Do you save first, then travel, or travel and go into debt?

Tansy
We put most everything on our card for the FF miles but then pay the card from our savings when we receive the bill. I hate paying interest and I hate having debt.

I have to respond as this touches a nerve. The bottom line for me is that having debt is dumb. "The borrower is slave to the lender." How robust do you think our economy would be if people weren't strapped to their CC debt of $9500 on average?

Needless to say, we save the money and pay cash. My wife and I don't have and don't use a credit card. We're a few thousand short of what we need to buy our next vehicle, which will be 2-3 yrs. old (I'll let somebody else pay the depreciation).

I used to do the FF credit card thing (I was a Delta Skymiles Platinum AMEX holder and proud of it), but once I began tracking my spending, my personal experience matched up with studies I've seen that say people using credit cards spend anywhere from 10% to 20% more, even if they intend to pay it off at the end of the month. So, out came the scissors. Call it a plastectomy, if you will. That's my $0.02, and I'll pay it in cash, thank you very much.

For some good info and ideas (also known as common sense approaches to finances and investing), check into Dave Ramsey.

Like cd, put it all on the AMEX for the FF miles and then always pay it off as soon as we get back.

I agree about not having debts but there are advantages to having a credit card when traveling as have been noted many times on this board. As long as you pay it off all at once I think it's the safest and most prudent way to go.

I agree that having a CC is a safety precaution if nothing else, especially while traveling. I've been in several situations where my credit card helped me out of a very difficult (or scary) situation (e.g. my car broke down while on a road trip, long story but my CC really saved me, my car, possibly my 'womanhood' if you get my drift).

We have a strict rule when it comes to vacations -- no credit cards except in an emergency or when they're absolutely required (e.g. for hotel/condo/car/etc security deposits).

Going into debt for anything other than a mortgage on a house (and maybe a good car) is asking for trouble. I learned long ago that carrying debt for intangible items like a vacation or consumables like food is foolish. Funny how some people will go to great lengths seeking out the lowest air fares and best prices on hotels only to pay upwards of 18% interest to the credit card company for the next several years without giving it another thought.

I have one credit card that gives me FF mileage. I charge only what I can afford to pay in full every month and never ever carry a balance. I rack up the miles, don't need to carry much cash and I sleep like a baby at night.

We set aside travel money every month, charge all travel related expenses to get membership reward points, then pay it all off when the cc statement arrives. I agree it's helpful having a card when traveling, especially when it comes to car rental and hotel reservations.

EVERYTHING goes on our FF credit card and EVERYTHING gets paid off each month. It's a great way to keep track of our spending and builds free flights at the same time. We do put "extra" money back for vacations (rebates, money from doing surveys on the net, etc.) and just use it when the bills are due.

I don't buy the "I need a credit card" theory. I have a Visa Check Card, comes straight out of the bank account and is accepted wherever Visa is welcome (boy, does that sound like a commercial).

I agree with Sunnyboy for the most part, but I still contend most people spend more than they intend even if they pay it off every month. There is truly a more emotional response when you're handing over Uncle Ben vs. a piece of plastic. I sometimes think I'm missing out on FF miles by not using such a card, but I'd rather not have to worry about the temptation than collecting the miles. Talk about sleeping good at night...

It's also nice not to bring anything home from vacation other than memories and purchases (made with cash, of course). Those bills won't be following me.

Tansy, you must be working for some survey company! Did the "don't call" list hit you hard and you've switched to the Internet?

FainaAgain, what the hell??? I'm just in a "pondering" kind of mood -- and if you read one of my other postings you'd know I'm in software development.

First, I was surprised to read that so many people are so "good" about their credit card debt . . . then I realized that people who AREN'T good about it are probably steering clear of this post!

Tansy:

Love Ya!

Ok, it is T-A-X time at my house so I'll whisper...

I do "save"...naw, let me stop lying!

LOL!!!!!!

I proudly have money in the bank, several accounts, cash to grab in my house and my wallet is stuffed most of the time... BUT, for vacations I put it on one of the many credit cards.

