Summer vacation is a time to take it easy, enjoy life and have fun. Just put those feet up in the hammock and relax, right? Who wants to spend time worrying about their finances when the sun is shining, temperatures are balmy and there are places to go and things to do? Having a fun and carefree summer vacation can actually be a bad thing... for your credit score. Reckless spending habits on your holiday can play havoc with your future credit payment history, quickly rack up debt and if you haven't planned carefully in advance, end up costing you more in the end. A little proactive planning before your vacation starts can help avoid some serious long term post-vacation credit score consequences. Here are some tips to help keep your finances and credit score on track:
Make a plan for your spending - review your finances well before you leave on vacation to ensure your holiday plans are financially feasible and that you have enough time to save up the funds needed for your trip. Spontaneity is often one of the best parts of being on vacation, but it can also end up being one of the most costly! As best as you can, plan out where you want to go and what you want to do in order to put a realistic budget together. Don't forget to give yourself a little "wiggle room", because hey - you are on vacation after all! Having a firm grasp on how much things will cost and how much you are likely to spend is a good start to keeping your credit score healthy while you are away.
Stay disciplined - it is important that once you have set your daily spending budget that you stick to it. Each little "oh - just this time" moment will add up. Keep track of how your spending is going each day by documenting all of your purchases.
Research free activities - chances are there are free activities or amenities where you are going. Take in the free breakfasts and activities offered by your hotel. This will stretch your budget further.
Use rewards and perks - do any of your loyalty cards offer rewards or perks? Get to know the usage opportunities and restrictions on each of your cards. You may be able to get discounted or even free activities, items or meals during your trip.
Protect your credit - you have worked hard to keep your credit score healthy at home, so don't forget to take care of it while you are away. If possible, limit the number of cards you take with you so they are easier to keep track of. Make sure you know where your credit card is at all times and always err on the side of caution if it isn't on your person. If the unthinkable happens and it goes missing, report it immediately to the credit card company.
Don't forget about your utilities and bills while you are away - you may be on vacation, but your bills aren't! A good option is to automate your payments so you don't have to worry about them while you are away. This also includes any debt that you are currently working to pay down.
Check your credit when you get home - it is always a good idea to keep an eye on your credit score. Mistakes can happen and they can cause incorrect information to show up on your credit report affecting your overall score. Review your credit card statement carefully to ensure all charges are indeed yours. Reviewing your credit report is also an important step especially if you have missed paying a bill while you were away or if you suspect your identity may have been compromised on your trip.
A final thought - remember; don't charge everything on your vacation to your credit card as you will most likely be unable to pay everything off at once. This will result in the amounts actually owed increasing (due to interest charges) and possible issues for your payment history if you are carrying over a large balance. Did you know that even ONE late payment can negatively affect your credit score?
Do you have questions about your credit score and how it affects getting a mortgage? Contact a trusted professional at One Link Mortgage & Financial today! We are here to help.