You are planning a trip and you couldn’t be more excited. You have every detail planned from when you will be staying to the adventures you will take. However, you may be unsure of the best way to pay for the trip. Should you use a credit card? Or should you take out a personal travel loan? Here are a few points to help you decide.
Budgeting Tool
As credit cards typically give you a very high limit to spend, you may be inclined to keep charging expenses to your card while on your vacation, going over your budget quickly. When you return home, your credit card bill may come as quite the shock!
If you opt to travel using personal loans, you will know exactly how much money you have to spend. The amount of the loan will be your trip budget and there is no overspending as you only have so much! Seems like a smart way to make a financial plan for your trip and stick to it.
Theft
When you travel, or even when you are at home, using a credit card can be risky. A vendor could easily steal your credit card information and one swipe at a fraudulent machine could result in your credit card information landing in the hands of someone else. This is especially dangerous when you are traveling somewhere new where you are unsure which vendors are reliable. Credit card theft actually happens quite often to unsuspecting tourists and is a danger of relying on plastic to pay for your trip. Luckily there is another option!
If you opt to pay for your travel using a personal loan, you won’t need to swipe your credit card every time you want to make a purchase! You can use cash, checks or even cashier’s checks, all of which are much more secure. Skipping the credit card is a safe way to pay when on a vacation.
Improve Your Credit
Credit cards all have limits, delegating how much money you can spend. When you spend close to that limit, your credit score can drop. In addition, if you have a revolving balance, you will be paying high interest rates on the money you spent until you are able to pay off the balance. Even if you make payments on time, this can harm your credit score as your credit card balance is ongoing.
With a personal loan, you get a set amount of cash up front and make fixed monthly payments thereafter. There is no ongoing balance or increasing interest rates. Instead, the fixed, installment type loan will help you improve your credit, showing that you are capable of making monthly payments. The payments will also always be the same, making them easier for you to manage.
Credit cards can be useful in many situations but personal loans are a much better option when it comes to planning and paying for travel. So rather than reaching for the plastic, apply for a travel loan to fund your vacation. You will be happy that you did!
