How To Travel The World Without Ruining Your Credit
Americans love to travel. In fact, according to the Travel Bureau, there were over 72 million trips abroad in 2016 alone. It’s true that a lot of people in our country are fortunate enough to explore other lands, but that comes with a cost. Beyond just the monetary value of a plane ticket or lodging, a lot of us make impulsive decisions or end up in a bind that puts us at a financial disadvantage when we return home.
While most folks don’t think about how their credit score can be affected abroad, the chances of it happening are more frequent than you might imagine. Moreover, even if that sounds scary, rest assured that as long as you take a few precautionary measures, you’ll be smooth sailing in no time. That’s why I’ve compiled a few starting points for you to consider if you’re going overseas. Check them out below:
Check In To See Where Your Current Financial Picture Is At
Before you can even begin thinking about traveling the world, you should first check in on not just where your credit score is at but your entire financial picture. Keep in mind; this is more than just making sure you have enough saved to cover your bases but factoring in the unexpected as well. Additionally, while a credit card could potentially be your best friend while traveling (more on this later), it’s not the best idea to be reliant on them for the things you might impulsively want or need. The name of the game is being financially savvy and smart in strategizing how you can get the most bang for your buck out of your endeavors.
To start, look at your credit score and ask yourself if it’s healthy enough to cover anything you might need in the near future. Especially if you’re young, your score might need some work, and as a creditrepair.com notes, there are plenty of paths you can take towards credit improvement without it taking several years. Additionally, the type of travel you’re doing is going to play a significant role as well, from an internship abroad to taking a gap year, as your credit is going to be the lifeblood to what dictates your financial freedom while you’re abroad. However, coming up with a plan beforehand will not only help put you at ease but can help you save tremendously in the long run as well.
Credit Is Your Friend
According to creditcards.com, 62% of credit card users utilize their credit towards travel. Why is this the case? Because spending money on travel with credit helps you earn money towards more endeavors. As you’ve probably seen before, credit card companies offer travelers miles for every purchase they make, which can bode well for you if you’re trying to go from country to country. For some consumers, this can take care of a huge chunk of their travel expenses, with some solely utilizing their revolving credit as a means to earn trips. Yes, despite how much credit cards can be a plague on our financial lives, in this case, it’s actually a pretty advantageous tool.
In terms of using your credit card while abroad, I’d suggest you pay close attention to the places you’re going and if they accept the type of card you have. Some card issuers have international cards that can help you avoid fees per transaction, as well as when you’re in need of cash. This can be a pretty smart way to travel but be wary of overusing your card as your lifeline. Not only would you be in a lot of trouble if it got stolen, but getting carried away with spending on it can put you in a tough position, one that no traveler should ever have to be in.
Be Prepared For The Unexpected
While a lot of us get carried away with excess spending when we travel, doing so with your credit card can be pretty threatening if you’re not careful. This puts you in a position that takes away from being able to spend the money you need in an emergency, as well as leaves you susceptible to others taking advantage of you. Furthermore, while I’ve never been at the point where I’ve needed to apply for a credit card overseas, I can imagine it’d be a pretty serious position to be in. However, this is why proper preparation regarding your credit is so imperative.
As you prepare for your journey, search around for traveler credit cards, as well as programs that could be useful to maximizing your credit/experience abroad. While I know you’re probably excited to board your plane tomorrow, take the time to do this right. After all, you only get one shot at this before you go international, so what’s the rush in making sure one of the most amazing experiences you could have is done right?
