Pro's and Con's of using cash versus credit card?
 

Our Italy trip is about 3 weeks away and I am starting to get everything ready.

Since we are renting mostly apts, we generally pay with cash upon arrival. We are moving throughout Italy and staying in 7 different places (the last being in Dublin, Ireland). I started looking at making sure we have the cash upon arrival at each destination which got me thinking about whether or not it just might be better to pay with a credit card. What are you thoughts?

I like that if I pay with cash, the transaction is completed and I will not come home to a bill on my card. I also think that it "may" help us to stay within our budget (or not). Then again, I worry that perhaps neither one of the ATM cards will work (happened in LIsbon) and we will be w/o any $ . I also don't like to have too much cash on hand. Then again, if I pay with the credit card, will I have to pay extra $ for the conversion? Isn't it like 3 % or is that no longer the case?

I like cash because it helps me stay on budget and I don't have to worry about whether some place takes credit cards. I use credit cards for hotels, rental cars, larger purchases, etc. I always stash a couple hundred dollars someplace so that if ATM cards don't work, I can exchange some cash to hold me over until I figure it out.

If you've read about the conversion fees for foreign transactions, you should know that it depends on your particular card, so you have to look up your own terms to find out what it is.

I can think of no advantage to using cash for large purchases, but I don't have any budget or spending issues as you do. I don't spend or not spend money based on whether it is cash or a credit card, that logic doesn't even make sense to me as it is your money either way. But I guess some people have problems with that, and if you are even thinking that way, you must be a person who has spending problems. So in your case, it sounds like you should use cash if you really somehow spend money you don't have if it's a credit card.

I have a credit card with no fees, but another one with only 2 pct, and either way, it makes more sense to me to charge things as I get 1 pct cash back on my card for every purchase, and I like documenting the bills and paying once. I do use cash for piddly little things, of course, and often you have to.

Where are you getting your cash??? In my case, I get charged the same foreign transaction fee and the same exchange rate on my ATM/Debit Card whether I'm getting cash or "charging" something.

I charge everything I can & save my cash for emergencies & when I'm just purchasing little stuff. I also like to have a record of where & what I spend at different types of places in Europe.

Stu Dudley

In the grand scheme of things there is little difference between using cash (withdrawn in euro from an ATM) and a purchase using a credit card.

Given that you'll throw a couple of euros here and there for gelato, coffee, wine, a taxi or some lousy souvenirs it'll all come out in the wash.

I like to use credit card when possible for larger purchases and cash for miscellaneous items.

I agree with Stu - I like the larger expenses on a card to keep a comfortable cash flow in case of emergency.

November Moon, it looks like we are on the same page with our thinking. I guess I will just have to find out what my cc fees would be. Since I get miles for my purchases, it may be in my best interest to use the cc for my larger purchases like you mentioned.

Christina, hmmm, how should I put this! How on earth did you get the idea that I obviously have spending issues from my one line about staying within my budget. I doubt there are very many people who have no budget whatsoever, but you must have hit the lottery or something. Nevertheless, if I happen to not make my budget, trust me, it is not because I have spending issues. I am probably one of the most well managed people around. I am not independently wealthy by any means, but manage my money so well that I am able to take my entire family on trips becuase of this. So instead of making personal assumptions about ones financial status, try just answering the question.

Stu and J62, thank you. We get our $ from ATM's so if the fee is the same than I guess it is a moot point. I guess for a "pro", I won't have to carry around a lot of cash and wonder if the ATM's will work, but the con is I won't receive any miles.

namaka,
I use my credit card for everything possible because there is no added fee and I'm always trying to earn miles for my next vacation!
Like others have said, I do always have some cash on me though for small purchases and places that don't take cash.
If I have euros left over when I get home, I save them for my next trip (sometimes that's an advantage and sometimes it's not all depending on the exchange value at the time)
Have a wonderful trip!!

I don't understand where Christina got that idea either, but I was in Italy in December/January and paid for whatever I could on my Capital One card and yes, it was easier when I got home to really know what I spent. My bank charges me a $5 foreign transaction fee each time I take out cash so it was a bit less expensive as well. Moreover, we were traveling as a group of four with separate budgets, so it was quite easy for all of us (longtime family and friends) to settle up afterwards because we had all charged most everything and had our cc bills to which we could refer. Doesn't sound this applies to you though.

We paid for our apartment and incidentals in cash.

Have a great trip!

sheri_lp and Bettina222, thank you for your responses.

I think we will definitely use the cc for the apts and other large purchases and save the cash. That actually puts me more at ease about the ATMs not working, and having to carry a lot of cash everytime we change cities. And the plus side is I will get the miles.

Leely2, It's good to know that I wasn't the only one who thought that response was out of line.

We won't be taking cash from our cc, but rather our checking acct. so we won't have to worry about that particular fee. I will just have to double-check on exactly what the fees will be for charges on my cc. Either way, we will make it work!

Thanks for all the helpful responses! : )

Hi Leely,
Don't mean to hijack this thread, but did you get my recent email? I'd love to hear from you. EJ

Namaka: we use a combination of credit card (no fee) and cash, like most people. Just seems easier to keep track of expenses post-trip. Enjoy.

I think the cash versus credit really comes down to how you personally like to manage your money. At home we use cash for a lot of things too. When we are travelling, we have a daily budget and when we pull out cash, we know we have X number of days' worth of expenses in our hand and can choose cheap or more pricey meals etc. accordingly.

If our income was larger, then maybe we wouldn't be as careful with our budget (at home and travelling), but as it is, we've got to be frugal if we are going to be able to do the things we want to.

November moon, that is the case with us also. If I wasn't fairly frugal, we could never afford to take our children on trips like this. I usually use cash like you, but am going to try to use the cc for some of the apts so I don't have to worry about carrying around so much cash. And while we do have a budget, we still are able to do the things we want to do and buy (within reason) things we want to buy. We are not big foodies and can save a lot of $ on eating simple take away meals, or eating in the apt and then eating in nice restaurants every couple of days.

I have an ATM checking account, and a credit card I use just for travel. Any problems and they can be shut down without bothering my real life. It's good to keep track of travel expenses too. I always carry a bit of local cash, and a back up credit card. Keeps the money belt to a minimum. No worries.

Would folks mind sharing what credit cards they use that don't charge fee. We just returned from a month in Australia and I'm still trying to figure it out. Used Capitol One Visa, and American Express. The AMEX seems to have charged 2% on top, but haven't seen if Capitol One does. In Australia many places charged an added up to 2.5-3%if you paid by credit card, but I couldn't figure out if I'd pay that to convert to cash anyway.....
Thanks

marshacarlin: we used our Schwab Visa card (2% cash back) and Schwab ATM card exclusively this trip. They refund any fees that banks might impose at ATM machines and rebate 2% on all credit card purchases (at home and abroad).
I know from prior experience that Capital One does not charge additional fees. Bank of America (for ATM withdrawals) did inform me that they are now assessing a transaction fee (maybe 2%, I don't remember) on ATM withdrawals, which is new since they did not last year. EJ

I use cash in restaurants or small things (ice cream, museum passes, etc). I use the credit card for just about anything else although I do use cash for B&Bs. The only downside to cash would be if you want to track what you did spend on restos (easily) or remember two weeks after you got home... "where did we eat again?".