If something goes wrong VISA's got your back!

We travel lots and have never used FF or the cards that go with them...encourages debt says my hubby.

"We"...ok, he-hubby, immediately pays off all said credit expenses from vacations before one suitcase is un-packed!

My "secret" credit cards that I use when he says "no" while we travel have stuff on it as old as the Y2K scare!!!!

In California he-hubby is debt free but, me-wifey...sho ain't! So, if it all comes crashing down "we" owe...

No, he does not know nor does he care...right...

Again, it's T-A-X time so I am staying off his radar...giggle.

For some good laughs, go to the Europe thread and read the thread on Travel/splurge...click my name to get it.

Oaktown Traveler

Tansy-you are right the people who carry the debt are probably sick to their stomach's about having debt and don't want to write about it on this board.

Well, I put everything on the CC pre-vacation (air, hotel, car) and pay that before I go. And then pay with cash or a CC while on the vacation.

Everyone is different. I love my FF credit card, use it responsibly and pay it off each month. You know, spending cash only doesn't make you a saint -- along with low/no debt, you've gotta be SAVING.

I put 15% of my gross income into my 401k, 10% into my short-term investment account, and I also have an emergency fund stocked with 4 months' worth of all household expenses. And yes, I have a mortgage and a car payment, and I travel. I pay myself FIRST every month, then I pay all bills, expenses, etc. Then I sock a little "mad money" away into my travel account. Then, with what's left, I know what I can spend on dinners out, haircuts, clothing, and so on. Some months things feel tight. But watching those accounts grow makes it all worth it.

I guess I should add that I put all travel expenses on my credit card, then pay it off. But my travel account gets emptied before the trip and all $$$$ sent to the credit card or carried with me in traveler's checks if I need them for anything.

Tansy...ooooo, you can't cuss on Fodors'.

Apologize to Faina...she is really nice...ok?

You don't want to get this thread pulled!

Someone is going to tell on you. Not me.

Hurry, apologize and really mean it.

Oaktown Traveler

I agree with Debbie Allen, you HAVE to pay yourself first. Even in my early 20's, I put 15% into 401k, $200/month into stocks, and $2,000 into my Roth. I also bought a new/used car instead of buying that nice Saab that was oh so tempting!! I then I save $ for travel, my fave thing in the world!!!

"The Millionaire Next Door" is our Bible!
I've also found routes that are all downhill so I can save on gas.

Sounds like a lot of you "young'uns" got a lot more on the ball than us old timers give ya credit!

We still do both styles of vacations...we try and take a long weekend vacation each month and maybe 2-3 "bigun's" a year.

As long as the CCs are all at a $0 balance within 30-45 days we can live with it.
Mrs Kal has to have a cocktail when she hears horror stories of CC balances of $10,000+. God Bless that woman!!!

It just never occured to me to go into debt just to go on vacation.

If I don't have the money, I don't go.

My big trips are paid for by the time we leave as well as all the spending money.

I don't save a set amount each month for travel. To me, it is like a bill.

While we have a great respect for credit and have never been in debt over our heads, we will most definitely use SOME credit to facilitate a trip!

If all other systems are a go, meaning the time and opportunity are available, we go. We have reserves to draw upon if necessary but prefer getting FF points and paying off the balance within 1-2 months.

IMO, its more than worth it. We can't afford NOT to travel - children grow up, time passes quickly and life is short!

I'm with you, Ellen. My parents scrimped and saved all their lives, went hardly anywhere, and when they got ill, all their money, savings and house proceeds went toward the nursing home. When our boys were college age, we borrowed $10,000 against our IRA's and took them on a six week tour of Europe. (It's paid back now of course.) Foolish? Perhaps. But I wouldn't trade that time and those memories for anything.

Kal,

I also loved "The Millionaire Next Door!" That should be required high school reading!

