There are so many different ways to save money for travel, and I’ve tried so many. From changing my eating habits, moving homes to save on rent, and practicing frugal travel, each decision made enabled me to move a step closer to travelling the world.
I also found that being more careful with my debit and credit usage really helped me get a better grasp of my spending habits. In fact, your credit score can be a powerful tool that can actually help you get the most out of travelling – here’s how.
Travel loans have lower interest rates
After the COVID-19 travel restrictions ceased, financial institutions provided more opportunities to ‘travel now, pay later’. Loans for travel and education showed an annual increase of 36%. If you have a great credit score, you could access a lower APR, which accounts for the interest rate and loan fees implemented by lenders. While travel loans might seem like an impulsive decision to some, it’s a great option for those who are confident they can service repayments.
Get free miles by spending on a credit card
Frequent fliers might be missing out on a lot if they aren’t with a credit card company that offers a miles reward program. Miles are earned every time you spend on your credit card. The number of miles needed to book a flight varies depending on the airline the card is affiliated with, but 12,000 to 40,000 miles will usually get you a short haul round trip. Of course, it’s a good idea to pick a cheap flight route and avoid booking at peak travel times.
Access travel perks
When comparing hard versus soft credit checks, it’s clear that credit card companies will run the latter type of credit check on you every now and again. In fact, they are some of the biggest users of soft inquiries as they use your score as a basis to check whether you’re prequalified for credit card offers or insurance quotes. You can also score coupons, free hotel nights, and other perks if your company is working alongside a travel company. And unlike hard checks, soft checks do not affect your credit score in any way.
Reduce your fees for foreign transactions
Simply explained, a foreign transaction fee is added to credit card transactions when you use your card to purchase products or services in a foreign currency. But there are some credit cards that don’t implement transaction fees as part of their benefits. Of course, these kinds of travel-friendly cards often good require a good credit score for approval, so we recommend performing a soft check on yourself to see if you’re going to qualify.
Make use of sign-up bonuses
Lastly, keep your eyes peeled for sign-up bonuses if you’re planning on signing up for anything like a travel, hotel, or flight credit card. Early bird or advance holiday promotions, for instance, can help you save some cash and use it for other purposes. Also try to make use of registration or referral bonuses for services like Airbnb, Booking.com, Uber, or Lyft. If they’re connected to some credit card companies, they might even offer some sort of cashback.
Maintaining a good credit score way will help you book your flights and accommodations without a hitch. During your trip, use credit cards wisely and always set an affordable limit on spending. To help keep your credit score healthy even if you’re travelling for an extended period, inform your credit card company of your trip so that they don’t end up freezing your card, and be sure to pay off your balance every month.
For more travel tips, check out these helpful travel guides: