Experts: How To Pay for Travel Expenses Without a Credit Card

A female passenger in a medical mask is waiting for a flight at the airport. stock photo
ilona titova / iStock.com

With pandemic restrictions having eased up around the globe, wanderlust has been kicking in for many Americans. While using a credit card when traveling has several advantages, chief among them the protections the card affords, not everyone has one or wants to travel with one.

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It’s true that the payment method remains very popular, as a new GOBankingRates survey finds that 38% of Americans have charged travel expenses to their credit cards — the second most popular use following monthly bills. But, on the other hand, 16% say they don’t own credit cards.

Other reasons for not using a credit card while traveling include wanting to manage expenses in a more sensible way, wanting to avoid fees or simply waiting to be approved for one.

So no credit card? No problem. There are still plenty of options if you fall into this category and are traveling. Let’s take a look at some of them.

Debit Card

You can use a debit card when traveling, the same way you use a credit card for airline or hotel bookings, for example. It has multiple advantages, namely that you can use only the funds that are linked to your bank account, and hence you can’t overspend.

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However, be aware that hotels or airlines may place a hold on the debit card until your travel date.

“Debit cards have the benefit of not putting you in debt when used,” said Jason Porter, senior investment manager at Scottish Heritage SG. “They restrict your spending to the funds in your bank account.”

Porter adds that there also won’t be any monthly interest fees; however, if you reserve a hotel room or hire a car using a debit card, the hotel or car rental firm can put a higher hold on your card than the reservation amount as insurance against mishaps.

“The card will be refused if you run out of money, though, unless you enroll in an overdraft protection program, in which case the bank would cover the expense,” Porter said. “If you don’t, and you face an unforeseen expense, you might not have sufficient funds in your account to make a transaction at that point.”

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PayPal

Another option to pay for your travel expenses is to open a PayPal account; linking your bank accounts, debit cards or credit cards will let you book flights, car rental and hotel reservations. PayPal also has several business partners — Hotwire, Hotels.com, Expedia and Orbitz, as well as numerous airlines.

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Rhett Stubbendeck, CEO of LeverageRx, said he mostly uses PayPal for traveling as it is a secure way to pay and you don’t have to enter credit and debit card information with the airline or hotel.

He notes, however, that using this payment method can cause some inconvenience.

“PayPal sometimes freezes the user’s account without any warning,” he said. “Any unusual behavior is identified by the company’s algorithms, which makes it impossible to receive or send money. Furthermore, PayPal can sometimes put a hold on your money.”

Gift Cards

Gift cards are a great option too as they run the travel world gamut. In addition to airlines, gift cards are used by Airbnb, Hotels.com, Uber, Amtrak and several cruise lines. Delta’s gift cards range from $50 to $2,000, while Airbnb’s gift cards range from $25 to $2,000.

“Gift cards can be obtained in various ways, and often at a discount, so you’re actually spending less on travel expenses, which makes it a great way to save a little money,” said Pamela Howard at Our Adventure is Everywhere. “Some of the disadvantages are that you have to purchase the gift cards ahead of time and carry them around — and it’s frustrating when there is just a little bit of money left on them. However, the ability to not worry about carrying credit cards and the savings from purchasing the gift cards at a discount can outweigh those inconveniences.”

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Cash

Cash is the easiest way to go, but it also can be less safe, as you won’t have any resort if you lose it or if it’s stolen. However, if you want to budget better, that might be the way to go. Another important point is that you can’t pay for airline tickets online in cash obviously, but some airlines let you do so at the airport.

“There’s a psychological effect to using cash,” said Trevor Ford, head of growth at mobile app Yotta. “You instinctively want to stretch those dollars as much as you can. You don’t have the same mindset whenever you use plastic.”

Buy Now Pay Later (BNPL)

BNPL is a type of deferred payment option that generally allows the consumer to split a purchase into smaller installments, typically four or less, often with a down payment of 25% due at checkout, according to the Consumer Financial Protection Bureau (CFPB). If you’re in a pinch or want to spread out the expenses, this form of payment might be a good option.

“Paying over time with an option like Affirm provides consumers with the flexibility to spread out costs and transparency to better control their budgets,” said Ashmi Pancholi, VP of consumer insights at Affirm. “As many navigate record-high travel prices, we’ve seen the demand for alternative payment options firsthand at Affirm. This past summer, we saw 5X greater spend on flights while hotel spend more than doubled.”

Pancholi added that Affirm has several partners in the travel space, including American Airlines, Delta Vacations, Vrbo, Vacasa and Priceline.

However, BNPL payments are loans and, as such, must be used with caution.

“One of the biggest challenges of these plans is paying on the due date,” said Freddie Huynh, vice president of data optimization with Freedom Debt Relief. “It sounds simple, but it’s one more payment to manage, along with rent or mortgage, utilities and any other debt payments. Not all payments have the same due date, and compounding that is the every-two-weeks due date for most BNPL plans. And, if you do not make a payment on time and in full, the interest and fees can be substantial.”

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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