I didn't think I gave the impression that I wasn't saving. We each (DW and I) pay ourselves first - fully funding Roth IRAs, then the 401(k), and have a money market account with checkwriting for the emergency fund. We budget each month. Church gets their share first, then the ONE ugly debt (mortgage), and everything else gets its own envelope. For example, say we budgeted $250 this month for restaurants/eating out. Once that money is gone, we don't eat out any more. It's a beautiful system, and works great for us. Right now, we're packing away for my truck - should only be a couple of months away from being a fully funded truck fund.

Anyway, off the soapbox. Speaking of travel that's paid for, our next trip is already paid! We're taking a hiking trip to the LeConte Lodge (Smoky Mountains) in late May...we can't wait to go, although the DW will be about 7 months pregnant by then. We might have to cancel, but so far, her doctor says we can go (we're pretty active and she's in good shape). If not this year, junior will just have to backpack it up there with us next year!

Gosh Tansy, I sure fantasize about
"yeah, let's just do it and CC it"
It's so fun to get more and more
specific on that Cook Island tour-and then.....
the TV gives up life,
we have a zillion dollar leak (and
drywall and paint ),
the frig is sounding better/worse/better/worse,
a cat needs an ultrasound,
a shopping cart screams downhill into
a car,
I dislike debt so....some of daily life
comes out of the vacation fund when daily life scrunches itself into
3 years worth.
Short story-cash or pass.
R5

I guess you could say a little of both. I always organize my tax deductions so I get a reasonable refund on my federal income taxes - $3,000/$4,000 or so that I use as a base for a major vacation (forced savings). The rest of the cost comes from current income - although I frequently spread payment of credit card bill over 2 months (I guess this counts as debt) rather than paying in one. Dining and daily expenses for the trip I don;t really count - after all if you're at home you have to eat anyway (we almost always eat out or order in) - and I'd rather spend walking around money on museums etc than on bridge tolls and dry cleaning for work. Funds for smaller trips just take come out of current income (walking around money one month and credit card payments the next).

The original poster's info on an average of $10,000 in debt is really interesting considering interest rates. (And I think a lot of these people are buying stuff they really need - the number of people I see using a credit card vs a debit card to pay for groceries is really alarming.) But what I find much more shocking is info that the average 50 year old only has about $40,000 saved towards retirement - whatever will these people live on?

I'm just so thankful that credit card companies hadn't started aggressively targeting college students when I was in school -- you can do SO much damage to your credit in a short amount of time! I hear about 20-somethings declaring bankruptcy and I need a cocktail like Mrs. Kal!

nytraveler,
I use my credit card for grocery purchases. There's nothing alarming about it. I get double FF miles for it so why use cash/debit card?

Tansy,
My mortgage is the only debt I carry. I don't even like the idea of paying interest on a car and definitely not on travel. I do however put everything I can on credit/charge cards (even everyday expenses) so that I can earn miles for it, then pay it in full when I receive the statement. I don't charge anything that I don't have the cash to pay for. To me it's just more advantageous to use cc's. Aside from the convenience and mileage earning opportunities, you get some consumer protection that's not available with cash or debit cards.

I question the intelligence of anyone who travels themselves into debt. Not a good idea. So yes,I pay cash for travel. I think the only rerason I have a CC is that it seems you cant do much without one as far as renting a car,airline tickets online,etc.

Cash is king and debt is financial murder as far as I"m concerned. The only time I will borrow money or go into debt is if it is tax deductable.

Patty, that's a good point about the protection you get from a CC as opposed to a debit card. A co-worker learned the hard way when unauthorized charges were made with his debit card number -- the bank does not cover those charges, he was liable. I checked my own debit card afterwards and found out that I had minimal protection on my debit card in case of fraud. Carrying CCs when I travel makes me feel more secure since that is a common time to have your # stolen. Always keep your receipts, don't throw them away when traveling!

DebbieAllen,
That's the reason I don't carry a debit card anymore and opted for an ATM only card instead. I never used the Visa/Mastercard feature and it just seemed like an unnecessary risk since the funds come directly out of your bank account.

