The Best and Worst Ways to Pay for Travel
How you pay for travel matters almost as much as where you're going. Make the wrong choice and you'll hemorrhage money on fees, miss out on valuable rewards, or get stuck with unfavorable exchange rates. Make the right choice and you'll stretch your dollars further while earning points for future trips.
Here's what actually works—and what to avoid.
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The Best Ways to Pay for Travel
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The Worst Ways to Pay for Travel
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The Bottom Line
Travel Rewards Credit Cards
These cards typically offer 2-5x points on travel purchases, plus sign-up bonuses worth hundreds of dollars in free flights or hotel stays. Spend $5,000 on a card offering 3x points on travel, and you've earned 15,000 points—often enough for a domestic round-trip flight.
Most also waive foreign transaction fees, saving you 3% on every international purchase. The catch: pay off the balance monthly. Carrying a balance at 20% APR wipes out any rewards benefit instantly.
Hotel and Airline Loyalty Programs
Free nights and flights are real if you're strategic. Pick one or two hotel chains and airlines, then stick with them. Spreading loyalty across six programs means never accumulating enough points to matter.
Status tiers unlock real perks: free breakfast, room upgrades, priority boarding, free checked bags. Co-branded credit cards accelerate earnings—a Marriott card gives you points on every purchase, not just hotel stays.
Local ATMs for Currency Exchange
Airport currency exchange kiosks advertise "no commission" while offering exchange rates 10-15% worse than reality. That's highway robbery with a smile.
Use your debit card at a local ATM instead. You'll get the interbank exchange rate—the real rate banks use among themselves. Your bank will charge a small fee (typically $3-5 plus 1-3%), but that's far cheaper than exchange kiosks.
Pro tip: choose a bank that reimburses ATM fees, like Charles Schwab or Fidelity. And always decline "dynamic currency conversion"—choose local currency every time.
No Foreign Transaction Fee Credit Cards
Some cards charge 3% on foreign purchases. That's $30 per $1,000 spent—entirely avoidable.
Most travel-focused cards (Chase Sapphire, Capital One Venture, Bank of America Travel Rewards) skip this fee. Use these for everything abroad: hotels, restaurants, transit, tours. You'll save money and rack up rewards.
Digital Wallets
Apple Pay, Google Pay, and Samsung Pay add security—your actual card number never gets shared with merchants. They work internationally almost anywhere accepting contactless payments.
The limitation: not universal yet. Always carry a backup physical card.
Airport Currency Exchange Kiosks
Exchange rates here can be 10-15% worse than the interbank rate. On $500, that's a $75 loss compared to using an ATM. They're counting on rushed, tired travelers who don't know better.
Get a small amount from an airport ATM if needed, then find another ATM in town.
Credit Cards with Foreign Transaction Fees
Paying 3% extra on every purchase abroad means $150 lost on a $5,000 trip. Check your cards before traveling. If your primary card charges this fee, get one that doesn't.
Traveler's Checks
Useful in 1987, anachronistic today. Few places accept them, cashing them is inconvenient and expensive, and they offer no advantages over credit cards or ATM withdrawals. Credit cards provide better fraud protection anyway.
Buy Now, Pay Later Services for Travel
Services like Affirm and Klarna are dangerous for travel. They remove the psychological brake of "can I afford this?" and encourage overspending on trips financed at interest rates hitting 20-30%.
If you can't pay for the trip upfront or with a credit card you'll pay off quickly, you can't afford that trip right now.
Dynamic Currency Conversion
When paying abroad, merchants or ATMs might ask if you want charges in dollars instead of local currency. Sounds convenient. It's not.
Their conversion rate is terrible—often 5-7% worse than your card issuer charges. Always choose local currency and let your bank handle the conversion.
Prepaid Travel Cards
These charge upfront loading fees, monthly fees, ATM withdrawal fees, and offer worse exchange rates than good credit or debit cards. The few genuinely fee-free options have enough restrictions to make them less useful than using your regular cards wisely.
Smart payment strategy: use a no-foreign-transaction-fee credit card for most purchases, get cash from local ATMs when needed, and accumulate rewards through loyalty programs. Avoid airport exchanges, dynamic currency conversion, and anything charging extra fees for spending your own money.