbers in these accounts in case your cards get stolen and you need the numbers. Very few people have their card numbers memorized, so it is unreasonable to think that you would know them off of the top of your head, especially if you have 3, 4 or even 5 cards. By having secure copies of your numbers written down in a place no one else can get them, you could be saving lots of time with your credit card company if your cards get stolen. Your card company may still let you use your number once your card is stolen when you are on vacation since they know there are extenuating circumstances. You would simply report the card stolen, explain the situation and the card company would either let you make pre-approved transactions on your card or they might issue you a temporary card number just so you can finish your vacation. Many card companies have places abroad where you could pick up a temporary card, or one might be couriered to you.
Most folks who use more than one card have a primary card that they know has a better rate or better rewards and they use that as their number one choice every time. But funny things can happen when you go on vacation and sometimes, credit card companies can make mistakes and shut down your card if they believe the transactions that are coming through are a sign that your card has been stolen. That’s why it is always a good idea to bring two cards with you on vacation. If something should happen to one, you will always have another to count on. But be warned, this can bite you, as well. By taking even more of your credit on vacation with you, people do tend to spend more. Try to set up a rule or a boundary that says the second card is only for an emergency situation. You’ll thank yourself once you get home.
When it comes to the eternal question of cash over credit, most people take the side of credit when it comes to vacation. There is just something about the fact that you don’t have to fork over fistfuls of green that allows you to enjoy your vacation just a little bit more than you would otherwise. But it is this same simplistic attitude that leads to people seriously overextending themselves when it comes to vacations. Another simple thing that people tend to forget is to check their available balances and their expiration dates. We should all receive new credit cards in the mail as the expiration date approaches on the card that we have, but let’s face it, the US Postal Service has been known to misplace a letter or two, especially those that appear to be carrying credit cards inside. If you asked them, most people couldn’t tell you the expiration date on their credit cards and sometimes, it can sneak right up on you. It would be a nightmarish situation to leave on your two week vacation only to realize the card you were planning on using the entire time is worthless. Call your card companies and find out your entire available balance and verify your expiration dates. You don’t want to be walking around with a card that has an expiration date of 10/07, only to realize that an overworked and underpaid Visa employee typed in 01/07 into their computer, making your card worthless.
It shouldn’t come as any surprise to anyone that merchants and criminals alike love taking advantage of tourists on vacation. The thing that many people don’t know is that if you are traveling abroad for your vacation, you do not have the same rights to protest an inaccurate charge as you do within the US. That is why it is absolutely vital that you keep your credit card and register receipts for EVERYTHING that you do on vacation. This is good advice even if you aren’t planning on leaving the US on your trip. Keep the receipts for everything and then compare them to your next month’s credit card bill and make sure someone didn’t type in an extra zero on the keypad.
If you traveled internationally, you also want to keep an eye on the exchange rate you get. While there shouldn’t be any problems with inaccurate rates, it is always a good idea to hand onto the receipts to see what was what. If nothing else, it can give you a good idea of what card to use next time you leave the country if one card gave you substantially better rates than other.
If you have picked out a far away location for your vacation that is in a foreign country, you will want to be extra careful with your credit card usage. There are several traps that you can fall into. A recent spate of stories has hit the airwaves in recent years of merchants putting credit card logo stickers in their front windows to get American or Western tourists in through the front door, but then when it comes time to pay the bill, either they openly admit that the stickers were frauds, or they have a convenient excuse like the card machine is broken or the local phone lines or down. It is hard to tell if the merchant is being honest and is genuinely sorry that you were misled or if it was an actual straight lie, but either way, it is a good policy to verify with the merchant before you dine or browse that they do, in fact, take the credit card the sticker in the window claims they do.
One of the reasons why credit cards have become such an important part of vacationing is the fact that they are needed to hold things like rental cars, hotel rooms and even reservations at fancy restaurants. You are required to bring the card with you to verify your reservation. But by using a credit card to hold these various parts of your vacation, the specter of double billing is a constant possibility. For those folks that have paid down their credit cards just enough so they can enjoy their vacation, a double bill on a rental car or on their hotel room can literally spell the end of their vacation in a heartbeat. Most card companies have become sympathetic to double billing issues and will take immediate steps to solve the situation, but you should not count on the card company to come to the rescue. Ask your rental car company and your hotel if they already charged you. Most times, double charges are simply careless workers not paying attention to what they are doing.
Many people choose to use their credit cards when they are on vacation because, often times, cards provide some of the best exchange rates on purchases. But when you dine at a restaurant or you use your card anywhere where a blank “tip” line is left on your receipt, you need to make sure you fill it out. Even if you pay your tip in cash, or if the service was terrible and you feel that no tip was deserved, make sure you write in that line “no tip” or “tip on table” so that an unscrupulous waiter cannot fill it out for you. Many credit card companies have different rules when it comes to challenging transactions that happen overseas, as opposed to ones that happen in the USA. Make sure you are covered each time, every time, by filling out the tip line on your credit and debit receipts.
While it can be next to impossible to challenge fraudulent charges made abroad, in some cases, you can’t challenge them at all. Many cruise lines have special insurance you can buy that will cover purchases in case what you buy turns out to be a lemon. If you are going on a cruise, many companies have lists of vendors to shop at and vendors that have a reputation for ripping off gullible tourists in every port of call you will be visiting. You can either get a list, or at the very least some suggestions, from the concierge on your ship, or from your cruise line’s website or customer service number. You might also want to call your credit card company directly and ask them what their rules are on the cruise ship itself and what their rules are in the various countries you are planning to visit. Don’t ever assume you will be protected when you travel outside the USA.
Our next tip is one that would seem to be common sense to most people. Make sure you have a secure place to store your cards when you are out and about. If you are not planning on carrying your cards when you leave your hotel room, either use the room safe, or an even better idea, use the hotel safe at the front desk. Even if you are not staying in a 5 star luxury palace, your hotel should have a secure area to store valuable. When out and about, carry your wallet in your front pocket and always make sure you have a firm grasp on your purse. That way, robberies are almost impossible.
One of the many aspects of the United States banking and credit system that is unique is that the same system that is used to process credit card transactions is used for debit card transactions. That is why your debit card has a Visa or MasterCard logo on it. Even though the money is deducted from your checking or savings account like it were a check, the transaction is processed like you had been using a credit card. When you leave the United States, telling someone that your card that has a Visa or MasterCard logo is a debit card and not a credit card will only serve to confuse the merchant you are trying to buy from. Your ATM card/debit card is a credit card when you leave the United States, so if you go to use your debit card while on vacation outside of the US, just say you will be paying with credit.
Traveling and paying with your debit card abroad should be a fairly easy process, assuming you only use it as a credit card and avoid ATM machines. This is especially true if you are traveling abroad. The transaction fees for international withdrawals, even if you are only going to Canada, is around $6 USD. If you travel to more remote locals, the withdrawal fee can be even higher. Call your bank and find out what their policy is. Some banks go back and forth between charging you a percentage of what you are withdrawing and a flat fee. If you have a debit card through a regional credit union or a local bank, the fees may be even higher.
Some banks partner with international banks to lessen the fee impact on their customers. You can find out if your bank has a partner in the country you are traveling to. This can reduce or even eliminate fees altogether.
Almost all ATM cards have a limit that you can withdrawal in one day. In most banks, depending on the account you have, that limit is around $600.00. The reason why limits like this exist is to prevent the theft of an ATM card and the subsequent emptying of a customer’s entire bank account. It is also an ATM preservation measure. Banks would likely be filling up ATM machines several times a day if people could withdrawal whatever they wanted. Make sure you are able to work within your limit, you don’t want to be stuck on vacation and in need of some quick cash and not be able to get what you need.
If your bank doesn’t partner with any international banks, make sure you use common sense when picking out an ATM to use. Try to always go with ones maintained by major local banks, not independent ones that look a bit suspicious. There have been reported cases of these individually owned ATMs recording people’s numbers and PINs and passing that information on to people who then try to steal your identity, or at the very least your bank balance.
A final tip is to make sure you analyze your bank statement after you come home from vacation. An ATM card, even one with a credit card logo, tends to be less secure than an actual credit card. If you had a fancy night out and drank a little too much local wine, some restaurants are notorious for charging extra on your card since they realize you are a tourist and you will be miles away before you realize the problem. Save every receipt and scour your statements in the months following your trip.