Lose your wallet or purse filled with cash and you may be out of luck. Lose your credit cards, though, and it may be a little hassle getting them replaced, but that's about it.

Under the federal Truth in Lending Act, the most you can be held responsible for is $50 in unauthorized charges. And that's only if your card was actually stolen and used. If someone just steals your card number without taking the card itself, your liability is zero. This is more protection than your debit card provides you.

Smart Strategy: Keep in a safe place a list of your credit card numbers and the phone numbers to call if they are lost or stolen (not in your purse or wallet). Call immediately if you think you've lost them.

Travel Advantages

Whether you're packing for a trip across the state or overseas, don't forget to pack the plastic. Major credit cards are convenient, widely accepted and offer you additional protections mentioned earlier - both for purchases and in case you and your wallet part ways.

When you venture overseas, you'll find that in many places, American Express, MasterCard and Visa cards will be accepted by many merchants - in some places, they'll prefer plastic over traveler's checks.

Besides the convenience, another advantage to using credit cards overseas is the fact that you'll usually get a better exchange rate than you can on your own through local merchants. Credit card purchases are exchanged at wholesale currency rates, which are usually very attractive. One caveat: Some card issuers tack on a one to three percent "conversion fee" on foreign credit card purchases, but not all do, so ask in advance.

Smart Strategy: Take your major credit cards with you overseas, but be sure to check your credit card receipts carefully to make sure the amount is correct (foreign currency may sometimes throw you off) and keep a record of your card numbers in case there is a problem.

Car Rental Savings

If you don't have a major credit card or only a debit card, it can be a hassle to rent a car. Some car rental agencies will not allow you to reserve a car with a debit card. (To learn more about the differences between credit and debit cards, see our publication entitled "When is a Credit Card not a Credit Card? Credit or Debit Card? The Great Debate") But if you do have one, you may be able to save a bundle if your card offers free Collision Damage Waiver (CDW) coverage. This allows you to decline the rental agency's expensive coverage. Many premium cards (like gold or platinum) and some standard cards offer this benefit. Just beware: in some countries you may have to buy coverage anyway - check with the rental agency when you book your car rental.

Smart Strategy: Use a card that offers free CDW when you rent a car and save the money on the rental agency's coverage. Always check before traveling overseas to find out if you'll be able to take advantage of the CDW.