As all travelers know, having a few credit cards, especially with reward programs, is a big boon, if not a must, for travelers. However, there are times in life when circumstances beyond one’s control severely impact one’s credit score, along with the ability to maintain the use of credit cards.
Credit scores have gone down in the past year. The average FICO score in the United States fell for the first time in over a decade due to the following reasons:
- High interest rates: High interest rates have made it more difficult for consumers to keep up with payments.
- Inflation: Inflation has hit lower-income households harder, causing them to spend down their savings.
- Missed payments: More people have missed payments on their credit cards and other debts.
- Debt levels: Consumer debt levels have risen.
- Closed accounts: Closed accounts or lower credit limits can also lower your score.
- Other factors include inaccurate information on your credit report and identity theft.
With lowered credit scores, obtaining credit cards with travel-worthy credit limits, terms, and conditions may not be easy. Once this happens, when the need for travel arises, one can be in a quandary of paying for flights, hotels, and other travel venues and services.
Here are some suggestions as to how to handle such a situation when faced with booking travel:
Traveling without a credit card is entirely possible with the right preparation and mindset. While credit cards offer convenience, rewards, and security, you can still explore the world using alternative payment methods. Here’s how to make it work:
1. Use a Debit Card with No Foreign Transaction Fees
A good debit card can serve as your primary payment method. Look for one that:
- Has low or no foreign transaction fees (Charles Schwab and Wise are good options).
- Offers fee-free ATM withdrawals or reimburses ATM fees.
- Has fraud protection similar to credit cards.
2. Carry a Mix of Cash in Different Currencies
- Always have some local currency for emergencies, especially in countries where cash is king.
- Exchange money at banks or reputable exchange offices rather than airports for better rates.
- Use money belts or hidden pouches to keep cash secure.
3. Use Prepaid Travel Cards
- These functions are like debit cards but allow you to load multiple currencies in advance.
- Providers like Revolut, Wise, and Travelex offer competitive exchange rates.
- Useful for budgeting since you can’t overspend.
4. Rely on Mobile Payment Apps
- Many countries accept Apple Pay, Google Pay, Venmo, PayPal, and WeChat Pay.
- Some mobile banking apps offer virtual debit cards for safer transactions.
5. Book Hotels and Flights with Debit or Alternative Methods
- Many airlines and hotels accept PayPal, direct bank transfers, or debit cards.
- Use booking sites like Airbnb, Booking.com, and Expedia, which often allow debit payments.
- Consider prepaid hotel reservations to avoid deposit holds on your card.
6. Rent Cars Without a Credit Card (Tricky but Possible)
- Some rental companies allow debit card payments with a hefty deposit and additional paperwork.
- Renting from local agencies rather than big chains may be more straightforward.
- An alternative is to rely on public transport, taxis, or rideshares like Uber and Lyft.
7. Use Budget-Friendly Travel Hacks
- Overland travel (buses, trains) usually accept cash or debit cards.
- Hostels, guesthouses, and Couchsurfing can reduce the need for deposits.
- Meal planning avoids constant ATM withdrawals.
8. Emergency Backup Plan
- It helps if you have a trusted friend or family member who can send you money via Western Union, MoneyGram, or PayPal.
- Keep a small stash of USD or Euros as emergency backup cash.
Traveling without a credit card requires more planning, a mix of payment methods, and financial discipline. But it’s doable! With the right debit card, mobile payment apps, and emergency cash, you can explore the world as freely as ever.
Is worldwide travel possible without a credit card? It would be difficult and require considerable time to figure out how to pay for travel services. In those cases, obtaining a prepaid credit card to add funds from a bank account as needed would be worthwhile. A prepaid credit card A prepaid credit card (often called a prepaid debit card or prepaid travel card) is a payment card that you load with money before using it. Unlike a regular credit card, it does not offer a credit line—you can only spend the amount you’ve preloaded onto the card.
During our travels, we use credit cards to pay for almost everything. However, from time to time, as in the case of booking directly through an owner we already know and trust, we may need to use a bank transfer or other means of transferring money outside the US.
Be well.
Photo from ten years ago today, January 30, 2015:
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