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8 Money-Saving Tips for Inexpensive Trips

More tips on how to use credit to your advantage without creating vacation debt.

The goal of all the tips described in the video is to minimize your vacation cost as much as possible. If you take inexpensive trips, you’re less likely to rely on high interest rate credit cards to cover the costs. That helps you avoid doubling your trip cost with interest charges.

When you’re Penny Wise you know that a vacation put on credit cards turns into debt, and it’s only going to stress you out. Use our eight money-saving tips to avoid overpaying on your next getaway.

Penny Wise vacationers know that overseas travel often means added fees. Pound Foolish doesn’t check to see what the fees are, so they end up paying up to four percent per transaction.

Meanwhile, Penny Wise checks with all of their credit card companies in advance to find the card that has the lowest international fees. And they’re wise enough to know that a one percent fee is common, but any more than that may be way too much.

Penny Wise also reviews package pricing closely to make sure it’s the best deal. Pound Foolish always makes reservations in packages because it’s easy, even if they know they won’t use everything included. And they do foolish things like not comparing the a-la-carte costs against all-inclusive packages.

But Penny Wise weighs the price of individual components against all-inclusive packages to determine the best deal. And they check this every time, for every trip since deals vary by location and the activities they want to do.

Penny Wise vacation planners also know a constant stream of “buy me” from kids can drive up the daily cost of a trip. Pound Foolish piles on added expenses by paying for every little thing their children want, from snacks to souvenirs. But Penny Wise sets a daily spending allowance for each child and lets them know they have to stick to that amount or use their own money.

Penny Wise also knows that you can save big on domestic trips with an entertainment book. Pound Foolish arrives at a domestic destination and THEN decides what to do. As a result, they end up overpaying on food and entertainment.

Penny Wise knows you can purchase entertainment coupon book for most U.S. metropolitan areas and they’re full of valuable discounts. And they also check with the concierge or flip through a local newspaper to see if there are other free events going on.

Penny wise vacationers know how to save money on food. Unlike Penny Wise, Pound Foolish shells out cash for snacks whenever the family gets hungry. So, the Pound Foolish family overpays for things like trail mix, chips, gum and soda that are more expensive in hotels and airports.

Penny Wise packs snacks to take along, so the family can munch whenever they want without spending money on pricey hotel vending machines. And for driving trips, Penny Wise packs a cooler so the family can make less stops and keep costs low.

Penny Wise also knows that gratuities can cost a lot. Pound Foolish never budgets for gratuities, so they have to pull out cash at ATM machines to tip service staff. And they overpay on cruise ships where tips can really add up, too.

Meanwhile, Penny Wise budgets ahead for gratuities for everyone from bellhops to taxi drivers and pulls out cash in advance to cover them all. And Penny Wise even takes the extra step of checking tipping.org to see how much they need to tip each person.

Penny Wise vacationers keep in mind that phone calls on vacations can be expensive. When you’re Pound Foolish, you overpay anytime you call home. You use the hotel long-distance service at ridiculous rates or stay on your smartphone even when you’re roaming.

Penny Wise reviews mobile plans in-advance to check roaming charges. And when they use a landline, they buy a phone card before they depart so they can make the least expensive calls possible.

Finally, Penny Wise knows internet access can pile on added costs. So, they check ahead with the hotel to see if they have free wi-fi or if charges will apply. Pound Foolish doesn’t bother thinking about this, so they pay high rates at hotels… and even more on cruise ships

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Still, just because you don’t have to rely on credit, it doesn’t mean that you won’t use your credit cards. Booking flights, making hotel reservations, getting a rental car – they’re all more convenient with a credit card. In fact, if you don’t have a credit account when you rent a car, they run a credit check on you.

So, in many cases you need credit to make your trip happen. What’s more, you can earn some valuable rewards if you use certain credit cards to plan your trip. As long as you have a good debt management strategy in place, you can charge what you need without incurring a lot of extra charges.

Step 1: If you want to maximize any rewards, start with zero balance

Credit card rewards can be valuable, but they’re quickly offset by interest charges. In most cases, the value of rewards earned is offset within two billing cycles once you apply interest charges. So, you have to be smart about how you use any travel rewards cards.

This is how you avoid interest charges entirely when you charge something for your trip:

  1. If you start and end a billing cycle with a zero balance, no interest charges apply.
  2. Make sure the travel rewards credit card you use to make reservations has a zero-balance starting that billing cycle.
  3. Once you make your reservations, pay off the full balance within that first billing cycle.

If you follow those three steps, no interest charges apply to your purchases. Thus, you earn the full value of your rewards.

Step 2: Low APR is better for anything you can’t pay off fast

If you make charges that you can’t pay off within one billing cycle, think carefully about which card you use. For charges that will take a few billing cycles to repay, rewards don’t matter. Again, if you earn rewards valued X dollars and interest charges cost double that value, you didn’t actually earn anything.

In this case, you should choose your credit card with lowest APR to make these charges. Lower APR means less interest charges with each billing cycle that passes. You minimize the cost by choosing a different card than your travel rewards credit card. Rewards almost always mean higher APR, which leads to higher costs.

Step 3: Consider prepaid credit for your trip

If you don’t want to mess with cash or currency exchanges when you travel internationally, consider using prepaid credit. A prepaid credit card functions much like a regular credit card. You swipe the card just the same. In fact, you can even find prepaid card with EMV chip technology so you can use them overseas.

The only difference is that you load the card with funds ahead of time and money gets deducted as you make transactions.  This also helps you avoid interest charges entirely to help keep inexpensive trips inexpensive. In addition, it gives you a little protection against identity theft. If the card gets stolen, thieves only have access to the money loaded. And federal law now says these cards have the same limited ID theft liability as regular credit cards.

So, get a prepaid credit card for your trip. Load it with the money you have saved up for your vacation. Then only make purchases with this card. When funds get low, it’s time to spend the day relaxing or find some fun, free activities.