Last Updated on March 2, 2023
Traveling in a post-pandemic world is decidedly more expensive than it used to be. Data reveals that flights alone are around 43 to 54 percent more expensive than they used to be. On top of tickets, you also need to consider your accommodation, travel activities, food, insurance, and any tests required in select locations.
It’s best to expect more than you initially think, especially when planning to hop from country to country. Today, countries like Uruguay have prices that are 20 percent higher than their neighboring countries. Even on a shoestring budget, you would have to set aside around $45 a day.
Thankfully, you can find many ways to circumvent these costs if you’re smart with your finances. Many of the perks and discounts you can bank on will all boil down to your credit. Here are a few reasons good credit habits are beneficial to your travel budget.
You Can Get Better Credit Card Interest Rates
A credit card can be very helpful when you’re traveling, as this cuts out the need for carrying cash around. This can be safer and less of a hassle, as long as you keep track of the expenses you charge to your card. Using a credit card also removes the need to withdraw cash or convert to a local currency.
In order to be approved for a credit card and get lower interest rates, you’ll need to have a good credit score. Companies will perform credit checks to gauge your eligibility and the offer they will give you. Because this will be a hard credit check, your score will also lower by a few points. Make sure you maintain a score that can afford a ten-point loss (though it shouldn’t hit that high if you avoid taking on too many hard inquiries).
You can also get a soft credit check yourself while traveling to make sure that there are no fraudulent or mistaken charges on your records.
You Have a Better Chance of Getting Approved for a Travel Loan
If you’re planning to really stick to a shoestring budget but want a way to pay for your tickets and other expenses in advance, you may be considering a travel loan. This can make your preferred trip more affordable by spreading out the cost instead of requiring a huge sum all at once.
Not only will lenders perform a hard credit check but they will also base their approval on your credit standing. Although your actual score is also a major factor in the decision, lenders also want to have a look at your financial history to see your payables and habits. If you look after your credit, then the application process should be pretty smooth.
Of course, you still need to make sure that you can afford to make your loan repayments on time so that you don’t hurt your credit. Even though you can always save on certain aspects while you’re already traveling, you still have to think about recurring bills and unexpected payments. After all, around 40 percent of adults polled by LendingTree have reported being less able to afford their bills compared to just one year ago.
You Gain Access to Lower Fees, Points, and Discounts
With good credit, you’ll find more avenues for lines of credit and ways to make things cheaper. Having good credit while using a credit card will open you up to lots of perks, including flyer miles, accommodation discounts with partner brands, and lower interest rates for both loans and cards.
On top of that, you can also enjoy a lower rate in terms of certain international fees when using your credit card. If you opt for credit over cash, you also don’t need to worry about the fees that come with currency conversion. You can also use your points so that you don’t even get charged at all. Around 50 percent of Americans in 2023 are planning to use their credit card points to fund their travel expenses.
When applied to your travel plans, you can save the budget that you do have for essentials that require you to use cash. For instance, traveling on a budget to Costa Rica is possible by using their bus system and eating at Sodas. Bigger expenses like your flight tickets and accommodations can be relegated to your points and miles.
