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A debit card offers a convenient way to access money when you're traveling, whether you're on a Greek getaway or a Rocky Mountains ski trip. Using a debit card while traveling may not be the best option, however, due to limitations in fraud protection and the potential for fees. Let's review the pros and cons of using a debit card for travel, and we'll also go over the best practices for using a debit card when you're on a personal or business trip.
Advantages of Using a Debit Card for Travel
Using a debit card for travel provides some advantages. Here are four ways that using a debit card while traveling might pay off.
Fraud Protection
If your debit card is lost or stolen, your bank may let you immediately lock the card through its mobile app or website. This can offer some protection against fraud as you work with your bank to cancel and replace the lost or stolen card.
Furthermore, as long as you report your card lost or stolen before unauthorized transactions happen, your liability for that activity is $0.
Helps You Avoid Carrying Cash
If you stick to strictly using a debit card for in-person transactions, you can avoid carrying cash. This can eliminate the chance that your cash is lost or stolen.
Lost cash is much harder to recover from than fraudulent use of your debit card, which may simply require a call to your bank to put a stop to. If cash goes missing while you're traveling abroad, there's a slim likelihood that you'll ever see it again.
Ability to Track Spending
Using a debit card while traveling gives you an edge when it comes to tracking your spending. While you're able to monitor debit card transactions through your bank account, you might lose track of the amount of cash you're spending.
ATM Access
Let's say you stuffed some cash in your wallet or purse before heading off on your trip. But what if that cash runs out? If you're carrying a debit card, you can replenish your cash supply by making an ATM withdrawal—just be sure to monitor those ATM fees.
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Drawbacks of Using a Debit Card for Travel
Here are three major drawbacks of using a debit card for travel.
Foreign Transaction Fees
If you're traveling outside the U.S., your bank might hit you with a foreign transaction fee when you use a debit card at a merchant or ATM. Foreign transaction fees generally range from 1% to 3% of the amount of an in-person purchase or ATM withdrawal. In addition, an ATM operator might charge its own fee for using one of its machines.
Limited Fraud Protection
Unfortunately, the fraud protection for a debit card that's lost or stolen while traveling may be limited. Under federal law, the maximum loss is typically as follows:
- $0 if you report your debit card was lost or stolen before any unauthorized transactions are made.
- $50 if you report a debit card lost or stolen within two business days of learning about the loss or theft.
- $500 for unauthorized transactions when you report a lost or stolen debit card more than two business days after learning of the loss or theft, but within 60 days after unauthorized transactions show up on our bank statement.
- Unlimited if you wait more than 60 days to report the fraudulent transactions.
By contrast, a credit card may offer more robust fraud protection. For example, a credit card issuer can freeze transactions they deem questionable. Money for a questionable debit card transaction might still be subtracted from your account, however, and it might be tough to get your money back.
Lack of Rewards
In many cases, debit cards don't offer rewards—such as airline miles or hotel points—for travel-related transactions. For instance, you might not score any rewards when you pay for a hotel stay with a debit card. Rewards debit cards do exist, but they may offer more limited rewards structures than you can get with a credit card.
If you're hoping to earn rewards when you travel, getting a travel rewards credit card that doesn't charge foreign transaction fees may be a better option than using a debit card. Experian can help you find travel rewards credit cards matched to your credit profile.
Best Practices for Debit Card Use While Traveling
To make the most of using a debit card while you're traveling, follow these tips:
- Notify the debit card issuer before traveling abroad. Otherwise, if the card issuer detects potentially fraudulent activity, it might temporarily block access to your card until it sorts out the issue.
- Be on the lookout for thieves. Pickpockets typically target people they peg as visitors. So, when you're traveling, make your debit card as pickpocket-proof as you can by keeping it in a pocket inside a jacket, for example, or stashing it in a money belt. Also, don't use a backpack or purse that enables easy access to your wallet.
- Keep an eye on your account. Be sure to monitor your account for potentially fraudulent activity as well as for fraud alerts from your financial institution. Consider signing up for free credit monitoring from Experian.
- Set transaction alerts. Aside from regularly monitoring your account, you might look into creating alerts to notify you when any debit card transactions are made.
- Bring a backup payment method. In case something happens to your debit card, pack at least one alternate payment method, such as a credit card. Of course, you might also bring a credit card or another payment method—and leave the debit card at home—if a debit card isn't in the cards for your travel plans.
The Bottom Line
A debit card can be a useful tool when you're traveling, but it might not offer the same protections, rewards and perks that a credit card does, especially if you're traveling internationally. If you do travel with a debit card, alert your bank before heading overseas and consider packing a backup payment method in case you lose the card.