Many people prefer to pay for everything with plastic, to keep tabs on spending, accumulate rewards points or not have to hassle with ATMS or making change.
But a brilliant system for managing your budget on home turf doesn’t always work when traveling in Europe, and hidden costs from using your American credit card abroad can lead even seasoned travelers to unwittingly overspend in Paris.
Know When To Leave Home Without Them
Some travelers justify using a credit card to pay for everything by imagining all the rewards points they might be accumulating or giving themselves an “I’m-on-vacation” pass. But before you make assumptions about what a great idea it is bring your credit card along on vacation, do the actual math to avoid ugly surprises once you’re back home.
Don’t Fall Victim to Foreign Transaction Fees
Many Paris merchants will be happy to take your American credit card, but only a handful of American card companies do not charge around 3% for foreign transactions. Add this to the already weak dollar/euro exchange equation, and you’re looking at a lot of wasted money.
(If you travel internationally on a regular basis and like the convenience of using plastic, you might want to read more about cards without foreign transaction fees.)
Beware of Credit Card Minimums
French debit cards are widely accepted in Paris, but not every merchant chooses to take plastic, and those who do often require a minimum purchase. Buying €5 worth of croissants at the boulangerie to meet the minimum purchase requirement when you can get by with spending a €1 coin is a bit rich. Using your card for a large purchase can make sense, but make sure you have cash on hand for everyday expenses.
Remember that while it is convenient to use plastic for everything, it’s not convenient when you have no cash on you and cards aren’t accepted. (Sidenote: Paris taxis are not required to take credit cards, though some now do, but they don’t mind being asked to stop at an ATM machine while you get some cash.)
Just like anywhere, many Parisian merchants will make deals with you if you are willing to pay in cash. This won’t work at the supermarket or in a restaurant, but it may work at the flea market or a street market and some small boutiques, where offering to pay in cash can lead to a discount.
The Double-Edged Sword of Convenience
Also remember that studies have shown that using a credit card for purchases increases spending by an average of 18%. Even though euros can seem like Monopoly money when you first start using them in all their multi-colored and mini-coined glory, there is something painful about watching your wallet physically empty that is a natural deterrent to impulse buys and overspending.
Related Article: How Avoid ATM Fees in Paris