Hello fellow travelers!
Navigating travel using only a debit card is something that has only popped up a few times in my tenure as a travel agent. However, when that is the case for one of my clients, it takes a big perspective shift for planning their trip.
Right off the bat, I’m inclined to discourage it altogether, just because of how finicky a lot of major companies are about them now. However, for whatever personal reasons, if you’re unable to obtain a credit card or you’ve got a strong thing against credit cards, here are the things you should know prior to your trip. And for all of you readers, I only recommend people use credit cards for if they can pay them off completely monthly. More on that another time.
Let’s start with the biggest ticket items first. Keep in mind, my goal this whole time is to help you live your best life abroad without having a crucial amount of money on hold in your checking account while doing so.
HOTELS: When you check in at a hotel, they will almost always take an authorization hold on your card – sometimes up to 25% of your whole stay’s cost. This is to make sure you can cover any incidental costs you incur. This authorization will always fall off 2-3 days after check out. HOWEVER, when this authorization hold is on your debit card, that amount of dollars in your checking account is not going to be usable until the bank releases the hold. Summary: If you’re ballin’ on a budget and don’t keep a good chunk of backup money in your checking account, this could be a problem while abroad if you planned to use that $200 on food, activities, etc.
TIPS TO PREPARE: Calculate 25% of your hotel stay prior to your trip and leave that as “untouchable” money in your checking account.
RENTAL CARS: Prior to choosing a rental car company, read the specific location’s debit card policy. Some rental car companies won’t accept debit cards at all; some will take a WILD amount as an authorization hold; some will ask for a cash deposit, ranging from ~$100 up to the entire rental amount; and some will need to run a credit check on you when you pick up the car. The companies are worried about having full coverage if something were to happen to the car. When they swipe your credit card, they know they can get the money from you or whichever bank you are getting credit from. With a debit card, the rental company is trusting the driver to have enough cash to cover the worst possible thing that could happen to the car (I’m talkin’ thousands $$$). Like hotels, this authorization hold is released after the trip.
TIPS TO PREPARE: Call the specific location (i.e. Budget Rental Car at Reykjavik Airport) and ask about their debit card policy prior to traveling. The worst thing is to be surprised by a request for a $300 cash deposit on your first day of a trip!
PRE-PAID VISA: I get asked about this a lot by those who are traveling with debit only. Will hotels & rental car companies accept a pre-paid VISA?
- Hotels – Upon reserving and checking in to the hotel, the property will likely need a card that has your name on it, matching your ID (i.e. your debit card). However, you can almost always use that VISA gift card to make a payment on the room upon arrival, as if you were paying in cash. Keep in mind, that they will still likely need to take an authorization hold on your personal card.
- Rental cars – Similar to hotels, you can pay with a pre-paid VISA at the end of the rental. They will still need to see your personal card to hold for authorization upon picking up the car.
BRAND OF DEBIT CARD: You should have no problem using your debit card internationally as long as it has a globally accepted brand listed on it, i.e. VISA or Mastercard.
TIPS TO PREPARE: Ask your bank if their debit cards are globally accepted.
FOREIGN TRANSACTION FEES: Be aware of any foreign transaction fees that your bank will charge when using your debit card internationally. This would be charged on all transactions, including ATM withdrawals.
TIPS TO PREPARE: If you’re planning way ahead, find a bank that charges zero international transaction fees!
BACK UP PLAN / THEFT: If someone steals your debit card while abroad, know who you are going to call and what your backup plan is going to be. If this is your only access to your bank account while abroad (ahh, my anxiety is rising just writing this), make sure you know your bank’s customer service number, hours, and plan for emergencies like this.
I will update this post as I learn more on the topic!
Your travel advocate,