Are credit or debit cards better for vacation?

Going on vacation this between now and Labor Day?

The easiest way to pay for it is to swipe your credit card, and deal with the bill next month.

If you are at the beach, or especially a pricey place like Disney World, swiping a credit card for everything is fast and convenient.

But a report in Yahoo news says it comes with both pros and cons.

The Advantages

Advantages of using a credit card for travel include:

  • You get rewards points.
  • You can easily rent a car, with no cash hold.
  • You can hold a hotel room with no down payment.
  • You usually get protection for lost luggage or a fender bender.

Disadvantages

But the disadvantages include:

  • A huge credit card bill when you get home.
  • A 20% or higher interest rate if you don't pay off the trip right away.
  • You are tempted to overspend.

With a credit card, as opposed to debit, its so easy to spend more on trinkets, drinks, and meals than you should.

If you do, you may say "Doesn't that stink?"

The movie The Hangover may not be the only hangover coming out of Las Vegas.

So Should You Say Charge It?

Money experts say a credit card is much safer to use than debit when you travel, because theres no risk of a thief draining your bank account.

But Yahoo says a credit card vacation can give you a cash hangover, and end up costing you much more than a debit card vacation.    

Bottom line:  If you can pay off your credit card each month, it's a safe way to spend while you travel, and in many cases you get to build up rewards points.

But if it costs you even more down the road, then you may want to consider cash or debit (or old fashioned Travelers Checks) for part of the trip, so you don't waste your money.

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