A long holiday abroad is always an exciting prospect and can keep us going through the long working weeks. Planning a trip in advance is a great way to reduce costs and enjoy the holiday even more once you’re there. A key part of your planning will be deciding how to pay for the trip and expenses whilst away. Credit cards are the choice of many due to the travel insurance benefits often provided by the card provider. If this is you, here are a few tips to keep control of your finances and maximise your card benefits to make your trip go smoothly.
Reap the rewards
Many credit providers have promotional offers and reward programs to entice you into applying for a credit card. If you choose wisely, these offers can be helpful when paying for your trip. For example, you can cash in reward points to pay for your flight, hotel room or car rental – reducing the overall cost of the trip. You can even find promotional offers that save on the cost of day trips when on holiday. Planning your trip in advance will give you time to search for the credit card that will maximise these benefits.
Restrictions and fees
When planning your travel and credit cards, you should also consider the foreign transaction fees and the types of cards accepted where you are going. Taking a card on holiday that can’t be used is of no use, whilst paying foreign transaction fees every time you spend will only increase the cost of your holiday. Many credit card providers now offer no foreign fees so look out for this feature when comparing.
Only take the cards you need with you on your trip and store the rest in a safe place at home. Taking credit cards away that you don’t plan to use increases the risk of them being lost or stolen. Also, only take the money or credit you need with you each day. If your wallet does get lost or stolen you will lose part of your holiday spending budget but not everything. Many hotels provide a safe in the room where you can store the remainder of your money and cards.
Tell your provider of your plans
You should inform your bank and credit card providers if you are travelling out of the country. Let them know where you are going and how long for. This can usually be done within your online portal for the bank or credit card. If you do not tell your provider, they could flag foreign transactions as potential fraud and put a temporary freeze on your account, restricting your access to funds. This freeze will stay on the account until they are able to contact you and verify the transactions, which may be difficult if you are in a remote area.
Set up automatic bill pay
Credit card repayments are typically paid monthly on a specific date. If you are travelling over this time and do not have access to a phone or internet to make the repayment you could face penalty charges. Whatsmore, if you are on a promotional interest rate and miss a repayment you will lose the promotion and be stuck with a higher APR, which will increase the cost of borrowing. To prevent this, set up an automatic direct debit from your bank account to keep on top of your payments whilst you are away.
Whilst in holiday mode we may be tempted to ‘pay now and worry later’. What’s one more excursion or fancy dinner out right? Unfortunately, overspending on holiday will lead to unwelcome bills when you return that you may struggle to repay. Setting a budget for your trip will help you keep track of your spending so your holiday doesn’t turn into a nightmare when you get home.