Using Your Credit Card to Fund Vacations
Should You Use Your Credit Card to Fund Your Vacations?
So you want to go on a vacation but you just don’t have the cash at this point in time. You do, however, have plenty of credit on your credit card. Should you use this line of credit to fund your vacation or should you hold off until you have the cash to spare?
Credit Card Vacations Are Okay
While paying for your vacation with cash may be the ideal situation, paying for your vacation with a credit card is not a bad idea. The trick is making sure you have a plan to pay your vacation off in a decent amount of time.
Interest Free Is Best
If you have a credit card that’s offering zero interest for a certain period of time, that’s the credit card to use for your vacation. Simply make sure you pay off the credit card before the zero interest offer is up and it will be just like paying for your vacation with cash.
Avoid Rewards Cards
While it may be tempting to pay for your vacation with a rewards credit card due to the rewards you’d accrue, if you’re not going to pay for the balance in full when the bill comes in at the end of the month, you might want to avoid doing that. Rewards cards hold a higher interest rate than other credit cards and using a rewards credit card will cost you more in the long run.
Enough Credit
Another thing you want to do is make sure the credit card you use for your vacation has enough credit on it. If you think that a credit card with a $500 credit limit is going to get you through your vacation, you might want to think twice. Try to keep all of your vacation expenses on one credit card and make sure that credit card has a high enough credit limit.
Set a Budget
Before you go on vacation, set a budget. Just because your credit card has a $10,000 credit limit doesn’t mean you should use all of that credit on your vacation. Figure out before hand how much you can afford and make sure you don’t charge more than that amount to your credit card.