Credit vs. Debit Cards for Travel

Debit cards are a popular method of payment for a reason: they offer quick access to cash and are as convenient to use as credit cards, and don't come with the added temptation to splurge on something frivolous. It's no wonder more people are using debit cards over credit cards now.

However, debit cards are not always the best choice, especially when traveling. Here are three reasons why credit cards can be the safer travel option.

1. Debit cards offer less protection if stolen or cloned.
If your credit card is stolen, you're only liable for a max of $50. That's it. You're out the cost of a nice dinner for one.

On the other hand, if you don't report debit card fraud in time you could be on the hook for everything.

According to Federal Trade Commission, you're liable for $500 if you find the fraud and report it within two business days after it happened. You could liable for everything if you don't catch the fraudulent activity and report it before the 60 day mark.

2. Debit card fraud could wipe out everything
This gets even worse if you have more than one account. "If someone gets access to your bank account through your debit or ATM card, they can wipe out your entire account," says Gail Cunningham, spokesperson for the National Foundation for Credit Counseling. "And even scarier, if you have that account associated with another account, say your savings account, so you never overdraw your checking account, it can just keep coming out."

3. You're making a big purchase -- and shipping it home.
If the item is lost, stolen or never arrives, you can contact your credit card company to cover the damages. American Express, for example, will repair, replace or reimburse for anything up to $1,000 per occurrence, up to $50,000 per account per year. Just make sure you find out the card provider's damage protection policy BEFORE going on your trip. That way, you can use the card with the best protections in mind.

We're not leaning entirely in favor of credit, though. Here are three situations in which debit could be the right choice.

1. You don't have access to credit.
Credit isn't always an option for everyone. Maybe you're maxed out, had your credit limits slashed or had a card canceled on you during the recession. Some of you may be too young to have a credit card now that requirements for getting one are stricter than ever for the younger set.

If this pushes you down the debit card path, make sure to sign for all your purchases instead of swiping and using your pin number to authorize the charge. That way, no one can look over your shoulder to steal your pin.

2. You're on a tight budget.
If you've overspent in the past, or just want to stick to a tighter budget, using a debit card can help. Once the money is used and gone, it's gone. The temptation to run up charges to your credit limit is gone when you realize you have to adhere to the specific number in your bank account (even if the $2,000 Italian leather jacket is awesome -- we bet you won't miss it when you get home).

3. You don't want to hold cash.
Being able to pull money out of an ATM means you're not carrying around a big wad of cash for your entire trip. Plus, ATM cards can give you favorable currency exchange rates if you're traveling overseas.

Our suggestion if you are going to bring your debit card when you travel: lock it up when not in use. If your room doesn't have a safe, ask for it to be locked in the hotel's safe.

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