When it comes to vacation rentals and other non-traditional accommodations, how you pay is just as important as how much. The choice between offering up cash and using an online payment system could make the difference between a successful transaction and a vanishing investment. Among the most common lodging woes: withholding (willful or not) of a deposit -- after a cancellation of a booking or alleged damages -- and blatant scams.

Here are the best ways to pay for alternative lodging (apartments, villas, houses), plus some tips on how to safeguard against someone from stealing what's supposed to be your getaway.

3 Vacation Rental Tips: Pre-Trip Planning

The best way to protect your vacation is to prepare for the worst. The more precautions you take upfront, the less likely you'll fall prey to pocket-emptying ploys down the (potentially bumpy) road.

Shop in the right place. Reputable sites like VRBO ( and from HomeAway ( will offer basic security features -- they'll conduct background and address checks, certify hosts with a proven track record, host community discussions, and post uncensored reviews. Many also have internal security systems that flag suspect activity, which will remove shady postings and bar questionable parties from the site. As an added measure to deter cons, the peer-to-peer rental site Roomorama ( has set up its own payment system that won't release funds to property owners until after guests successfully check in. (A secret six-digit code unlocks payment.)

Check out guarantees and protection plans from vacation rental companies. Some vacation rental sites also offer guarantees not offered by traditional travel insurance. Remember that regular travel insurance policies will make reimbursements in the case of trip interruption or cancellation (a hurricane has shut down the airport, and there's no way for you to get to your destination) -- but not if your apartment doesn't match your expectations or if you've been scammed out of your deposit (and of a place to stay!).

FlipKey (, for example, has a protection plan tailored specifically for rentals that provides up to $25,000 of coverage, while HomeAway's ( comparable product -- Carefree Rental Guarantee -- will reimburse up to $10,000. Wary about putting down a deposit? HomeAway's Property Damage Protection plan eliminates the need of a deposit altogether. For a non-refundable fee of $39-$59, travelers are covered up to $5,000 for any damage that occurs to the property.

Get a contract. Before you put down a deposit, or fork over any other type of payment, make sure that your contract spells out the mutually agreed upon terms of service: the dates of arrival and departure, the method and timing of the payment(s), the cancellation policy, and any additional forthcoming charges: pet, pool-heating, or cleaning fees, and hotel occupancy taxes, to name a few.

5 Ways to Pay for Vacation Rentals

1. Credit Cards

Out of all payment options, credit cards offer the most protection against fraud or wrongful charges, limiting your liability and even crediting back your account while your case is under investigation. (Check with your credit card company for details on coverage.) You may encounter foreign transaction fees if you rent accommodations abroad, but the 2-3% charge is waived on many travel-centric and top-end cards like the American Express Platinum, Chase Marriott Premier, and Citi ThankYou Premier. Note: Vacation homeowners may discourage (or not even accept) this method of payment because of the sometimes hefty fees on their end.

Bottom Line: Use a credit card if you can.

2. Online Money Transfer Services

Using PayPal ( or other money transfer services like Moneybookers ( is one of the most secure and hassle-free methods of payment if you're booking a vacation rental abroad and if the property manager doesn't have his own merchant account. PayPal will safeguard your personal information, shielding you against identity theft and other misuse. Should a problem arise, accounts -- and account holders -- can be traced, crucial for a proper investigation.

Fees vary from service to service: For example, if the owner of your rental has a business account on PayPal, you might not have to pay any fees at all. If the owner has a person-to-person account, then expect to shell out for transfers made with credit or debit cards (payments from bank accounts are free): 2.9% plus 30ยข per transaction within the U.S., and 2.9-7.4% plus a fixed fee determined by country for purchases abroad. If currency exchange occurs, then you can factor in an additional 2.5%. Steep? Yes, but since PayPal's purchase protection plan doesn't cover real estate (such as vacation rentals), it might be worth the extra charge for a credit card's liability coverage.

Bottom Line: If the property owner is picking up the transaction fees, go for the credit card-PayPal combo.

3. Checks

Property owners who don't typically make a business out of subletting their apartment or home may request a personal check. Checks are generally a safe method of payment, though funds may be difficult to recover if lost to fraud. Also keep in mind that sensitive information (like your account number and address) could fall on the eyes of the wrong beholder. Checks are fee-free (for you at least); the recipient of a foreign check will be paying for the cashing and clearing. However, because apartment owners won't want to rent until a check clears, paying by personal check is not a great last-minute option.

Bottom Line: Personal checks are best for fee-free domestic transactions with a trusted source.

4. Cash & Money Orders

It almost goes without saying: avoid dealing with cash and money orders (like Western Union or MoneyGram) if at all possible -- it's the easiest means for the unscrupulous to disappear with your money without a trace. Some vacation rental sites go as far as banning property owners who operate only in these methods of payment (big red flag).

However, some vacation rentals require cash for the cleaning fee or damage deposits. In which case, it's best to avoid making advance payments. Try to postpone this last round of payments until you reach your destination -- when you get a walk-through of the apartment, for example. If possible, pay the property owner or manager directly, and get a receipt for the sum rendered.

Steer clear of any vendor who insists on only cash payments or wire transfers or who is pushing for speedy deposits (lest your slot be filled by another traveler, for example).

Bottom Line: Avoid cash payments whenever possible; otherwise, get a receipt from the property owner or manager.

5. Home Exchanges

Though no money changes hands in home swaps, your abode acts as collateral deposit. House exchanges require an enormous amount of trust from both parties, and the thought of all the things that could possibly go wrong can overwhelm you: a ransacked home, a dented car, a fictional villa in a foreign country where you can barely sound out the translation for "Help!"

These are rare occurrences, but it doesn't hurt to do some careful planning, says John Mensinger, aka the self-appointed Home Exchange Guru ( He suggests a one- to six-week "getting to know you" period of e-mail exchanges and Skype conversations to do the proper vetting and a thorough fact-check: Does the location of the house match what's online? Do the search results for the purported homeowner turn up angry rants on community message boards? Does the person claim to have a Ph.D. but can barely string together a sentence?

Mensinger also insists on meeting in person at the start of the exchange, not only to swap keys but to build a relationship and mutual respect. "People will be less likely to do you wrong if they know you," Mensinger says.

Bottom Line: Research the other homeowner carefully before swapping homes.