Credit card or changing money to travel. Which is better?
One of the most frequently asked questions when planning a vacation outside our country is whether we should use a credit card or exchange money to travel. In this article, we tell you which of these options suits you best.
The answer to this question depends on a few factors, such as the country you are traveling to, the amount of money you plan to spend, and the benefits and rates your credit card offers. Generally speaking, both alternatives have their merits, but if your goal is to minimize costs, credit cards usually offer more benefits.
Advantages of using a credit card over exchanging money on your trips
Better exchange rates
Credit cards generally offer more competitive exchange rates compared to currency exchanges at exchange houses or banks. Financial institutions and exchange houses typically add a significant margin to their rates, while credit card companies charge rates closer to market value.
Safety and convenience
Using a credit card is safer than carrying large amounts of cash. In case of loss or theft, you can easily block your card and protect your funds. Additionally, many cards offer travel assistance services and fraud insurance, adding an extra layer of security during your travels.
Carrying all your cash can be risky because, in addition to the fact that you must keep it in a safe place, or carry it with you all the time, if you lose it, you have no way of recovering it.
Useful tip: if you choose to carry a credit card for your trip, you must carry at least two, so that in case of loss, you have a spare to protect yourself.
Rewards and benefits when using your card
Many credit cards offer rewards programs, such as airline miles, points on purchases, and access to airport lounges. These benefits also make your life easier by making traveling not only more economical but also more enjoyable.
Expense history control
However, with a credit card, it is easier for you to spend because you don’t see the money running out. If you can see on your statement exactly what you spent, then you have control over what you paid for. With cash, you have a clear limit on how much money you can spend, but you can easily lose control and end the trip without the budget you had planned.
The world accepts less and less cash
Although here in Colombia many places still do not accept cards to make small transactions such as paying for lunch or a public transport ticket, in other parts, especially in Europe, the trend is that cash is being accepted less and less.
Some exceptions to keep in mind
Although we live in an increasingly technological world, it is important to keep in mind that countries like Germany or Italy tend to prefer cash on some occasions, For example, you must have cash to pay for public bathrooms, lockers, etc. food at street kiosks, subway passages, etc.
When I travel abroad, how do I keep my money?
It is highly likely that upon entering nations like the United States or the European Union, you will be asked for the financial support necessary for you to enjoy your trip, though this does not always happen. People frequently display cash, but you can also display the balances on your debit and credit cards. See if you can obtain the quota certificate from your financial institution, which you can print and store if needed.
What currency should I choose when making the card transaction?
On many occasions, when you pay with a credit or debit card, the machine asks in which currency you want to make the transaction. For a better economy, we recommend that you always choose to pay in local currency, This way, the bank makes a single transaction, charging you less than if you chose the currency of your card.
Important: check your card rates
Many cards charge fees for international transactions, so it is very important that when you decide to travel with your credit card, you know what amounts are charged by your financial institution to avoid surprises
Carry a percentage of cash
Even if you decide to pay for your trip with credit cards, we recommend that you carry a percentage of cash that can be useful in times when the card does not work or there is no service.
The best way to save on a trip is to insure it
For travelers looking to minimize their expenses, using a credit card is generally the best option. It offers more favorable exchange rates, greater security, additional benefits, and lower hidden costs compared to exchanging cash. However, we know that many unexpected events can happen on a trip and some are not so good. That is why you must insure your trip and avoid headaches.
An insurance policy can offer you comprehensive medical assistance if you get sick or suffer an accident, help for lost luggage or flight cancellations, compensation for delays, and other protections.
