How to use a credit card wisely on your vacation

09.08.2010 In: Travel tips

Back in the good old days, you could find airfares for flights leaving the country for less than $200. Everyone paid by check or cash at the travel agency or airport ticket counter. You never saw a credit card, although some executives would occasionally flash their corporate American Express credit cards. That's all changed. Today's travelers gobble up frequent-use bonuses or air-mile perks like candy. But, you'll have to travel smart lest your margin for savings fly away quicker than a jumbo jet.

Here are key tips for the informed globetrotter:

Be Prepared

Not every credit card you carry today comes with the famous American Express promise of a one-day turnaround for stolen or lost cards. Therefore:

Use a different card on your trip than the one you use to pay your routine bills for house or rent payments, and utility bills. A fraud alert may freeze the account and you'll come home to dark house. Get a new card for the trip with a different account number. Write down all your account numbers and telephone reporting numbers and carry the list in a separate place than your card.

Carry a backup card in a different physical location (your luggage, carry-on bags, etc.) from the one you flash at overseas hotels and restaurants. Pickpockets are skilled wherever there are tourists.

Ask hotel clerks how much they plan on swiping against your card for incidentals and insurance. Be there when they process all your transactions.

Take Advantage of Free Services

Shop for flight or lodging bargains at partner websites of your lending company, or accept offers of concierge booking services offered by your credit card company if they can find you discount rates.

Use Affinity Programs Where They Make Good Sense

When you shop for travel perks or new cards, you're bound to encounter offers from lender and travel discount affinity programs. A one-time use of an affinity card can even award substantial savings. Use a preferred airline credit card in booking your flight and you might just get a free round trip out of the gate.

Lodging cards can land you room upgrades, resort privileges, or discounts on tours. And AAA-affiliated credit cards can cut the cost for lodging, attractions, dining, and more. The best kind of offer may be the 1-5 percent return you'll get if you can qualify for a cash back credit card. When lenders issue credit cards or frequent traveler offers, they don't know that you plan to use the card for a single trip and the perks that come along with it.

Use Zero-percent APR Credit Cards for Advanced Reservations on Last-Minute Bargains

If you're comfortable with a last-minute departure, you can round up great deals on discounted airline tickets and hotels that have unexpected vacancies. Surf daily bargains on Internet travel sites, pay immediately for them with a zero-percent card that won't present a balance until after you return, and retire the account when you get home on the cheap.

Bypass the Currency Exchange Merry-Go-Round

Since most foreign merchants readily accept American Express, MasterCard, Visa, and other common credit cards, why not take advantage of Pentagon Federal Credit Union and Capital One cards that don't charge foreign transaction fees? You might realize as much as a five-percent savings on your entire trip by avoiding the exchange cages, and most overseas hotels have digital kiosks where you can shift funds from savings to the credit card, extending your credit line for the rest of your trip.

Americans are becoming more frugal with their vacations during uneasy economic times. But we've adjusted to long lines at security, delays at the customs windows, and greater requirements for personal identification and security. Why not apply the same amount of caution in planning your vacation around lender offers and spending wisely through your credit cards during the trip to make the most of your hard-earned travel dollar?