A vacation has many benefits besides just downtime. According to WebMD, people who take vacations lower their risk of heart disease and reduce their stress levels. But taking a vacation can be risky for your credit. The extra costs of travel, lodging, and dining can strain your finances, and using credit cards abroad often comes with added fees and hassles. It can also be easy to forget to make monthly payments while you’re on vacation, and even one missed payment can potentially lower your credit score.
Here are a few ways you can protect your credit score while on your next vacation:
Start Saving For Your Vacation Several Months In Advance
Being financially responsible is at the heart of keeping a good credit score. To ensure you don’t have to go into debt to finance your vacation, start saving several months in advance. Giving yourself plenty of time to save makes it easier to get the money you need to truly enjoy your vacation.
Make a Vacation Budget, and Stick to It
Vacations have a way of draining bank accounts if you’re not careful. While you might think that having a vacation budget only adds stress when you’re supposed to be relaxing, the opposite is true. Without a budget, you’re only going to be more stressed when you come home and discover that you spent twice as much as you planned on spending.
Your vacation budget should include all your planned expenses, but it should also include enough wiggle room for spontaneous activities.
Plan How You’ll Pay Your Bills While You’re Away
One of the tricks to maintaining a good credit score is to never miss a payment on your monthly bills. Since a vacation disrupts your usual routine, it’s important to plan ahead to make sure you don’t miss any payments while you’re gone. Setting up automatic payments is a good way to ensure you never miss a payment, and most credit cards allow you to schedule a payment to go out several weeks in advance.
If Traveling Abroad, Get a Credit Card That Doesn’t Charge You For Overseas Transactions
Credit cards often charge transaction fees for purchases made overseas. If you’re planning on using a credit card while traveling abroad, you’ll save big by using a card that doesn’t charge fees for these kinds of transactions.
Take Advantage of Credit Card Rewards
When used responsibly, credit cards have their benefits. Many cards offer special rewards or “cash-back” programs for vacation expenses such as money spent on hotels, airline tickets, or restaurants.
Remember that to truly benefit from a credit card rewards program, you need to pay the balance down to zero almost immediately. This way you avoid losing money on added interest, and you still get the rewards for your purchases. So if you’re using a credit card on vacation, make sure that you have cash in the bank to back up every single purchase.
Let Your Credit Card Provider Know About Your Vacation Plans
As a security precaution, your credit card provider might lock access to your account if it sees any unusual purchases. To avoid losing access to your credit card while on vacation, call your provider’s customer service and let them know when and where you’ll be vacationing so that there aren’t any surprises.
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photo credit: SuperJet International via photopin cc
photo credit: joeycrabb via photopin cc
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