Anna Maria Richards
With the current global financial crisis and looming inflation rates on the horizon, taking a vacation is undoubtedly a luxury for most people. It can be tough to resist the temptation to take a much-needed vacation if you have a credit card to fall back on during hard times like these. But that might not always be the best idea.
There are a couple of factors you need to take into consideration when taking this serious decision as it might be the best choice for your finances. In most instances, unless you have savings to pay off the credit card charges, taking a vacation on your card can be a bad idea. However, there are also a couple of other ways you can reduce the payments for your credit card on your next vacation.
Should You Take a Vacation on Your Credit Card
In all honesty, the answer largely depends on your current financial condition. While it is true that using a credit card has lots of advantages as they make payments and other travel processes easier, taking a vacation using cash only often costs you less. Then there are also the many disadvantages that come with taking a vacation on your credit card.
Firstly, it can be quite easy to overspend on your credit card even if you have offers and discounts on your card. They also tend to have high-interest rates, which can be quite difficult to pay off unless you have extra income avenues. And finally, overcharging your card during vacation can result in a bad credit score which can be difficult to recover from.
On the other hand, if your credit score is good and you’re not tied down to any loan or EMI payments then taking a vacation on your credit card is the best way to go if you can afford it. Whatever you decide to do, make sure to first evaluate your finances before taking that affection.
If you feel comfortable using your credit card for your vacation, here are three excellent ways to minimize your costs and make the most out of your vacation.
Take Advantage of Welcome Offers
If you recently got your credit card, you can get bonuses to spend in the first couple of months when you get your new card which can be a great opportunity to charge it for a vacation.
Many cards also offer good signup bonuses that can be used on your vacation as well. Most new credit card users fail to make use of these offers and bonuses to their own detriment.
Aside from utilizing the welcome and signup bonuses, make sure to sign up for your card provider’s newsletters so that you never miss out on the best deal.
Get Rewards
One thing you should keep an eye out for if you want to take a vacation on your card is the point, milestone, and cash-back offers provided by your card provider. Many hotels, resorts, and airports partner with credit card companies to provide discounts or the opportunity to cash in milestone points earned by using the card on other purchases.
You should always keep track of your credit card charges and make sure to redeem the offers, as they often come with an expiration date. For example, a $4,000 trip can easily give you up to $1,000 in discounts and bonuses to make your vacation that much better.
Improve Your Credit Score
If your credit card score isn’t looking good, you should look for ways to improve your credit score. There are a couple of ways you can improve your credit score, including paying your bills on time, disputing credit card errors, and making rent and utility payments on your card.
To sum it up concisely, focus on paying back your revolving credits as much as possible.
If these options aren’t viable for you, there’s always the opportunity to apply for vacation loans for bad credit if your card provider has the option available. These loans are tailored to make card payments much easier down the line. You should aim for a 30 percent credit utilization as much as possible as it’s considered the ideal baseline.
Thinking Before Taking the Decision
Taking your next vacation charging your credit card might seem daunting, even if you have money in your pockets. But as long as you play your cards right, you can keep your card payments and charges in check. Good luck with your next vacation, and here’s to hoping you have a lovely time.
