Vacation on credit
How to finance holiday expenses? – this is the question we face when planning summer trips and depending on the wealth of the portfolio, we make the destination and type of activity dependent. Installment loan, credit card or maybe savings? We suggest which solution will be the most advantageous.
It is worth anticipating your expenses, including holidays, much earlier. While the extra costs associated with car repairs can usually not be planned, the holidays are repeated every year and it is worth preparing them in advance, also in financial terms. Therefore, for the next trip it is good to save right after returning from the previous trip. Putting off a small amount every month will allow you to accumulate a sum throughout the year that will cover all or at least a large portion of your holiday expenses. Then going on vacation will not be as much a burden as in a situation when we wake up with these expenses with the proverbial “five minutes to twelve”. It is worth saving – $ 100 a month after a year will give us $ 1,200. Probably in most cases it will not be enough for a holiday trip, but at least in part will cover the costs.
Credit? Credit card?
If we still lack the full amount for a holiday trip, there are two solutions. One of them is the verification of holiday plans. We can move our dream trip to another date, or go to another, cheaper place. Another solution may be to finance the missing amount with a bank loan. The choice of the right instrument also depends on our financial capabilities. If we know that the loan will be for a very short period and we will be able to pay back the entire debt in the next month, it is worth borrowing on your credit card. This will allow you to get a loan, which can be free for almost 2 months. We will not pay any interest if we repay the entire liability before the end of the so-called interest-free period. What’s more, the credit card is usually issued without any additional commission fees, so it can actually be free money. However, remember to make only non-cash payments with your credit card. If we decide to withdraw cash at an ATM, then we will pay interest on this amount. With a credit card you should only withdraw cash in really emergency situations.
Pay off your holiday debts in a few months
Installment loans will be a better option. A fixed monthly installment will mobilize us for regular repayment, and spreading the amount over several months will be less of a burden than repayment of the entire debt, as in the case of a credit card. However, when choosing repayment in installments, do not extend the loan period excessively. Remember that a longer repayment period means higher interest. It is worth to pay off holiday debts before the start of the next vacation. Bringing to a situation where we will still pay the obligations from the previous trip during the next vacation is a straight path to the debt spiral. Let’s borrow wisely and plan our expenses well in advance.
Think about insurance
For holiday trips, you should also take advantage of travel insurance. The purchased policy will protect us in the event of loss of luggage, costs of medical treatment abroad, costs of rescue operation or expenses related to car repair. By purchasing a policy with a trip at a travel agency, we can also insure you against the need to cancel your trip. The so-called travel insurance is often included in the package along with the credit card, we can also buy it at a travel agency. However, as always in the case of insurance, it is worth checking the scope of insurance, insurance sums due and the list of exclusions. The policy, to properly secure us, must be tailored to our needs, the direction of our trip abroad, as well as planned activities. Sometimes it is worth spending a dozen zlotys more, but in return receive a product that meets our expectations.