When you pay for your vacation expenses with a credit card, you will enjoy extra protection that is not found with traveler's checks, personal checks, cash, or even debit cards. First of all, many credit cards offer insurance, such as travel insurance and free car rental insurance. Not only can this save you some cash, it will protect you in case of an accident.

Another benefit to using your credit card while traveling is that it is easy to cancel a card if it gets lost. If your cash is lost, you will likely never see it again. If your checkbook or debit card is stolen or lost, the money can be removed from your account before you even realize they are missing. With a credit card, on the other hand, you simply report that it is missing and you will only be held responsible for $50 of the charges placed on the card after it was lost or stolen. In some cases, you won't be responsible for any of the expenses.

If you are going to use a credit card while on vacation, there are a few precautions you should take in order to make sure you are fully protected. For example, you should write down the 1-800 number for customer service as well as your account number, and you should keep this information in a safe place that is away from where you store your credit card. This way, if your card does come up missing, you will have the information needed to call and report it as missing.

It is also a good idea to contact your credit card company before traveling, particularly if you are traveling overseas. Most credit card companies have special fraud alert software that is triggered when purchases are suddenly made in an unusual location. By letting your credit card company know that you will be traveling, you can avoid the embarrassment of having a card denied or making it so that the merchant has to call to verify the transaction. Although you should still be able to ultimately use the card while away, a simple phone call ahead of time will eliminate this problem.