Paying for Travel When You Can’t Use Credit Cards

Sending money to a travel supplier is usually straightforward: That’s why you have credit and debit cards and why so many suppliers accept them. But there are times when you can’t use conventional plastic, when it’s too expensive, or when it’s unnecessarily risky. Fortunately, you have options.

Insulating Your Account or Account Information

If you’re dealing with a supplier you don’t know well, you might hesitate to offer a credit card number, and especially a debit card number that goes right to your checking account. You certainly want to avoid paying by money order or any other system that leaves no trail you could use if you have an issue with the supplier. That’s one of the main reasons PayPal has become so big. For those of you who don’t use PayPal, it’s a third-party intermediary that isolates your personal financial information from anyone else. You open an account and either deposit enough money in the account to cover your planned purchase(s) or link it to a checking account, debit card, or credit card. When you buy something, you notify PayPal, and it sends the money to the recipient’s PayPal account.

Many suppliers prefer PayPal because its fees for selling merchandise tend to be lower than what banks charge. Moreover, PayPal lets them accept major credit cards without having to sign up and pay for any credit card program.

Several other similar online systems do about the same as PayPal. But PayPal seems to be the biggest and most widely accepted player.

Related: When Should I Book My Flight?

Protecting Your Funds

Many big-ticket travel services require big prepayments or deposits, often months in advance. You probably don’t worry much about prepayments to a big airline, cruise line or well-known tour operator, but if you’re paying for a vacation rental or timeshare you may well be dealing with an individual you don’t know at all. Several online outfits can protect you against problems by putting your payment in an “escrow” service that doesn’t distribute the funds until both you and the supplier are satisfied. As far as I can tell, buyer disappointment is a particularly tough problem with rentals arranged through Craigslist.

RedWeek.com, the big online timeshare marketplace, offers a “vacation escrow service” that keeps payments through First American Title Insurance until buyer and seller sign off on the deal. The fees are stiff, averaging something like 6 percent of the deal, but the deal protects you against misrepresentation or fraud. Obviously, for the system to work, both buyer and seller have to agree. But 6 percent is a lot less than 100 percent of a deal gone bad. Other online systems provide similar services.

Related: 7 Habits of Highly Effective Travelers

Foreign Exchange

A few times, the normal plastic approach to foreign exchange doesn’t serve your interests. The one really big-ticket case is when the country you’re visiting has a controlled exchange rate and, consequently, an unofficial “blue” market. As far as I can tell, right now, Argentina is the only country you’re likely to visit with a blue market. Rather than deal with shills you meet on the street—and you meet a lot of them in Buenos Aries—online agencies Xoom.com, RiaMoneyTransfer.com (US) and Exchange4Free.com (Canada)—convert dollar payment to pesos at the blue-market rate, currently about 11.6 to the U.S. dollar, and either deposit pesos in an Argentine bank account or provide cash pickup at a nationwide local financial institution with lots of branches. By contrast, plastic converts at the rate of 8.9 to the dollar.

Sending Money to Travelers

PayPal transfers money to individuals for no fee—obviously, a far better bet than Western Union with its stiff fees. Overseas, PayPal and the foreign exchange outfits listed above can help.

Disclaimer: PayPal is the only company listed here that I’ve actually used. I cite the others for your information, not as an endorsement or recommendation.

Ed Perkins Seniors on the Go is copyright (c) 2015 Tribune Media Services, Inc.

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