Debit/credit cards for your overseas purchases/booking the hotels during/before your trip?

. I'm not sure what charges mean exactly?

If someone steals your debit card which is tied to your own money in a checking account in the bank, they will try to empty it by charging stuff. Say if you have direct deposit from work they will steal all of it. It has happened to me before and it takes time for the bank to reverse those charges and if your balance is negative the bank could still add negative or zero balance fees until the investigation is over. That is why you use a credit card which is the bank's money that they loan to you when you charge stuff.

Never use a debit card for online purchases.

What he means is that using a debit card opens up the potential for high fees, limited fraud protection, and less acceptance compared to credit cards. Debit cards often charge foreign transaction fees, ATM fees, and currency conversion fees on withdrawals and purchases. Plus they offer less fraud protection than credit cards, and places like hotels and rental car companies will prefer or even require a credit card, especially in Europe.

I would strongly suggest using a credit card that does not charge foreign transaction fees. Some credit cards that do not include Capital One, Chase Sapphire and American Express, but check your own credit cards to find out.

Your example is not what RS refers to. He means that if there is fraud on your debit card, he thinks your bank will not immediately reverse the charge but will leave it deducted from your account until they investigate. That may or may not be true, depends on your bank's policies, your "status" as a bank customer", etc. He implies that credit card companies, when alerted to fraud, will immediately reverse the charge. (which I think they typically do - but I wouldn't speak to all card issuers)

As for your example - check that the booking site included all relevant taxes and charges that the hotel imposed. There could be a difference in exchange rates - booking company used something different than your bank when the GBP transaction went through. Your bank could have imposed a foreign transaction fee. Can you look at the itemized charge? I don't use booking dot com so don't know the info they include on your receipt.

edit - Cross-posts. Definitely agree to use a credit card over a debit.

Here is how I do it. Chase Sapphire Reserve Credit card for purchases. I also bring another credit card with no foreign transaction fees as well for a back up. Cash from ATMs: Charles Schwab Investor checking Debit Card. No atm fees worldwide.

Several things could have caused the cost of your hotel in dollars to go up:

• A change in the exchange rate between the time you booked the hotel and when you paid, which I assume was when you stayed there. The actual hotel rate is set in the local currency. If you ask booking.com to display rates in a different currency, it will do so, but it has no way of knowing what the exchange rate will be in the future, so it uses the current rate.

• if you were asked by the hotel when paying the bill whether you wanted to pay in British pounds or in dollars and you chose dollars, you allowed the hotel to use whatever exchange rate it wanted to use. Choosing to pay in dollars always costs more--sometimes 7% more, but it might go higher than that. Do not ever choose dollars when purchasing something overseas or when withdrawing local currency from an ATM with your debit card.

• As already mentioned, many credit cards charge foreign transaction fees for use outside the home country. Those fees may be a flat amount per transaction, a percentage of the amount charged, or a combination of the two.

I am not aware of credit cards that charge as much extra as you paid, which was roughly 15% more than the original projection. I think the extra cost is at least partly the result of the first or second factor I mentioned above, or more likely both of them working together.

You can't do anything about the sinking value of the US dollar, but you can avoid the painful dynamic currency conversion (DCC) penalty by never asking to pay in dollars.

Warning, boring details coming. The key differences in this scenario is that debit cards are governed by Regulation E and credit cards are governed by Regulation Z. Everyone above is correct. Regulations tend to offer more protections to customers when they borrow money than when they're spending their money. Since a debit card is a deposit account, when there's a fraud charge that amount can be deducted from your balance while the bank takes the time to investigate the fraud. This is reasonable because otherwise an unscrupulous person could make a large purchase, claim fraud, and if the money was placed back into the account, they could spend it and leave the bank hanging.

Credit cards are money you borrow from the bank and spend. The law states that if there is fraud on that loan, the bank must credit the amount while it is being investigated.

The impact of all this is if there is a fraud purchase on your debit card for $1000, that money will not be readily available to you. However, if there is a fraud purchase of $1000 on a credit card, that will not impact your remaining credit line.

I'm agreeing with all the other posters and their good information. I just spent 2 1/2 weeks in England and 9 days in Ireland. I travel solo as do many of us. As such, we don't have anyone to watch our backs and do a lot of pre-planning and are cautious.
Have you been on your trip? I don't see the dates in you post. Currently the bank exchange rate for £117 is about $158 (the app I use is not real time). This is not the rate you are charged but the rate banks charge each other to transfer money. The rates change constantly.

Here's how I handled money:
Always pay in local currency, never in US$. That way your credit card company choses the exchange rate, not the ATM company which will always be more.
1. I take three credit cards. One is my daily use card that is in a coin purse with daily cash/change in my purse. The other two are in my money belt. The daily card and one back-up are in Apple Wallet. Credit card is for purchases no matter how small. None of my credit cards have foreign transaction fees.
2. I set up a "travel account" at Fidelity that includes a debit card. This is for ATM cash only. Again no foreign transaction fee.
3. I had €100 left from last year's trip, so did not need to use my ATM card to get cash from a bank ATM, use only ATMs attached to banks. Had I not had leftovers, I would have gotten euros through an ATM or from BAC when I ordered £ (British pounds).
4. On this trip, the London B&B wanted cash upon arrival since I don't use PayPal. I bought pounds through my BAC account plus £100 for spending money.
I'm a firm believer to always book lodging, travel, event tickets directly with the company, not through a third party. I have gotten better rates, better terms and better cancellation policies by booking direct.
I book cancellable hotel rooms and note on the calendar the last day they are cancellable since no two timeframes are the same. If something changes it's a phone call to cancel. I've prepaid for a hotel once in the past four years.
5. I came home with €20 and £30. Almost all businesses use credit card transactions so you need little cash.

