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Cash or credit card?

I'm planning a trip to Paris and Barcelona and I'm wondering about the best way to pay for meals and drinks as I go. Using my North American credit card will be the most convenient for me but does it make any difference to the restauranteur/ boulanger? I would prefer not to carry a lot of Euros while sightseeing, but if I stop into a pastry shop for a snack, it seems silly to use a card. What's common practice?

Posted by
3580 posts

I use cash for most purchases, including meals. Often I have paid my hotels in cash. My credit card was compromised twice in Europe, so I quit using it so much. Carrying cash in a money belt feels secure enough to me. I just take out enough for a day and carry that on my wallet. When I find a bank where I can withdraw fee-free cash, I take out a bunch so I always have plenty. The trick is to use it up mostly before returning home. I will return home with about 20 € or £. This trip I am using my credit card for hotels so I can add to my frequent-flyer miles.

Posted by
5654 posts

Some businesses have a strong preference for cash. The first and most obvious reason is that credit card transactions cost the business money. A small business owner here in the States told me that the mileage program cards cost him, the merchant, more than the no-benefit cards. Some one pays for that transaction cost whether the merchant passes it on with higher prices. take a cut in their profit or both.

The second reason why some businesses, especially small businesses without internal audit controls, prefer cash is that credit card transactions leave a paper trail. Some merchants don't want their government knowing their business.

A possible third reason is potential fraud, but that said, here in the States businesses loose more in bad checks than credit card fraud.

By the way, if you do use credit cards for meals, wait staff prefer cash tips, partly for one of the above reasons and partly because some restaurant owners may not pass the credit card tips on to the staff.

Posted by
8946 posts

I use my magnetic strip credit card or debit card every chance I get when traveling and it's rarely an issue when making purchases. Some merchants have an 8 euro minimum, but other than that credit cards are usually accepted no problem. Just got back from 10 days in Nice and Amsterdam, and no shop clerk gave me a hassle about my plastic.

Posted by
2788 posts

I have gone to Europe every summer for 12 of the last 13 years and am going again in June. I can count on both hands (less than 11) the number of times, total, that we have used a credit card in Europe. At a couple of hotels when we could not get into desirable B&Bs and once to buy a rug in Turkey. We always take two debit cards from different financial institutions tied to checking accounts using one as a back up incase anything goes wrong with the first one - only happened once. We also take two credit cards also from different financial institutions with one also used as a back up. We get local currency once we land in Europe from bank connected ATMs that are all over the place these days using our primary debit card. We withdraw the maximum allowed amount, to save on the 1% transaction fees that my credit union charges, and put it into a zippered chest pocket until we can immediately find a safe place to put the money into our money belts. During each morning we take that days spending money out of our money belt and put it into my zippered chest pocket. Otherwise, we pay cash for almost everything especially since more and more smaller establishments do not accept CCs. You should check out "Travel Tips - Money" elsewhere on RS web site to get his take on these issues. I will be going to Paris on June 12/13. Might just see you there. Happy travels.

Posted by
5297 posts

My habits have changed over 15 years, back then it was nearly always cash...hotels, meals, sites, tickets...but over the years, I have moved more and more to credit cards, and it is just not me, Europeans in general use cards more and more.

It does vary by country and locale as well as the type of business and amount of transaction, but generally:

In cities (London especially, Berlin, Rome) cards are accepted much more readily for all but the smallest transactions. Smaller towns less so, except well touristed areas take whatever you have. For Barcelona and Paris, unless you stay in a very low cost hotel, use your card. A meal in a fancier restaurant, especially if the bill will be over 30 euro, a card will work well. Small mom and pop places, a bakery/coffee shop, or if the total is under 30 euro, then I usually always pay cash.

Posted by
16860 posts

You will be much more prepared and flexible if you do have cash ready, as well as a credit card. Let's say €50 in your wallet and more hidden under your clothes in your money belt. If you take out €400 from an ATM and don't spend it very quickly, because your did use your card, then that's fewer ATM stops for you.

Posted by
5654 posts

Even if you use cash for most of your transactions credit cards are a useful cash management tool. If you are running short cash use plastic for the bigger bills (hotels, dinners) until you get to a preferred cash machine.

I usually settle hotel bills with a credit card. If I have too much local currency at the end of a trip, pay with cash or a cash/credit card mix.

And keep a pocket of coins of the proper denomination for the local WCs.

Posted by
796 posts

We just carry cash. Shops and places to eat and sightseeing locations love it and some don't accept cards. It's easy to run up a lot of expenses on a card one small transaction at a time.

Posted by
11263 posts

One factor to consider is the foreign transaction fees on your various cards. Until a few weeks ago, my credit card charged 3%, while my ATM card charged nothing (for cash withdrawals from ATM's). So, I got out cash for everything, and used my credit card only as backup. I now have a Capital One credit card which has no FTF's, so I anticipate using that much more.

Some hotels will give a discount for cash, and some are cash only. And you've already been told about how some stores only take cash or have a minimum purchase for cards. Other than these situations, and my point above about fees, it's as much about your preference as any "right" or "wrong" way.

Posted by
5654 posts

Re: ...foreign transaction fees on your various cards. Until a few weeks ago, my credit card charged 3%....

Some credit cards are better than others regarding the foreign transaction fee. Capital One has been one of the better converting at pretty close to interbank rate without a mark up.

http://www.capitalone.com/credit-cards/faq/

Traveling outside the country Will Capital One charge me a fee if I
use my credit card overseas? Capital One does not charge a fee for
using your credit card for foreign currency transactions. Foreign
purchases will be converted at the foreign exchange rate in effect at
the time of processing the charge.

Posted by
3533 posts

I agree with Charlie and Harold. Cash has the distinct advantage of being cheaper, at least for most US and Canadian credit and debit/ATM cards. You can read the fine print on your card agreement to see what the fees for foreign transactions will add up to. Probably it will be a good deal more than at home (and Capital One does charge fees to Canadian customers.) I long ago decided that it was a financial advantage to use cash (and often quicker) except for large expenditures such as a hotel bill. I withdraw a large amount from a bank ATM. Worried about losing a wallet filled with euros? You're in worse shape if your cards go missing. And debit/ATM cards for purchases may not be accepted by smaller merchants.

Posted by
2157 posts

I prefer to pay in cash, and plan my spending accordingly so that on my last day I have enough to get to the airport and buy food. I don't mind some leftover euros but last year I was in Hungary (came home with about $7 worth of forints, nice souvenir) and this year Czech republic and Poland so there'll be some budget projections going on in both countries.

Posted by
3580 posts

I've been given discounts at Italian hotels when I pay in cash. Since it's harder to find fee-free bank ATMs in Italy, I like to load up on euros while in France so I can pay in cash there. If I return home with 20€ I will have enough cash to get from airport to town before looking for an atm.

Posted by
12343 posts

Hi,

This doesn't exactly pertain to what you're asking: In England I've come across pubs, B&Bs etc, where if you want to pay for the meal, lodging with a US credit card, an extra 3-4% (depending on the establishment) will be charged for that luxury. With small items and expenses, pay in cash, much simpler. If you buy groceries, clothing, etc at Monopix, your US credit card is accepted. I've done that but was also asked to show the US passport...be prepared for that too.

Posted by
64 posts

You seem to have things under control. We use our credit card whenever possible (hotel, restaurants that accept credit cards & many tourist sights), but always have some Euros available for smaller purchases & for businesses that do not accept credit cards. Visa, Master Card & American Express (but not Discover) are widely accepted in Paris & Barcelona. Take two different credit cards with you, just in case. Have fun!

Posted by
1758 posts

Like many posters, we tend to use our credit card much more these days. We also have the Capital One card, with no FTF. But we also like it - a lot- for the 1.5% reward we receive for using it. Here at home I am ruthless with that card, and will swipe it at McDonald's in a heartbeat for a burger and coffee. Nobody pays me for using cash, and I honestly cannot remember the last time I wrote a check. We carry around 100 to 200 euro cash between us and use it for smaller, daily purchases. We carry a couple of credit cards each just in case one screws up like it did that scary day in Amsterdam. We also tend to settle hotel bills, and indeed most larger sums, with credit card unless a substantial cash discount is offered. Thanks to posts I read here, we switched to a credit union ATM card that reduced our fee from 3% to 1%. We never use debit cards here or abroad just because they give me the willies...horror stories about accounts being drained, etc. Urban myth or not, using the credit card responsibly and paying it off with due diligence offers us cash back rewards and peace of mind. Safe travels!