Paying with credit card while on vacation

Cost-Efficient Vacation: Use Your Credit Card


7 May,2013

When I travel, I like to use my credit card. Credit cards are great for travel because they come with a certain level of fraud liability protection. Plus, they can be used almost anywhere you go, and they are very convenient.

On top of that, when you plan your credit card use just right, you can end up with a vacation that is more cost-efficient than you imagined.

Using Your Credit Card on Vacation

One of the ways to get the most out of your credit card is to spend using your rewards card. You rack up the rewards, and then, as long as you pay off the card each month before you start accruing interest, you don’t have to worry about extra charges.

This principle can work on vacation as well. Save up the amount of money you will need to take your trip, and put it in a high-yield savings account. Now, while you are on vacation, use your credit card for everything. This can be especially effective if you have a cash back rewards card. You can earn cash back for vacation spending that would have been part of your summer anyway.

If you have a card with rotating cash back categories, your vacation can be a great time to boost your reward earnings in certain categories. Make sure that you log into your account before you go and activate your quarterly cash back bonus. Depending on the categories, you can really clean up. If one of the cash back categories during your vacation is gas, and you are on a road trip, your gas purchases will earn you 5% cash back, instead of the regular 1%. If you know the bonus categories, you can take advantage of them while you are on the road.

Even if you don’t have a cash back credit card, you can use credit rewards to your advantage on vacation. My parents regularly use their Marriott card, since they stay at Marriott properties regularly. They earn free nights faster, and on a trip to England a couple of years ago they were able to stay for free because of the rewards they had earned. If you are a traveler who uses a single hotel chain a lot, or prefers a specific airline, you can boost your rewards faster with a connected credit card. This can help you when you go on vacation to get a portion of your vacation for free.

Don’t Overspend

It’s tempting to go wild while on vacation and overspend. It’s important that you don’t, though. You want to make sure that you stay within your vacation budget. You don’t want to carry a balance on your credit card and get stuck with expensive interest charges. Also, be aware of how using your credit card in another country can affect your bottom line. Many cards charge foreign transaction fees. Hopefully, the rewards you earn while on your trip will at least offset the cost of the foreign fees.

With a little planning, your credit card can be a great asset on vacation, protecting your funds and allowing you to earn enough in rewards to offset some of the costs.

image credit: