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A Money Talks News reader recently wrote in with the following question…
My husband and I are trying to plan our honeymoon, but a lot of hotels mention the need to see a credit card at check in. Neither of us have a credit card, only debit cards linked to our bank accounts.
Someone told me that if you show only a debit card, they’ll hold $700 or more out of your account for things like renting a car. I don’t really want to get a credit card. I was raised that if you don’t have the money for something, save up for it, or you don’t really need it.
I understand that it can be good for emergencies (our washer went out and we had to take out of our honeymoon fund for a new one), but I don’t want to deal with all of the hidden fees and back dealings of credit card companies.
Is there a card out there that doesn’t penalize for not using it, so that we can have a card for travel purposes and emergencies? Or are they all use it or pay for nothing gimmicks?
Thanks for the question, Calla, and congratulations on your wedding.
You should be able to reserve a room in most hotels without a credit card, but it’s much easier if you have one. As you’ve heard, without a credit card, most hotels will ask for a deposit in the form of a “hold” on your debit card. So if you decide to leave home without a credit card, ask in advance about hotel policy. And if possible, get it in writing so there’s no misunderstanding after arrival.
Now let’s shift the subject: your fear of credit cards. Credit cards are not evil. As you say, people shouldn’t make purchases they can’t afford. But credit cards aren’t just about debt, they’re also about convenience.
I’ve been using a credit card since I was a teenager, and I’ve never carried a balance or paid interest. In fact, most people using credit cards don’t carry a balance. As for credit cards being “good for emergencies,” a savings account is a much better option, for a simple reason: They pay interest instead of charging it.
Think of a credit card like any number of other potentially dangerous things, from guns to cars. In the wrong hands, they can lead to disaster. In responsible hands, however, they can be valuable tools.
With your responsible spending habits, you should be able to use a credit card in moderation and pay your balance in full every month. Armed with the proper plastic, you’ll check into hotels and rent cars without the hassle of debit card holds. You’ll benefit from building credit in tangential ways, like getting a better deal on your car insurance. You’ll also be able to earn cash back and other perks.
As for gimmicks like inactivity fees, there were reports years ago they could be coming. But these policies were never implemented by the major card issuers and inactivity fees were banned in 2010. These days, there are plenty of credit cards without annual fees you can use as little as you like. The Capital One VentureOne Rewards Credit Card is one example. Even better is the PenFed Promise. These two cards also have no foreign transaction fees.
So don’t be afraid to carry a credit card or two, especially when you’re traveling. I have confidence that if you use your card wisely, you’ll be able to start your married life without debt or fees.
Note: While we attempt to be completely objective when reporting on credit cards, this site may be compensated by issuers when a reader applies for a credit card through the links within credit card stories or on our credit card search page.