I know there has to be people on this forum who use the credit cards for trips. I know the temptation myself. I like using one of mine for the ff miles. Sometimes people look at the card as free money which it's not. I know some people who whip out the credit card in a minute for a vacation and say you only live once. Who knows what tomorrow may hold.

Janny: One thing we *know* tomorrow will hold is a credit card statement showing up in our mailbox. I don't know how anyone could enjoy a vacation knowing they'll be paying interest on every dollar spent on it.

Like others, I use my credit card for almost everything. I get the ff miles and pay it off monthly. We no longer have a mortgage - here in Canada, you can't claim the interest on your income tax (which I think you can in the US), so for us a major goal was to pay off the mortgage. It took us just over 11 years and I was thrilled when it was over! Our car is paid for. We do have a small amount owing on our line of credit and it really bothers me. We do have a big trip planned - we're going to Australia to visit my mother-in-law, and it's lot more than our usual trips. I carefully figured out what we'd need and made sure that we'd have the money in the bank. However, just after we finalized those trip plans, we had a few problems in the house - several of our appliances all died at once. So much for the budget!

However, we can't do a lot about the trip- my mother-in-law is quite old now and we feel it's time to visit. I also remember what my father said - he and my mother worked and saved all their lives with the hope that they could enjoy their old age. My mother died 6 months ago - she had been ill for years and spend the last 8 years of her life in a nursing home. They both regretted that they weren't able to have the life they had always thought they'd have. I am very careful with my money, but I also don't want to have regrets.

SusaninToronto, I like your last sentence! We are also very careful with our money but want NO regrets! Money is NOT our first priority!

Thankfully, we have very little debt. However we've used credit for *necessities* and will continue. Vacationing with our family is a necessity.

*** Ask yourself this: What price do YOU put on vacations with your family? The cost of living means we're constantly paying lots of people, businesses and organizations for lots of things less important than traveling. Paying the Bank to use a LITTLE of their money is a SMALL price to pay for vacation memories and closeness, especially when its payed back right away! ***

As another poster said, time waits for no man. I'll likely die with more memories than money but absoltely NO regrets!

Sounds like some of you think credit card use and responsible spending are mutually exclusive...

I use my two credit cards because I get CASH back (based on annual usage), it is safer than carrying wads of class, you have merchant protections, I get a record of purchases, rental cars and reservations are difficult without CCs, and I find I don't waste money on small impulse purchases when I use a CC. I have an ATM card for times when I need some cash, but would hate to get on a trip and run out of money due to computer problems or a lost card.

The thing is, I'm not going "into debt" with my CC as I have the money in the bank to pay off the bill each month.

In 25+ years, I've never paid a finance charge, late fee or annual fee on a credit card. To me that would be stupid.

It's quite silly to go into debt to travel, unless there is a compelling life reason (such as you want to take a last trip with a terminally ill family member).

If you just save for a little bit longer, you will avoid the huge interest charges that would otherwise arise, and you will be able to afford more and better trips than you would if you put them on credit.

Using a credit card and paying it off monthly is an easy and sensible way to manage and organize finances, in my opinion.

Patty -

Becasue the vast majority of people do not pay their entire CC bills each month - and therefore pay interest on every purchase from the day they make it. I'm sure most people paying with a CC in the supermarket (as everywhere else) are in this group - so they're paying 12 or 15 or up to 21% interest on their groceries - imagine the cost of that over a year!

I think it is a personal preference...I hate the idea of debt and with a house and cars...etc. it is enough for me..I don't let myself go into credit card dept...however, if it is something that works for you..go for it.

I am like DebbieAllen and some of the others - I use my credit cards to pay for things, but I always pay them off when they are due - whether it be travel expenses or other. So I guess that means I save up first.

Travel is the big "extra" I spend my money on. I "pay" myself first: I save the max allowed into my 401K, I have money sent directly to my brokerage account that is used for investing and from which I have never withdrawn money. Then I put extra money into my savings account each pay period. I have off-limits money in there - but any money above that $ amount is what I consider to be my "extra" money - for travel or other big purchases.

My parents are very debt-averse, and I learned from them. I have a mortgage that I pay by myself, and a car payment, but that's it.

Karen

We put money into a vacation account every month. We also put any "extra" money into it - bonus, tax refund, unexpected freelance work. I don't think I would enjoy myself as much on vacation if I thought I would spend months paying it off.

I also wanted to second Patty's warning. I always use a credit card, not debit, for hotels and airlines (and to order anything off the internet or catalogs). My debit card does not offer any way to dispute a charge if I have a problem.

One other comment about debit cards. If I use my card as a credit card (sign the slip instead of entering a pin number), I get a cash back bonus. If I use it as a debit, I do not. I would never have known this if I didn't have a friend who works as my bank. That's why I look like I'm charging groceries.

I can't understand going into debt for travel. Travel is a non-essential expense in my view. If you can't afford to pay it off now, you shouldn't be traveling. When I was younger and with much less money, vacation was a long weekend somewhere I could drive to.

As for credit cards, we use them every chance we can...travel, gasoline, groceries, dinners out, etc. I recently went so far as to change dry cleaners because the one I was using always had a broken credit card reader. If I could pay my rent (soon to be mortgage) with a credit card, I would. They are paid off in full each month because most everything we put on them, including the dry cleaning, is part of our budget. We carry only cards that award frequent flyer miles or hotel points with the exception of our AAA VISA card which is used exclusively for gas purchases yielding 5% back on every purchase.

This is a honest reply from someone who is in extreme debt and planning to file bankruptcy. I am 27 years old and my credit rating is horrible. Now to answer the OP's question, I have in the past gone into further debt using credit cards. I started college when I was 17 and by the time I was 18, I had 14 credit cards and 4 gas cards. I took several road trips with friends and paid for everything with my credit cards.

By the time I was 23, my credit was so bad that I have not bothered to apply for any type of credit for the past 4 years. I was currently advised that I should file bankruptcy. I want to make everyone aware that these credit cards give huge limits to kids. When I was 18, I had a Citibank with a $7000 limit.

So my answer to your question is I think a lot of young people with credit, use credit cards to fund spring breaks and summer vacations.

Mercedes,

I would strongly recommend you seek further counsel before filing for bankruptcy. It will ride your credit report for seven years. I don't know your situation, but you probably could work it out on your own without having to file.

I agree with MileKing on one aspect...travel is certainly not a necessity for living (I know most of us would like to think it is, though), when compared to the REAL necessities of food, clothing, and shelter.

Mercedes,

I forgot to mention. Go to www.daveramsey.com for some solid financial advice. Call him this afternoon on his show - 888-825-5225 from 2-5 p.m. EST. He can help you work through this!

Hi Tansy! I pretty much do what you do. Save some, charge some, pay off some before, pay some when I get home. I don't have any strict rules for myself. I'm on a mission (and between car payments and orthodontic payments!)to show my 12 year-old son as much of this world as I humanly possibly can. We both LOVE to travel, so it's a high priority for us! I spend a lot of time researching for possible trips, reading, surfing the web, you name it. While I'm researching, I get as financially poised as possible to buy airline tickets, and by that I mean jamming $$ onto the CC, so when I see a great deal I can jump on it. Then I do the lodging etc., also on a CC and pay it off usually before we go. Put a chunk of cash on the CC for spending,
and we're off! I don't let my debt get out of hand and I don't let owing some money get in my way of a potentially great experience. Just my MO

If I'm sure of our plans, booking airfare and hotels rooms (on the prepaid sites such as Priceline) is fine with me. As we're both over 50, I generally buy trip insurance (Travelguard for the airline tickets, through Priceline while booking for the hotel room), though so far, thankfully, we've never needed it. Even so, it's cheap for the benefits.

Then, I pay both of those off as quickly as possible, usually before the departure date.

While traveling, the dining and shopping goes on the debit/credit cards. No way I want to pay interest on meals consumed previously, so I pay those charges immediately upon receiving the bill when we've returned home.

As for saving, I have my paycheck on direct deposit with 10% going to my savings account. Those funds get transferred, now and again, to the checking account to pay the credit card charges.

I always "clear up" one trip before the next.

And, I always consider what I can do without in favor of another trip, such as a new couch or new refrigerator.

The "once in a lifetime" trips, we do with either our income tax return or our annual bonuses from work. Or, pay it off as quickly as possible, before planning another endeavor.

The interest rates on credit card balance are ridiculous. If I had any substantial balances (which I don't), I'd go for a home equity line of credit/loan with a significantly more favorable rate that the credit cards.

There's really no point in taking a HUGE trip then "worry about it when we get home". You know, once you go, then you've been. And, if paying for it afterward significantly puts your finances out of balance, well, why would you want to do that?

There is another way. Travel and not go into debt.

I agree with Morgansmom. We have retirement savings and most of our kids through college and a manageable mortgage. We pay some of our travel through savings and some with CCs. Sometimes we pay them off every month and sometimes we don't. This country's economy would come to a screeching halt without debt. Companies could not start up, consumer spending would drop, etc. Some people are more comfortable than others with debt. To each his own. My father always says "I might get hit by a bus tomorrow". I would not want to miss a single second of my life to save for some possible future catastrophe.

We do

This is a very touchy subject because it is based not so much on money, but how you see life...

My parents raised my brother and I with the best they could afford. They worked hard and they enjoyed life as well. My father retired early due to an injury and my mother continued to work. While they took some vacations, they were looking forward to my mother retiring at 65 and they were going to go "everywhere". My dad passed away 3 years ago at 64. All his bills were paid, owned his home, had a ton of money in the bank waiting for retirement. My mother still works because she cannot think of what would have been. My fathers medical bills were over 1 million dollars (health insurance). A bed at sloan kettering costs more than a suite at the Four Seasons per night. Enjoy your life, be a good person, take in the beauty around you - you only live once.

I am not saying spend foolishly, but if you have it - enjoy it.

What we do is we have a travel account, which I add to weekly. I put everything on our Amex Plat card (points, baby!) and pay it off with travel account $$. We also carry a visa debit card, which comes right out of the checking account, not every place takes Amex either. I also pay off as much before hand as I can. Sometimes we carry lots of cash, sometimes not..depending on the destination. I guess we are lucky..we don't have any children (which saves a lot of $$) and our only debt is our car leases. We own our home, and have no CC debt.

Never ever charge anything on your credit card which you don't already have money in your bank account to pay for. This is what we're teaching our kids. This is how we live.

Think of your credit card as a check-book, and don't bounce any checks!

There's nothing wrong with having a credit card. But it IS a mistake to ever buy anything which you can't afford.

If you're buying things with your credit card which you couldn't otherwise afford, and you have kids, they will pick up this habit as well. My parents didn't have much money, but they always paid off their credit card as soon as the bill came, 100 percent. The same for my husband's parents. We do the same, and are teaching our kids the same good habits.

Also, it is a good idea to have 2 credit cards...NOT 12 credit cards. 12 credit card bills are too hard to keep track of. 2 is plenty.

I have to confess that I am in debt because of travel. I am ashamed. I never used to be like this. But for whatever reason (depression, stress, avoidance) I have used vacations as panaceas for deeper issues. I am now carrying about $15,000 in debt -- all because of trips. And it's because I had to stay top of the line. So many people on these boards try to outdo each other.
Credit is too easy sometimes. But I have to take responsibility.

Please, don't go into debt.

I confess. Yes I've charged vacation before. We needed a quick fix. It's sooo easy. I'm sure 90% of the people on this board carry credit card debt due to vacations. I'm even including those 5 star restaurants, tours, shows, souvenirs, car rental, you name it. America isn't in debt for nothing. When I'm on vacation I constantly see people whipping out the charge card. At least I do earn frequent flyer miles on mine.

