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Credit card vs. debit card

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I learned the hard way after my first cruise about using a debit card for my onboard account. I had to wait a few days after my cruise to pay my bills because of all the holds on my account.

 

My second cruise and third cruise, I used a combination of gift cards and cash to cover my account.

 

This upcoming cruise I was planning on using my credit card. Will holds create a problem or make me reach my limit before I actually have reached it? Can you start a cash account and use your card to make payments towards your account? Example, I start up my account with $500 cash and once I have spent that, can I use my credit card to add $500 more?

 

 

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Posted (edited)
I learned the hard way after my first cruise about using a debit card for my onboard account. I had to wait a few days after my cruise to pay my bills because of all the holds on my account.

 

My second cruise and third cruise, I used a combination of gift cards and cash to cover my account.

 

This upcoming cruise I was planning on using my credit card. Will holds create a problem or make me reach my limit before I actually have reached it? Can you start a cash account and use your card to make payments towards your account? Example, I start up my account with $500 cash and once I have spent that, can I use my credit card to add $500 more?

My understanding is that you can use a combination of cash and credit to pay for the onboard account, but you may just be making things unnecessarily complicated that way.

What we like to do is use a credit card with a high credit limit for our onboard account, so there are never any concerns about holds.

 

Then we use a different credit card, with a much lower credit limit for the purchases we make off the ship.

That way if the card should be compromised, the thief can't get very much, and we lose nothing at all.

We carry very little cash because if cash is lost or stolen, it is gone and you have no protection.

 

When you use a credit card, you have the protection of the credit card company for anything charged to that card. So if your credit card is lost or stolen, you just report it and you lose nothing.

 

That is why I would suggest only using a credit card for the onboard account, if you have a reasonable credit limit and are able to do so.

 

Besides, when you pay with a credit card, you can get miles or cash back, whichever you prefer.

That is just another reason to pay with a credit card instead of cash.

You are absolutely right not to use a debit card for your onboard account, or to pay for anything at all.

A debit card removes money from your bank account.

Its best use is for making ATM withdrawals if you need cash.

If a thief gets hold of your debit card, he can clean out your bank account.

Also, holds on your bank account with a debit card may cause you to bounce checks. (That won't happen with a credit card.)

 

A credit card is much safer because it does not remove any money or tie up any money from your bank account.

All a hold on a credit card can do is reduce your remaining available credit on that card.

One more thing - if you are going to be making purchases in foreign currency, it is best to check and make sure to use a credit card that does not charge a fee for foreign currency conversion.

 

Good luck, however you decide to do it.

Edited by varoo

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"I start up my account with $500 cash and once I have spent that, can I use my credit card to add $500 more?"

 

 

I think that what will happen is that if you set up the cash account with a $500 balance, and you spend that all, then whatever more you spend on board will be paid with the credit card (or more cash) at the end of the cruise. I don't think there is a way to add $500 more from the credit card mid cruise.

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Since I pay my CCs off every month, I have plenty of credit available. I take a couple of hundred dollars for tips etc and if there is any left at the end, I use it to pay off my account.

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I was planning on using a credit card with a $1500 limit. It is paid off and the full limit is available at this time for the cruise. I am using cash and available credit on my other cards for everything else on our trip.

 

What I am worried about is what will happen at the end of the cruise with my onboard account. If I spend $1300, I will have holds in that range. The money is there. However, what happens on the last day when they run my card for another $1300 to pay my final bill? I won’t have $2600 ($1300 for holds + $1300 for actual charges).

 

Does this mean I actually have only $750 to spend? ($750 for holds and $750 for the final bill)?

 

 

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I have had this problem before and they have a way to work around it.

The lazy way merchants, that put a hold on a cc, like hotels, do it is exactly as you fear, and that is at the end of your stay, they place a charge for the entire amount on your card. This means that all the individual charges that they have gotten authorizations for are still there reducing the amount of credit available to you. In that scenario you would only be able to spend $750 on a $1500 credit line.

However, the way around this is to have the merchant turn the individual authorizations into purchases, thereby using the funds that they have a hold on and not adding the total amount against your credit line again.

As you know, the cruise line puts an authorization on the cc every night for that days spending, so at the end of the cruise there will be as many authorizations placed against your credit line as nights spent on the ship.

Sorry for the lengthy reply, but this is a situation I've dealt with many times, especially with the amount of hotel stays we have.

 

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The OP does raise a big issue for many cruisers who have limited available credit limits on their cards. All the cruise lines put various holds on either a Debit or Credit card as a way of ensuring that they will later get paid. These credit holds can be quite large, especially on longer cruises. For example, HAL normally puts a hold equal to $60 per passenger day and many other lines use similar amounts. A hold can limit your ability to use the card for other purchases in cases where you have a lower maximum credit amount.

 

But there are some things a cruiser/traveler can do to help the situation. If you have a relatively low credit limit on a major credit card, call your credit card company prior to your trip and ask that your credit limit be temporarily increased. Many credit card companies are happy to grant these increases as long as the customer has proven to be reliable. Debit Cards are an entirely different kind of animal and we would never use one on a cruise ship. Debit cards have different rules and lack some of the protections afforded credit card users. A credit hold on a Debit card can have the impact of freezing some or all of your account balance which might even prevent you from doing a withdrawal from an ATM.

 

Using cash to settle onboard accounts can be a royal pain, but is also a valid strategy. The "pain" part is that you must go to Guest Relations (perhaps multiple times during a voyage) and maintain an acceptable balance in your onboard account. If you have previously used a credit or debit card to set up your onboard account, paying down some of the balance may not help with the credit hold that has already been placed on the card. You can certainly request that the purser remove some of the credit hold....but that may or may not get you any results.

 

Hank

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I think my solution to this problem is going to be buying the drink package prior to our cruise. Most of our onboard charges were going to be our drinks. This way our drinks will be charged to our card and no holds. The remaining balance on the card can be used for our onboard account. That will leave us with around $600 of available credit, so we will have about $300 to spend on board ($300 in holds + $300 final bill). It looks like our only option.

 

So much for spending my time in the casino. [emoji22]

 

 

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What is the required start up amount for your onboard account?

 

Also, I am traveling with my boyfriend. Our first cruise together on Carnival they had set up separate accounts for us. Our second cruise, we had a joint account. Will we be able to have a joint account on Celebrity or do we need two different accounts with two start up funds?

 

 

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What I am worried about is what will happen at the end of the cruise with my onboard account. If I spend $1300, I will have holds in that range. The money is there. However, what happens on the last day when they run my card for another $1300 to pay my final bill? I won’t have $2600 ($1300 for holds + $1300 for actual charges).

 

There shouldn't be a hold plus an actual charge on your card. The hold will be placed when you check in. That initiates the transaction with an estimate of the charge. When your account is settled at the end of the cruise, the original hold should be updated to the actual amount charged, and the transaction should be finalized.

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If people have credit cards, why even thing of using a debit card? I suppose unless you are maxed out on the credit cards?

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On my first cruise, I used my debit card not knowing about their holds. I transferred my vacation fund into my bank account, so I knew what I had available to spend. My final bill was around $900. I had over that amount in my bank account. However, each day they were putting a hold on my debit card. The holds totaled around $800. Then they ran my finial bill of $900. They didn’t use the holds to pay for my bill. Instead, I was charged the full amount. Luckily, I had my paycheck deposited into my bank account while on the cruise, so I had the money in there to cover the final bill. I had to wait for each hold to drop off my bank account to pay my rent and utilities when I returned home.

 

So, Carnival used the holds to make sure I had money, but didn’t use that held money to pay my bill. My $900 bill took $1700 out of my account and then slowly returned $800 to me.

 

 

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I have never seen a hold on my credit card for any aspect of cruising. We use our credit card for everything we do, hence we have a very substantial limit. If you time it right, you'll not have to pay for almost two months from the time of your charge.

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What is the required start up amount for your onboard account?

 

Also, I am traveling with my boyfriend. Our first cruise together on Carnival they had set up separate accounts for us. Our second cruise, we had a joint account. Will we be able to have a joint account on Celebrity or do we need two different accounts with two start up funds?

 

 

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In May I was traveling with a friend. When we were boarding they gave us the choice of one account with both seapasses associated with it or separate accounts. For us separate was preferable, but you two ought to be OK on the one.

Have a great trip. I love the Summit.

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Credit cards don't place "holds" like debit cards do....you may see a "pending charge", but that drops off as soon and the charge is paid.

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Also, I am traveling with my boyfriend. Our first cruise together on Carnival they had set up separate accounts for us. Our second cruise, we had a joint account. Will we be able to have a joint account on Celebrity or do we need two different accounts with two start up funds?

 

 

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When you do your online check in, you will have the option of using the same payment method for both accounts or separate for each person.

 

Mike

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When you check in online, you can choose whether to use the same card/account for both guests in the room or set up separate accounts.

 

Your experience with using your debit card is making you overthink this. Debit cards are problematic. Credit cards simple. Use your credit card to check in (just make sure the pre-authorization/hold is less than $1,500 since that's your limit). Then you can spend up to $1,500 on the ship.

 

You will never see the hold unless you check your pending charges during your cruise. There is only one transaction. It is initiated when you check in and finalized when your account is settled at the end of the cruise.

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So much for spending my time in the casino. [emoji22]

 

 

You have to pay a fee (currently 5%) if you want to get cash via your ship account. Much smarter to use cash for casino play. You can also control how much you're spending a lot better that way.

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........But there are some things a cruiser/traveler can do to help the situation. If you have a relatively low credit limit on a major credit card, call your credit card company prior to your trip and ask that your credit limit be temporarily increased. Many credit card companies are happy to grant these increases as long as the customer has proven to be reliable.

Great suggestion!

A member of our family did that last year before a trip, requesting an additional $5,000 on his credit card limit. With the higher limit, there was no need for concern about holds.

 

Even though he requested a temporary increase, they never removed the higher limit, so he still has it on his credit card account and will not need to request it again for future trips.

He does pay his bills in full, on time every month

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I think I found the solution to the holds and credit limit problem. I called Celebrity and I can purchase onboard credit as a “gift”. I will just buy $1000 onboard credit and then won’t have to worry about holds tying up my available funds. I’ll still have $500 ($250 holds & $250 final bill) available on my card. Might go ahead a “gift” myself a wine tasting too.

 

 

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If you are traveling, the only use of a debit card should be a cash withdrawal from a surcharge-free ATM or a supermarket. Otherwise, use a credit card.

 

This doesn't just apply to cruises. I was doing a road trip two years ago crossing across Nevada, went north to Jackpot, Nevada, then Idado. I was filling up at a station in Wells, Nevada. The station had signs up stating that when you use a credit or debit card, the card is "authorized" with a $75 charge prior to fill up, then the actual charge is processed. This "hold" takes 2-3 days to clear. (See Dear ABC News Fixer: My Credit Card Charges Me an Extra $50 Whenever I Buy Gas. What Gives?) However, if you have a debit card, this reduced the cash available. For a credit card, it reduces the credit available.

 

This hold is not just at fill-up stations. This also applies to car rentals, hotel bookings, and on-board cruises as well.

 

If you are taking a cruise, you really should bring along two-three credit cards "just-in-case" and inform the appropriate financial institutions beforehand. That way, if one of the cards gets temporarily locked out or stolen, you have a backup. See this article from Cruise Critic: 5 Credit Card Mishaps That Could Ruin Your Cruise

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If you are traveling' date=' the only use of a debit card should be a cash withdrawal from a surcharge-free ATM or a supermarket. Otherwise, use a credit card.

[/quote']

 

I agree and I would never use my regular ATM card that can access my accounts. My bank set me up with a separate travel debit card that I can pre-fund before the trip and, if necessary, add money to during the trip. But that is one way access.

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It sure looks like a lot of people don't understand credit cards. You have little or no liability for charges that are not made by you or another person on the credit card account, if you report it in a timely manner. That timely manner is within 15 days of receiving your monthly statement. More and more people will see unauthorized use long before this by checking their account online. At that time report it, dispute the charges, request a new card for everyone on the account. The most you can be liable for is $50.

 

Most Visa and Mastercard accounts have the same account number and CVV code for all cards on the account. If one is stolen the whole account is compromised.

 

Major bank are good at catching fraud on bank issued Visa, Mastercard and American Express cards. If there is a "strange" purchase on your card, i.e. a small .01 purchase followed by a larger one, then the card will be flagged and suspended. They will contact you by email, phone or text or wait for you to contact them. You will contact them when your card is not accepted.

 

People who believe that if they have $25,000 limit and the card is stolen and maxed out, they will have to pay back $25,000 in purchases are believing old myths and "a friend of a friend" stories.

 

I travel with two high limit Visa cards and an Amex card. We use our main Visa for the cruise account. We use our secondary Visa for purchases off shore.

 

Also, make a copy of the back of your cards and keep it in the ship's safe. If a card is stolen you have the contact numbers and the account number. It may cost you a ship to shore call. Princess allowed us to use the Guest Services phone for free when our onboard account Visa was hacked. Chase put a hold on our card after recording purchases in Ireland. We were in the Caribbean. They couldn't send a new card so I just used my Amex for the rest of the onboard account. Your card number and CVV could be electronically stolen or cloned by a server in a restaurant, days, weeks or months earlier and then sold on the black market and then the charges hit.

 

So my advice is: Use a credit card on the ship. Make sure you have a large enough limit to handle your onboard account and purchases. Then have a backup credit card in the event of a problem.

 

Take care,

Mike

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I was planning on using a credit card with a $1500 limit. It is paid off and the full limit is available at this time for the cruise. I am using cash and available credit on my other cards for everything else on our trip.

