Personal Finance

Don’t Let Your Vacation Wreck Your Credit

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Summer vacations are supposed to be care-free and enjoyable. The most perplexing challenge we want to be faced with is: “Should I wear my sandals or my flip-flops today?”

That might be the perfect summer vacation but unfortunately, some summer vacations can have long-term consequences. A little proactive planning will go a long way, and I don’t just mean that you should buy SPF 50 sunscreen instead of SPF35. I’m talking about your credit.

While on vacation, we don’t want to think about our credit. But if we ignore our credit completely, we could end up paying for it for months or even years. Here are five credit tips that you probably haven’t been thinking about as you’ve been planning your summer vacation:

1. Set a budget. Summer vacations should be fun, and it’s even OK if they’re a little extravagant. But don’t go overboard. Set a budget before you go on vacation, make sure you give yourself a little cushion just in case you find the perfect souvenir, but diligently stick to your budget.

That might seem like you’re trying to suck all the fun out of your vacation, but what you’re really doing is making sure that the happiness of your vacation doesn’t turn to months or years of regret as you pay off those bills.

2. Plan for contingencies. What would a vacation be without a mishap? Make sure that you are prepared for some of the most common contingencies you might face while traveling. If you’re renting a car, make sure you have car rental insurance. If you’re going to be somewhere for any length of time, make sure that you have some kind of health or hospitalization coverage while you’re there. These are indeed credit tips because every contingency that you prepare for helps to protect your credit from unexpected, unpayable bills.

3. Protect your credit while you’re away. When at home or work, you protect your wallet or purse diligently. But when traveling, it’s a different story. Your wallet (and all of the credit contained within) is harder to protect. It’s in a hotel room (with hotel maids might leave the door open) or tucked in your shoe while you’re swimming at the beach. Minimize the threat by keeping most of your credit cards at home and perhaps taking just one credit card and cash. If your card is lost or stolen, report it immediately to your credit card issuer.

4. Remember that your utilities didn’t go on vacation. You might be on vacation, but your utilities and other financial commitments are not. Before you go away, make sure that your bills are taken care of so that you don’t accidentally skip a payment while basking on the beach. Prepay those bills while you’re gone.

5. Check your credit when you get home. Once you’ve returned home, pull your credit reports. You can go to AnnualCreditReport.com to get your free credit report once per year from each of the three major credit reporting agencies. Check for the impact of your vacation on your credit score (especially if you exceeded your vacation budget or missed a bill payment) by pulling your free credit score once a month using Credit.com’s Credit Report Card. Taking a close look at your credit reports and credit scores can also tip you off to any identity theft issues that might arise if someone spotted your wallet near the hotel pool.

Vacations should be memorable, but they should be memorable for the right reasons. Make sure your vacation remains a happy memory by keeping these five tips in mind when planning for your next vacation.

Image: iStockphoto

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