A vacation to Disney World for a family of four, minus transportation costs and
souvenirs, will put you back more than $2,300, according to some online calculations. If you planned ahead and saved for the trip, congratulations are in order for being so fiscally responsible. Your memories will be free from the worry of debt. But for those who paid with plastic with good intentions to pay it off in a reasonable amount of time, the holiday shopping season is creeping up fast, and so is the possibility of creating more debt. The only way to be debt free before the Holiday’s is to start paying off your vacation debt now.
The most effective way to pay off vacation debt is to put the credit cards aside. Stash them away in a safe place and commit to buying with cash or debit until the balances are paid in full. This may require changes in daily routines, such as the drive-through morning coffee, but brewing it at home will add up to an estimated $40-$50 monthly savings that can be used to lower your credit card debt.
Which Card to Pay First
For consumers who used multiple credit cards on vacation, financial experts advise focusing on the biggest balance first because of compounding interest. If, however, your biggest balance is currently at 0% interest (or is more than 5% lower than your other cards), eliminating small balances on other accounts may be the wiser move. Another advantage to paying off lower balances is that once you’ve accomplished that goal, you’ll be able to put all of your efforts into paying off one card, rather than worrying about multiple payments.
Double Check Statements
The excitement and hectic nature of vacation and the vast number of purchases made with your credit card when you’re away from home are important reasons to be vigilant in reviewing the charges on your monthly statement. Thieves are particularly attracted to tourists, so it’s important to check for fraudulent charges. Beware of double dipping charges that may have been accidental or intentional. Contact your credit card company immediately to dispute the errors and follow up in a few weeks to find out the status of the investigation.
If you find that you’re still working on paying off your vacation debt when the holiday season comes around, it’s time to rethink your strategy for next year. The danger of continuing to rack up debt into the Holidays is too serious of a mistake to repeat. Every penny that you don’t spend unnecessarily next year can be added to the kitty for next year’s vacation. Starting to save early will help to eliminate the risk of overwhelming debt, give you a sense of accomplishment and your time away will be less stressful.
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