 

What I am worried about is what will happen at the end of the cruise with my onboard account. If I spend $1300, I will have holds in that range. The money is there. However, what happens on the last day when they run my card for another $1300 to pay my final bill? I won’t have $2600 ($1300 for holds + $1300 for actual charges).

 

Does this mean I actually have only $750 to spend? ($750 for holds and $750 for the final bill)?

 

 

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$750 + $750 doesn't equal $1,300.

 

NO, they won't put a 1 time $1,300 hold on credit card. They may put $300 at a time every few days, depending on how fast and high your spending goes.

 

IF (I think you mentioned) you were going to start your on board account with $500 cash and ONLY cash (no credit card as backup) the cash is depleted, then once all $500 is spent, again with NO credit card backup, there is no more spending. Period. Account is frozen. You most likely will be notified by guest services to put a credit card on your account for backup.

 

When you put a credit card on your account for backup, most likely, the cruise line will take a $200 - $300 authorization to cover 'potential' purchases. Once depleted, more authorizations will follow.

 

You can always call your bank and ask them to explain how the authorizations work on your credit card.

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Credit cards don't place "holds" like debit cards do....you may see a "pending charge", but that drops off as soon and the charge is paid.

 

A pending charge is a hold of your available credit.

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I have never seen a hold on my credit card for any aspect of cruising. We use our credit card for everything we do, hence we have a very substantial limit. If you time it right, you'll not have to pay for almost two months from the time of your charge.

 

Unless you’re logging in to your account everyday and checking your “available credit” you wouldn’t see it, but it’s there.

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I think I found the solution to the holds and credit limit problem. I called Celebrity and I can purchase onboard credit as a “gift”. I will just buy $1000 onboard credit and then won’t have to worry about holds tying up my available funds. I’ll still have $500 ($250 holds & $250 final bill) available on my card. Might go ahead a “gift” myself a wine tasting too.

 

 

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And remember you can always ask for a copy of your bill at any time to see what charges have been added and when. That way you can keep track of what has been spent. I also agree that if you purchased a drink package ahead of time your worry of "how much did I charge to my account" will go down because you are not thinking of all of the drink purchases.

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I think I found the solution to the holds and credit limit problem. I called Celebrity and I can purchase onboard credit as a “gift”. I will just buy $1000 onboard credit and then won’t have to worry about holds tying up my available funds. I’ll still have $500 ($250 holds & $250 final bill) available on my card. Might go ahead a “gift” myself a wine tasting too.

 

 

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You don't need to make it this complicated. Just use your credit card. You'll be able to spend up to $1,500 --- NOT half of that.

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Interesting thread. But many of us with high credit limits fail to understand the problems faced by many younger cruisers and even some older folks who have very low credit limits. These folks also want to travel and they have to be concerned about credit holds and related issues. For those of us with high limits or AMEX cards these are just not issues and most of us give it little thought. I guess even though I am an old f&^%, I still remember what it was like when I was a young traveler.

 

So for those of you with low credit limits, please try my simple no lose suggestion. Rather then getting out of joint, trying to use debit cards, etc....simply call your credit card company, be very polite, explain that you are going on a cruise, and ask for a temporary increase in your credit limit. The worst that happens is they say no....which is unlikely unless you have awful credit. And for those with really bad credit problems, perhaps you should be using your money to deal with credit obligations rather then going deeper into the hole with an expensive vacation.

 

Hank

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Posted (edited)

For younger people who have low credit limits because they are just starting out in their careers and have not yet had enough time to establish a good credit rating, another solution could be getting a parent (or other trusted person who has good credit) to cosign for you.

Lots of us have done this for our own children when they were first getting started.

It should work in reverse as well, (i.e., an older retired person on a low fixed income could get an adult child who is financially secure to cosign for the credit card).

 

The goal is to have your credit limit set high enough so that holds (or pending charges) are never anything you need to be concerned about.

Edited by varoo

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For younger people who have low credit limits because they are just starting out in their careers and have not yet had enough time to establish a good credit rating, another solution could be getting a parent (or other trusted person who has good credit) to cosign for you.

Lots of us have done this for our own children when they were first getting started.

It should work in reverse as well, (i.e., an older retired person on a low fixed income could get an adult child who is financially secure to cosign for the credit card).

 

The goal is to have your credit limit set high enough so that holds (or pending charges) are never anything you need to be concerned about.

 

Very good advice about older parents. We added my Mom onto the Visa account we didn't use. This helped her credit rating and allowed her to make purchases and do a bit of travel. She never abused it and always paid us the money when due. (Once in a while I may have told her an amount lower than what the actual bill was.) :)

 

Take care,

Mike

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