How to Pay for Things in the USA Using a Card
You’ve got that epic holiday in the US planned.
Naturally, you want your money to go as far as possible.
This guide provides you with a thorough overview of how to pay for things in America so you know not just the ins and outs of the greenback but also how to get the best value during your time Stateside.
Paying for Things in the USA Using Cards
Paying for things in the US using a card is really easy and convenient. Broadly, there are 3 different types of cards you can use.
Unfortunately, there isn't one type that's the 'best'. It's really important to understand each type to work out which one will suit you best.
Prepaid Travel Money Cards
A great option that helps you lock in exchange rates when you convert Australian dollars to US dollars, a prepaid travel money card also helps you avoid currency conversion fees and (in some instances) international ATM withdrawal fees.
A particularly big advantage is the additional security measure; many prepaid travel cards come with backups or replacement options.
But while you’re saving on some fees, you’re paying extra on others, such as the initial load fee, reload fees, and inactivity fees. You also need to plan your spending habits effectively or you may find yourself with excess currency on the card at the end of your trip.
Major Australian banks and money exchange providers like Travelex offer prepaid travel money cards.
Debit Cards
Chances are you already have a debit card and use it every day so wouldn’t this be the easiest option?
Some debit cards, such as Citibank and ING, even waive currency conversion fees, international ATM fees, and account keeping fees (with some caveats), making them a no-brainer.
But these cards are still an exception. Most other bank cards apply often hefty overseas ATM withdrawal fees and currency conversion fees.
One of the best travel money cards for the US is the Wise Travel Card, which doesn’t have purchase, load, or reload fees and offers the same exchange rates as those you see on Google or XE.com.
Paying with a Credit Card in the US
Credit cards are popular in the US and are accepted by most retailers. You shouldn’t have any problems with Visa, Mastercard, American Express, or Diners Club.
You can even use contactless payments at larger establishments like Kmart, Target, and Walmart.
As with debit cards, most credit cards will incur a currency conversion fee of 2-3% when payments are made in US dollars. There are also high fees for withdrawing money from international ATMs, a pitfall we’ll look at in more detail below.
As with debit cards, most credit cards will incur a currency conversion fee of 2-3% when payments are made in US dollars. There are also high fees for withdrawing money from international ATMs, a pitfall we’ll look at in more detail below.
Still, there are several reasons why it might be handy to have a credit card with you, including:
- The additional security you get from rigorous anti-fraud measures.
- The card serves as a good backup in emergencies.
- Many credit cards provide travel insurance, sometimes eliminating the need to purchase your own.
- Many credit cards have reward systems tied to travel points, helping you save money for future travels.
Learn more: The Best Travel Credit Cards to Use Overseas
A Note on Dynamic Currency Conversion (DCC)
When paying with your debit or credit card in the US, you may be asked whether you’d prefer to be charged in Aussie dollars or the local currency.
This is a process called dynamic currency conversion (DCC) and is best avoided.
Foreign exchange rates offered by the retailer are likely to be worse than what your home bank provides.
Should You Use Cash or a Card When Visiting Amercia?
When you heading to the US, many experienced travellers use both cash and card.
The advantages of having both options are:
- With cash, you have a back up if you card doesn't work or is stolen
- With cards, you don't have to carry around larger amounts of banknotes
- The flexibility to choose which one will work best
Here is an example
Jason and Kate go out for dinner. They pay for their meal on a prepaid travel card and leave a tip using the cash that they have on hand.
The next day they realise that the balance of their prepaid travel card is really low so they use their debit card to withdrawal some money from an ATM before topping up their main card.
Using 2 Different Types of Card and Cash
A common mixture is to use a prepaid travel card for bigger expenses like accommodation, cash for meals, tours and tips and keeping a debit card kept with a passport as backup, just in case the other two options aren't available.
Is it better to use Cards or Cash in the US?
It really depends on the situation. Cards can be a more convenient for online purchases, accomodation and tours while cash is king in many places in the US. By carrying both, you can use the best option in each situation.
