4 reasons to be careful about using credit cards to finance a vacation
Chances are you’ve experienced buyer’s remorse at one time or another. We’ve all been there — that moment when you say to yourself, “What was I thinking?” or “How did I think I could afford this?” It’s never a good feeling to experience, but it’s even worse when the feeling comes on the heels of a much needed vacation — taken because you want to relax and de-stress. The tendency to overspend when using credit cards for vacation expenses is just one potential pitfall when it comes to travel and plastic. It’s easy to pull out of your wallet while away, but once you get home you might wish you hadn’t. Which leads us to our point…
It pays to be careful when using credit cards to finance a vacation. Here’s why:
- You have to be vigilant about keeping your credit card information safe. Skimming, ATM fraud and shoulder-surfing are just some of the kinds of credit and debit card fraud you can encounter. As travel expert, Rick Steves writes in Bank Card Precautions for Travelers, “…the safest way to pay for your meals and other purchases is with cash.”
- The psychology of using plastic instead of cash is a slippery slope, especially when you’ve got that “what the hell — I deserve this,” life is good vacation vibe going. It’s the perfect setting for overspending.
- It’s hard enough to get over the ‘back to reality’ blues when you’re home from your trip and realize work and all those everyday stressors didn’t miraculously go away while you were gone — you’re back, and so are they. The last thing you want is to add the dreaded, multi-page credit card bill…coming soon to your mailbox or inbox. Spending hangovers are not fun.
- The ability to pay only the minimum due on your credit card bills and worse yet, to keep charging on top of what you’ve already spent on your vacation, is a recipe for a very long payoff period. If you’re not disciplined about paying more than the minimum while refraining from using the card, the balance can hang around your neck for years.
Monthly reminders of vacation good times and one-of-a-kind purchases are not so fun when they come in the form of credit card statements. No one wants that kind of souvenir. Reliving the sunset on that private winery tour, and feeling the excitement of buying a beautiful Italian handbag, is something better done via the pictures you posted on Facebook and Instagram, not by looking at a lingering credit card balance.
Although saving up and paying in full is the best way to finance travel, it’s not always possible. Perhaps an expected bonus check is coming later than anticipated, or your vacation savings progress has been knocked off track by an unexpected car or home repair. These things come up occasionally, even for the most well-planned and budgeted of us.
Whatever the reason, if you need to finance travel that you’ve been longing (and planning) for, then consider a getaway loan. The beauty of using a vacation loan over charging up your credit cards is that, as long as the payments are on time, it can be much kinder to your credit score. In some cases, it can even help you rebuild credit. An installment loan doesn’t negatively effect your credit utilization ratio like revolving credit balances, and it doesn’t weigh as heavily upon your credit score.
Interested in seeing how much of a getaway loan you qualify for? See how LendingPoint loans are better, and apply today. Check out our handy loan calculator that lets you see monthly payments needed for various loan amounts and terms.
And, for ways to save money when you travel, be sure to check out our Travel Blogs: