5 Dutiful Ways To Travel With Debt
Sadly, debt isn’t a merry-go-round you can get on and off when you please. It stays with you until you do the right thing and pay it off. So, now that you’re about to do the wrong thing and travel, you’ll have to pack your overdue balances too. Let’s admit that no one can be mad at you for your decision. Traveling is an unbelievable experience and you should do as much of it as possible.
Still, going abroad while your credit cards are fully loaded is a dangerous prospect. Forget about the costs and think about the attitude. Every traveler has a moment where they think “screw it” and pay for things they can’t afford. Do that this time and it won’t be a very warm homecoming.
The good news is that traveling with *debt is doable as long as you’re dutiful. You will need to be proactive and savvy and resist temptation, but you can do it and have a good time with these tips. Here’s what you need to remember.
*Say it five times without getting tongue tied
Start as you mean to go on by paying for the initial expenses upfront in cash. That way, there won’t be any additional debt going onto next month’s balance which will stay there for months. Instead, everything you purchase will be things you can afford because you’re paying in cash.
Okay, you don’t have to draw out large amounts of money as it’s a phrase. What you need to do is use the plastic which settles the payment there and then. Basically, avoid credit cards and use a debit card instead. Current accounts take the money straight away so there is no waiting around for the balance to clear. Plus, you can only use the money you have and not the borrowed kind.
If this seems difficult, then you might want to reconsider going. Although, if that isn’t an option, then you can use the cash people inevitably give you in advance. Moms and dads and grandparents always have a couple of bucks set aside for your trip which will come in handy.
If you are going to borrow money, then make sure you do it properly. What this means is that you should find and secure the best possible loan. As a rule, borrowing from the bank is a terrible option because the interest is high and it kicks in straight away. A credit union is a much wiser choice as the rate is low and they only lend small amounts. So, the total you can get is not as big as if you went to a traditional lender.
As far as the personal finance options go, a piece of plastic is a useful tool while abroad. Now, if you can avoid it then you shouldn’t use one whatsoever. However, if push comes to shove, the promotions they offer are pretty cool. Obviously, 0% on purchases and balance transfers for two years help when you’re unemployed. But, so do the traveling benefits.
For example, some cards reward purchases with air miles and money off accommodation. Seen as you’re going to be staying in hotels and using airplanes a lot, this can work to your advantage. Always research the APR and the promotions before applying.
Part of traveling with debt is cutting costs to the bone where possible. Thankfully, the market for travelers is a budget one because hostels and bars understand that earning potential is low. Still, there are ways to slash expenses even further as long as you’re flexible. It’s about moving at the right times of day, week, month and season.
Flights are only dirt cheap when they are out of season. Therefore, you need to consider booking a seat when the deals are at their best. This may be during their winter when people don’t travel as much. Or, it may be on a Wednesday or Thursday when everyone is at work. The same goes for accommodation. In the summer, the prices skyrocket, which is why it’s best to see the world in the winter and spring months.
Aside from the above, you should factor in the religious festivals and holidays. Christmas is the pinnacle in the west, but in the east, it’s about Ramadan, Eid and Hanukkah. Know when these festivals begin and book around the dates.
The chances are high that you’ll use your card, debit or credit, while away. When it’s necessary, it’s not a problem. However, it doesn’t mean you won’t spend unnecessary cash during the process. After all, certain banks charge their customers handling and transactions fees. Although they charge about 1-1.5%, the money totals up to a large amount over a long period. You’ll have to withdraw cash a couple of times a week, which is around $10.
Because you need as much money as possible, it’s best to eliminate these expenses beforehand. To do that, you’ll need to switch banks and get a card you can use abroad as if at home. Another option is a prepaid travel card as it’s made for withdrawing and making purchases overseas.
Don’t always listen to what the bank says as they might try and upsell a product. Instead, go online and check out unbiased reviews from people who have used a certain card. That way, the one you choose should work for you and not the supplier.
Pay The Minimum
Remember when the introduction said you couldn’t leave you debt at home? Well, it’s true. Just because you’re in Australia or Europe or Southeast Asia doesn’t mean the creditor doesn’t want their cash. The good news is that you can pay them the minimum amount until you get back and increase your earnings.
However, there are caveats. The main one is that you can’t miss a payment or else the rate rise. So, head to your online banking account and make sure there is a debit which leaves your account every month while you’re traveling.
Isn’t that easier than worrying about debts? Won’t you have a better time for it?