If you go into debt for vacations, ultimately you cannot take as many, because each vacation will end up costing a lot more than if it had been paid for at the time. Credit card usage is fine, but I avoid carrying a balance!

People whipping credit cards out on vacation means nothing. None of us are with others when they pay their bills. For a lot of people, the minute the credit card statement comes in the mail, the bill is paid. For others, a balance is carried. Only the individual doing the charging knows which is true for them.

My entire approach to spending money on anything is to first block out the Voices of Other People from your head. It's amazing to me the things other people insist at times you "must" do. I have this happen to me every year around vacation time. There's always someone telling me how I "must" add on an additional expense to my vacation. I've learned to block out these voices because they're not paying the bills (nor have they offered me cash up front to undertake these "must" dos). Alas, for some, these voices have them spending money they don't have.

#1.

Interesting thread.
Inspiring thread.
Especially maggi's.
We have done a little of both depending on the time, opportunity and how quickly we can pay it back.
I agree with many others here.
Bottom line, I've learned that time is more valuable than money and no one knows about elusive tomorrow, which may never come.
So if we can go, we usually do.
Happy travels all.

Whether you use a credit card or not, you realize that you're PAYING as though you are using a credit card. Credit card issuers charge a merchant between 1.5% and 3% of the sales total everytime someone uses their card. So, when a retailer is determining their product prices - one of the costs that gets factored in is the fee to credit card issuers on that product.

I rarely use cash. If I'm paying the cost of using a credit card, even when I'm not, I'm going to use my credit card and at least get something back from a rewards program.

The other benefit of using a card is that you continue to accrue the interest benefits from keeping your cash in YOUR money market fund, rather than the retailers account. Honestly, with the ease of moving money from interest bearing accounts at a brokerage firm or a bank to a regular checking account, paying my AMEX once a month is far easier, and more profitable, than hitting the ATM frequently.

What if everything we bought had to be paid in cash at the time of purchase? I think that would actually bring down the price of things, because credit causes prices to rise. On the practical side, I use credit cards so I don't have to carry cash. But really, how much would a house cost if there weren't 30 year loans?
---------------------------------------
www.ihatecreditcards.com

I'm surprised this old thread came up again, but since we're on the subject and since I wrote last I have something else to add. By using my frequent flyer credit card and charging everything I could, instead of using cash, we have flown free to Hawaii twice (once was even first class) and to St. John once. I estimate we have spent at least $11,500 if we would have purchased these tickets.

FWIW, inspite of most of the postings talking of 10,000 "average" debts and the plight of individuals in over their heads to the point of bankruptcy, www.msn.com has a financial area on which there are pages discussing the way Americans use CCs. The specific page is http://moneycentral.msn.com/content/Banking/creditcardsmarts/P74808.asp According to that, a large segment that have CCs don't have a balance, the ones that do have it at a minimal level. The percentage of people with high debt loads is very small, in the 4% range. Only 1% have truly frightening debt loads. So, you can believe that. It's on the Internet, it's got to be true!

All in all, I would reiterate that it's probably best to shop like the dickens for airfares and hotel accomodations, and pay off those before your departure date, so as not to be paying interest charges on same. Then, clear up shopping and dining charges as soon as possible after returning home...so as you can be planning your next trip, without wallowing in debt for your excursions...

"Carrying Debt" is expensive, and reduces your future possibilities...

Interesting thread that I have never seen before. I pay my CC balances in full every month. I have never paid intrest to a CC CO. Also I have 4 CC cards and I do not pay an annual fee. I refuse to.

The CC I use all the time gives me FF miles.

I have always paid cash for any auto I have purchased. The only interest that I have ever paid is mortgage interest.

I agree that seeing someone use their CC does not mean they are in debt. I use my FF CC for everything including utility bills. I get the FF miles and it cost me nothing.

The only way to be relaxed and to feel "free" is to not have debts. Just MHO.

