Traveling is one of those things we expect to spend relatively much on. Especially when it comes to vacations or weekend getaways, there’s no escaping the fact that we might have to dish out a huge chunk of money from our pockets. That is not to say, however, that traveling should leave us broke. Although traveling will definitely cost you something, it should not cost you everything. In this article, we will talk all about the art of wise traveling. The main focus of this article is your finances, where we will show you some tips and tricks to minimize spending while maximizing fun.
A quick heads up before we proceed, this article will highlight the use of credit cards as a tool for better spending strategies. If you’re keen to apply what you’ll be learning in this guide, check out some of our recommendations for the best travel credit card you can have right now.
What is a credit card?
Credit cards are a form of payment cards issued by banks and financial institutions which allow users to pay for goods or services through credit. Essentially, credit pertains to the process of you using the money of the bank or the financial institution to pay for the goods or services that you want to buy or avail of. In return, you promise to return the money that you owe them through future repayments.
Credit cards often have limits, called a “credit limit,” which is accompanied by a “credit score.” Typically, the higher your credit score, the higher your credit limit will be. Your credit score is determined by active you are at repaying your past credits or debts. If you are always making payments on time, then you’ll likely have a higher credit score. Because you have a higher credit score, meaning that you are most likely to pay on time, the bank will have better trust in you. With this, they can give you a higher credit limit, which only means that you can pay for more expensive items using their money.
At this point, you’re probably thinking to yourself: credit cards lead you to owe money, and that’s debt, so why would a “guide to wise traveling” recommend that I lead myself to debt? Well, to answer your question, here are some of the most useful advantages of using a credit card rather than cash.
You can keep your cold hard cash.
There is no denying that cash is the absolute king when it comes to any situation. It’s the most universally accepted form of payment, and you can pay cash to a luxury store when buying thousands of dollars worth of items as much as you can pay cash to a grocery store when buying gums or chips. When traveling, you’ll never know what will happen and when you will need your cash. Nevertheless, it’s always best that you’re prepared for what’s coming and that you have the cash to back you up in case things go south.
You can increase your credit card score/rating.
If you actively use your credit cards, then you are going to increase your credit score or rating at the same time. This allows you to have a higher ceiling for the things that you want to buy in the future. It also makes sure that your credit card won’t get declined at times when you really need it to work.
Discounts, rebates, promotions, etc.
Using credit cards for payment is actually incentivized through discounts, rebates, and other promotions. This means that you can actually save a little bit of money if you choose to pay using a card. One of the biggest highlights when paying via credit cards is insurance. This is especially relevant for those big purchases, such as computers, vehicles, and more. Typically, the bank will provide you with a free insurance policy for using their credit card. In contrast, if you pay by cash, then you might be required to get a separate insurance program entirely.