As much as we don't like credit card fees and interest rates, credit cards are key in helping your travel plans run smooth.
It is essential that you have a credit card for travel. You will be thankful that you paid in plastic rather than cash by the end of this story.
So we wanted to see how much more it would cost you to pay for your vacation and all your incidentals with a debit card vs. a credit card. For example, you are taking your family to Orlando for a four night spring getaway.
You book your vacation package online using your debit card. This vacation package includes hotel, airfare, and car rental, and you choose not to book any additional activities, theme park tickets or travel insurance.
Some people think travel insurance is a waste of money, but if you purchased your package with a debit card and your trip gets canceled you will have no repercussions to get your money back.
There are usually underlying terms in your credit card terms and conditions that cover travel expenses and what you can get reimbursed for should someone on the trip fall ill or injured.
On the day of the trip, you get to the airport and check your bags it costs you $100 one-way to check your family's luggage, which you pay for with you debit card. On the plane, your children decide they are hungry so you get a snack pack meal from the flight attendants you again, pay for it with your checking account debit card.
Upon landing you get your luggage and head to the rental car counter. You are told at the counter that since you are paying with a debit card the rental car company will need an additional deposit to cover the cost of incidentals over and above the cost of the car rental. This fee varies from car rental companies, but we have verified that it is in the $150-$250 range.
You are also advised that since you are paying with a debit card you will need to pay extra for their insurance, unless you know that your own personal car insurance covers damage and liability when you rent a car.
If your insurance does not, there goes another $100 for the car rental company insurance policy plan. Whereas almost all major credit cards have built in travel insurance that covers lost luggage reimbursement costs, car rental insurance and trip cancellation insurance.
You get all the paperwork squared away at the rental car company, and you are on your way to check into your moderately priced hotel room. Upon checking in you are told that since you paid with a debit card the hotel will need to hold an additional authorization amount on your debit card for incidentals.
Since you are staying at a moderately priced hotel, they are holding an additional $200 for the four nights over and above the rate of the hotel. This additional $200 is to cover the cost of incidentals such as breakfast, room service, phone calls or movies, should you choose to take advantage of these amenities. If you don't use any of these things the $200 will be released back to your checking account upon checkout.
Let me reiterate that's upon checkout! The hotel also only has valet parking at $20 a day. The hotel will hold an additional $80 for valet parking on your credit just in case you decide to park their rather than use a parking garage down the street. Upon checkout whatever amount you did not use for valet parking will be released back to your debit card account.
As of this moment, you are up to $738 in fees and purchases above what you paid for your vacation package. While you might get some of this money back it won't happen until you have returned home from your trip.
The next morning you start off to Disney and pay for parking and head to the ticket counter. You get to the ticket counter and try to purchase your 3 day with the Park Hopper option which will cost you just over $1,100. You purchase your tickets and you are on to a day of fun at Disney.
At lunch, you decide to take the family to a nice sit down restaurant inside the park. The bill comes and you pay for the $80 meal with your debit card. As the day goes on you buy trinkets and snacks for the kids and use your debit card for the purchases. You guys do this for another few days and have a great time.
Your trip draws to a close and you checkout with the hotel and settle the incidentals and parking and are told how much of the authorized money will be placed back into your checking account now you have checked out.
You get back to the airport car rental counter and turn in the car. The desk agent gives you your total bill and tells you that since you brought the car back full of gas, and you did not cause any damage to the car your deposit will be refunded back to your debit card account.
You go to the airline ticket counter and check your bags, and it costs $100 to check four bags back home. But one bag is overweight so you are surprised with a $150 overweight fee by the airline. You agree to pay this amount since you don't have time to unzip suitcases and shift around the extra weight into other bags. You swipe your debit card one last time on this vacation.
This is where everything goes bad.... you have overdrawn your account due to all the additional deposits that were held on your credit card.
Now depending on how your bank works, they could clear the biggest purchases first and leave all the little purchase to clear later or vice versa. While you are due to get over $400 back in deposits, they won't hit the bank for another few days.
When you arrive home you log on to your bank account and see the damage has been done. That $6 popcorn that you bought at Disney will now cost you a $35 overdraft fee and it just goes downhill from there and you find yourself with over $250 in overdraft fees.
Now you are kicking yourself for not having a credit card. And let's not even go into how dangerous it is to travel with debit cards if they get lost or stolen. Not only will your vacation be in jeopardy of being ruined, the person who stole it could run up huge charges and clean out your account within in minutes. Thus leaving you with any money to eat or to travel back home with, and even worse if you are overseas with no money.
While we hope this doesn't ever happen to anyone, it is possible, so be a smart traveler. Leave your debit card at home. Pay for your travel expenses with a credit card and know that your valuables and your family will be protected with a credit card.
