How to Plan a Fabulous Credit Card-Free Vacation
Have you ever returned home from a fantastic vacation only to be greeted by credit card statements with much higher balances than you expected?
You’ve had a wonderful time but now you’re wondering how you’ll pay for it.
It’s true that, if you use your credit card to pay for all or part of your vacation, you’ll almost certainly spend more than the cost of your vacation.
So, if you pay for a $2,000 vacation with your credit card, you’ll end up paying $2,300 for it, assuming the interest rate is 15 percent and you pay the total amount back within one year. If the interest rate is higher than this or you take longer to repay the amount, you’ll pay more.
Also, putting everything on your credit card — from flights to hotels, from meals to drinks, from activities to excursions — means that you might not realize exactly how much you’re spending in total and you’ll be likely to spend more than you can afford.
But is there another way? Is it possible to pay for your vacation without using your credit card?
Plan Your Vacation in Advance
Ideally, it’s a good idea to plan your vacation a year in advance but it’s still possible to plan and pay for a vacation within six months.
Decide:
· Where you’d like to go — you may have a shortlist of three places or a proposed itinerary for a road trip.
· When you’d like to go.
· What kind of accommodation you’d like to stay in, whether it’s a hotel, apartment, camp site, etc.
· What you’d like to do while you’re there — list day trips, activities, entertainment, etc.
Then find out:
· What is the least expensive and/or most convenient way to get there? Is it car, train, bus or air?
· Will you need to rent a car while you’re there?
· Would the trip be cheaper if you changed your travel dates slightly?
· What are the most cost-effective options for accommodations?
· What is the cost of each of the things you’d like to do while you’re there?
Make a Vacation Budget
Based on the information you’ve gathered, set up a spreadsheet and make a vacation budget using the following categories:
· Transportation (including car hire at the destination)
· Accommodations
· Food and drink
· Activities, attractions and entertainment
· Miscellaneous/contingency costs
Fix a daily budget for food and drink. Save money by buying sandwiches and drinks from a grocery store, and heating up food in the microwave in your room or apartment. Look online for inexpensive restaurants that have good reviews in the area where you’ll be staying.
Once you’ve decided how much you’ll spend in each category, add up the total cost of your vacation. Then, divide that amount by the number of months before your vacation. This is the amount you’ll need to save each month to ensure you can pay for your vacation without using your credit card.
However, for some things, such as flights, you may need to pay large amounts in advance. If you do need to borrow money to cover these expenses, look for less expensive options than your current credit cards, such as an overdraft or taking out a new credit card with zero percent interest for an initial period.
Make paying off the money you’ve borrowed the priority. Then you can start to save the rest of the money you need for your vacation.
Book in Advance
You may receive discounts if you pay for hotels a few months in advance. The same goes for plane and train tickets. Generally, the farther in advance you book, the cheaper it is.
You may also be able to pay in installments if you book in advance. This will make your budgeting easier.
Save Money or Even Make Money on Accommodations
Airbnb has a wide variety of places to rent from rooms to castles in over 190 countries worldwide. The cost of renting via Airbnb is often cheaper than paying for a hotel room. An extra bonus is that your host may give you lots of tips and insider information about the local area.
Many Airbnb rentals have a kitchen where you can heat up food or prepare meals, saving you money. At the very least, you could eat breakfast in your Airbnb home every day.
Also, consider renting out your home on Airbnb while you’re away. The money you make will pay for some of your vacation.
One way of going on vacation without paying a cent for accommodation is through a home swap. That way, you’ll be staying in a home-from-home rather than a cramped hotel room.
However, you may have to be more flexible on dates and location. There are many home swap websites to choose from, including HomeExchange and Love Home Swap.
Pay for Part of Your Vacation with Loyalty Points
Use loyalty points to help pay for your vacation. If you travel regularly for business, you may have built up a lot of points on your airline or hotel loyalty cards without even realizing it.
Check your balances and take advantage of them by booking a flight or a hotel for your vacation using your loyalty points as part or full payment.
Rent a Car or Book a Hotel Room Without Using a Credit Card
It’s a myth that you can’t rent a car or book a hotel room without a credit card.
You can use your debit card but you may be required to leave a deposit that will be returned to you after you bring back the car with no damage or leave the hotel room in good order.
Pay in Cash for Entertainment and Dining
If possible, book tours and activities in advance, so that you don’t have to worry about paying for them while you’re on vacation. This will make it easier to keep track of your spending while you’re away, too.
Withdraw the amount of money you’ve decided to spend on dining and entertainment each day and pay for everything in cash.
If you don’t want to carry a large amount of cash, transfer the total amount of money into your checking account and keep track of everything you spend on your debit card.
Plan Ahead for a Credit Card-Free Vacation
With some forward planning, you can pay for all or most of your vacation without using your credit card.
If you save money or even make money while you’re away from home, your well-earned vacation will cost less than you expect … and there’ll be no surprises when you return home.
