Travel Without Credit Card Debt
A few weeks ago my twelve year old daughter, Alisa, and I embarked on an eleven day vacation which admittedly was ambitious considering that I rarely take even a full day off. This vacation carried a hidden agenda, though. One goal, in addition to having fun, was to return with no added credit card debt and with finances intact. Considering all of the money that credit card companies have reaped from consumers, it seemed a good time to test the theory that we can enjoy ourselves without adding to credit card or other debt. The idea originated with an experience of one of my clients.
he client, Mary (the names are not real), came to our office a few years ago after her elderly mother, Susan, a resident of another State, filed for bankruptcy. Not surprisingly, the bankruptcy stemmed from credit card debt. Deciding to travel after her husband’s death, Susan put the travel expense on a credit card issued by the same bank where she had an account jointly titled with her daughter. When mother filed for bankruptcy, the bank sued daughter. We
eventually established that Mary had nothing to do with her mother’s debt but it would have been so much better to have avoided the issue entirely and to save Mary and her mother the aggravation. Here are some ideas based on my experience.
Step 1. Plan. Planning a vacation may seem to be obvious but it involves so much more than just deciding where you want to go and when. When we plan a vacation I usually call my friend, Jill Cummings, at Whirlaway Travel and Cruises in West Chester and Jill has a host of questions to ask. She can tell when are the best times to travel, where to stay, how to get there, and how best to enjoy the sights. After a few appointments to get it right, the vacation that results is the one that we want. A few years ago, Jill’s advice on airline tickets alone saved us a few hundred dollars.
Step 2. Save. Some readers today might remember bank savings accounts called “Vacation Club” accounts. Interest was limited but consumers put away each week an amount they specified so that, when they finally took vacation, the funds were at hand. It is not necessary to explore the past to use this idea. One method I began with my daughter is each day to take what remains in cash at
the end of the day and save it. On weekends, we take change to the bank and convert it to dollars to add to the fund. It is surprising how fast savings can mount and, following vacation, the same procedure can be used to further encourage thrift. Older adults can try this with their grandchildren.
Step 3. Where Feasible, Use Alternatives to Credit Cards. The VISA Check Card, as just one alternative to credit can, if used properly, be a convenient and effective tool. The beauty of the card is that it is limited to the amount in the bank account. If you do not have the funds, you cannot spend. This can make a buyer think twice about making the next purchase.
Sometimes, however, credit may be needed. In some situations such as with car rentals, credit cards are required to hold the sale. If so, you often can hold the charge with the credit card but, when finalizing the bill, pay with a VISA Check Card.
Sometimes payment with a major credit card may help if the purchaser is concerned about the potential solvency of an airline or a similar purchase. Even in these cases, if credit is used to pay, the buyer may hold aside enough in
the bank to pay down the credit card immediately on return from vacation.
It may be difficult to believe but, when paying with cash, you may be required by hotel managers or others to provide identification but there are people who pay with cash.
Step 4. Prepay. If you are sure where you are going and feel comfortable with the financial standing of the vendor, you may prepay. There are risks. You could become ill or have a last minute scheduling conflict. Still, if you prepay you know that this much, at least, of your vacation is taken care of in advance.
Step 5. Budget. Figure in advance how much per day you are willing to spend and, each day while on vacation, check your remaining available cash against that figure. Adjust as needed.
With all of this in mind, remember to have a great time.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.