Do you use a credit card? Why or why not?
Do you use a credit card? Why or why not?
I know this might just reflect financial culture differences across countries, but let's give it a try
Edit: as a clarification, I meant credit card compared to debit, not to cash
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US here. Yes, I use it for everything that I can because:
- rewards
- better fraud protection
- features, like no foreign transaction fees
- delayed payment, meaning my money can earn interest
- build credit
I haven't used a debit card in years (though I have two), and I haven't regularly used cash pretty much ever (though I carry some). I actually have like 10 credit cards, though I only regularly use 2.
If I had to pay extra to use credit, I would probably use it a lot less.
No foreign transaction fees? Could you expand on that?
Most cards charge a fee for any transactions outside your economic zone, e.g. the US and a Canada are separate economic zones, whereas much of the EU is one economic zone. Usually these fees are 3-5%, and sometimes there's also a currency conversion fee, but usually just the foreign transaction fee.
I'm in the US, so if I travel to any other country, I'd have to pay that fee. It turns out that some online retailers also charge this fee, such as Fanatical, even if the price is listed in dollars. My wife likes to order things intentionally, so we're careful about which card we use.
Most travel credit cards and some others have no or reduced foreign transaction fees, whereas most debit cards don't (Schwab and Fidelity in the US offer no foreign transaction fee cards in the US). For example, the a Capital One Quicksilver offers 1.5% cash back and no foreign transaction fees, and my Fidelity Visa offers 2% cash back and a 1% foreign transaction fee.
We like to visit Canada and my wife's home country, so we have some no foreign transaction fees hanging around that we bring on those trips. The rest of our cards all charge 3%.
Schwab’s Investor checking is a god send if you’re traveling to a country that deals largely in cash transactions.
The refund any and all transaction and conversion fees for ATM withdraws which can be egregious for visitors to some countries.
That way you don’t have to carry around gobs of cash your whole trip…
Fidelity largely does the same. So if you already have a Fidelity account, don't bother making a Schwab account, just get their debit card (make sure it's a Cash Management account though).