Enjoy your trip!

I was playing with Booking.com and noticed the quoted charge is before taxes and fees are applied. I think this is likely why the charged amount was unexpectedly high.

Adding that one should only bring a travel ATM debit card overseas, not the household account card-- that always stays at home.

I use booking.com a great deal--nearly always for initial research and sometimes for the ultimate booking. On my current trip it has been less expensive than the hotel's website on more than one occasion. I've probably reserved through booking.com about 100 times since 2015. In my experience, the rates displayed include taxes and fees except for city tax the hotel wants the guest to pay in cash (especially common in Italy), and that exclusion is revealed in the listing.

I use a credit card to book the hotel when using booking.com. The credit card used , obviously, charges no foreign transaction fees. In Berlin this hotel I found out its policy was now cashless, wherever you made a charge there, dinner, breakfast, check-in, etc. Surprising but it wasn't my first encountering that as policy.

I don't bring the debit card along, it's 4 credit cards and this time especially a lot of cash.

use only ATMs attached to banks.

Not really necessary. The UK has a system of ATMs (cash machines in British English) called "Link". Any machine where you see the Link logo is good. ATMs that charge a fee for use have all but died out as far as I know. Maybe others have seen them in the wild still. If a machine is about to charge a fee, you'll have to push "yes" somewhere in the process to accept it.

https://www.link.co.uk/cash-locator

edit: I stand corrected by the site I linked to above. Some machines do charge a fee. £1.99 is the average. In somewhere like London there's always going to be a machine that doesn't charge a fee pretty close by. The machines on the wall outside Tesco Express, Sainsburys Local or similar are always going to be free. Machines inside or outside small independent grocers or corner shops seem to be the main culprit for charging still. I've never had cause to pay a fee for a cash withdrawal in a very long time that I can recall.

In my world there are to catagories: 1) Best Practice and 2) Never do it.

Not using an ATM card falls under "Best Practices" but I will still use it if the circumstance dictates. From another thread recently I am pretty well convinced that the days of card skimming are quickly coming to an end. So risk is way down. And most ever ATM these days has a tap function so your card cant go past a skimmer anyway.

For a little more protection I have two accounts. One with the real money, and the ATM account with never more than a few weeks of spending cash. I am probably wrong, but I dont think someone can overdraw an account with an ATM so the most they get is a few hundred dollars and for the little risk involved I always have a plan B (my ATM) in my pocket.

By the way, I live in Europe and I use a US bank for all my expenses.

Skimming isn't something you need to worry about in the UK. It was never a huge risk, but it died out almost completely a couple of decades ago.

ATMs where you tap rather than inserting a card aren't very common in the UK. I looked it up because I was curious, and 16% of machines have that functionality[edit: as of 2023. There may be more now}. I wouldn't imagine there's much incentive for banks to invest in new ATM technology these days because cash use is so low here.

I noticed here that the tap readers became the norm over the last couple of years. Sometimes the are retrofits on existing machines. Also, here we dont have bank tellers. Well, yes, if you want to pay a fee you can see a teller after taking a number and waiting 15 minutes. So folks use the ATM to make deposits as well as take money out. There is still quite a bit of cash in circulation here. Not out of necessity probably, but people still like to use it. But every place in Europe will be different. So there is no norm. I need to be more careful when I post not to sound as though there is. I like to say if the statement begins with "In Europe they .... " its a fairytale.

In my experience, the [Bookiing.com] rates displayed include taxes

Yes but only at the very end, you have to be watching. The price shown is without taxes and fees the first two screens. They are magically added on when hitting "next step" after personal details are filled out but before credit card number is added.

As someone who does not have a credit card, reading this thread is interesting! It is absolutely possible to travel around Europe and beyond without one. (I concede that I do have a work one thru my employer, tho obviously that is only for work-related expenses.)

I haven't had a credit card in 30 years.

I have a credit card but only use it for a notional transaction of literally a few £ every two or three years, when they threaten to close it for lack of use.
It is only really kept in case I run into serious trouble somewhere remote in the world and need a line of credit, and for it's long ceased affiliate links with one of my universities.

Toby, I'm curious about what cities you've been researching where you found the initial booking.com rates didn't include taxes and fees. I've never seen that, and I've traveled in about 25 European countries since 2015. I'm referring to what I see on booking.com itself. I have no idea what shoes up in Google's search results when it displays rates for a hotel from multiple sources.

Acraven: I am looking at the Booking.com app for a 4 night stay in West Los Angeles.

Olivia Hotel: price is listed on the map and then the room selection page @ $1087, click on “reserve” and a new screen appears with an updated price of $1278 and the note “includes taxes and fees.”

The nearly $200 increase plus the $30/day parking charge led me to stop the reservation, $350/night, that’s a lot of money.

What Rick Steves' if referring to is that debit cards (at least in the US) are directly attached to your banking account. Banking accounts hold your real money. If for whatever reason your debit card is compromised, you are losing actual money and you do not have access to your real money while the bank is investigating and trying to return your actual money. The "potential charges" are what a fraudster is charging on your debit card when it has been stolen. It has nothing to do with the any processing fee (although that is a consideration for sure as using a no fee credit card while traveling is smart). Not only should American consumers never use debit cards while traveling and charging expenses abroad, they should never use them in the US when making purchases for the same reason: if for any reason your card is compromised, you will not have access to actual money.

At least for us in the US (I know others abroad have different attachments to credit cards), it is advisable to never use your debit card with purchases online (or even in person). For those who are worried about debt, using a credit card does not mean you carry debt. I exclusively use a credit card for all purchases, and pay it off in full every month, so not an issue. Also, skimming is not an issue either for me.