A previous poster mentioned Dave Ramsey. Listening to him set my family debt-free! As a result: no mortgage or monthly payments of ANYTHING except utilities.
So...cash is in the bank for my trips. I will be leaving July 1st for 3 major trips: New York City, Vegas, 2-week road trip in Arizona/New Mexico and then a 2-week cross country motorcycle trip.
All of this paid for with cash because of listening & following Dave Ramsey's advice. This is not bragging, it's rejoicing. If my family can do it, anybody can do it.

Yes, I know this thread is two years old.
I stumbled upon it while researching an upcoming trip and think its still interesting.
Wondered if its somehow different for anyone now in 2007?

We typically pay for things like hotel and airfare using an American Express that is paid in full at the end of the month. For trips that are more expensive like when we visited Europe 2 years ago. I try to space out what I use the CC for- one month hotel, another month airfare, etc. We do try to save money though so we can pay as much in cash as possible . In the end, there may be a few things on credit card such as any shopping that we do.

I do a little of both.

First, to clarify an earlier comment about liability with ATM cards with Visa or MC logos, check this: http://tinyurl.com/2pd6xk

Basically, if you report the card missing BEFORE any unauthorized charges have been made, you are not liable for anything.

If you report it missing within 2 days of a fraudulent transaction, you are only liable for up to $50 (same as a regular credit card).

Anything after 2 days, you're pretty much screwed.

As for funding my travels, I save first. I find that it's easier for me to plan my trip knowing how much I can spend, than the other way around. Some years, I have to use the money on something else and skip going on a trip that year.

Before the trip, I use my ATM card to reserve hotel rooms and to buy my airline tickets. I normally don't do "non-refundable" hotel stays - for me, I'd rather stay in a 3* hotel that I can cancel, then a 5* hotel that I can't (i.e., via priceline).

During the trip, I withdraw cash with my ATM at regular intervals and supplement it with using the ATM to purchase things. For the rental car, I reserve with my credit card, and if able to, pay with my ATM card at the end. If not, then as soon as I get home (whether it's due or not), I pay for the rental car with my leftover funds from the trip.

I don't have a lot of money, so I really have to keep to a budget when I travel. I've found that it's just easier to see my balance using the ATM card than it is using the credit card. I also know if I've "beaten" my budget and have a little extra to splurge with.

Travel is a huge priority for my family and we consider it a basic expense. Thus, we economize everywhere we can in order to afford travel. This meant a smaller house, used cars and used furniture. By doing this we easily have enough left over to pay for several vacations a year.
Also, we use credit cards for frequent flyer miles and always pay the balance in full each month. Frequent flyer miles are a godsend for us and have provided us with free tickets to Europe, Borneo, and South America.
Thus if travel is a priority to you, then treat it like a normal expense. By buying a house thats 50K cheaper than you would've you can free up 300-400 per month for travel!

I save, then travel, come back - BUM! I'm in debt

Save first, then pay off the cc bill as soon as it comes in. With the interest you waste carrying debt, you could go on another mini-vacation!

Wow..a trip down memory lane with all the users who posted! I remember this thread when it started so I'm surprised I never posted.

We have always saved up for the vacation before we took it.

Utahtea

Topping this because I find it interesting to see when it started -- almost 5 years ago! -- and read all the responses...I wonder if people have changed their views on credit card debt?

As I was reading this I, like Debbie Allen, was wondering if people had changed their views.

We always charge on a credit card but know that we have the money to pay the bill when it comes. We use a card that gives you rewards or points that way we get free hotels, airfare, cruises, etc.

Same and our house payment should be bye bye next month while we are planning probably two biggies if we can find the time.

Unfortunately, I still do the same. That means no trip this year and possibly next year...

No money no trip for us. We do put everything on our credit card but we know we can pay the bill in full the day it arrives.

Congrats on paying off your house Kal.
I save first for travel but then I save first for every big purchase. It gives me time to think about it, really know if I want it, will I use it and most important when the price will drop.

Actually, I do this for most purchases, even if they’re not huge. I've been looking at I-pods vs. MP-3 players for months now.

We pretty much only use our CC for emergencies, but we do buy flights with the CC. We have to fly to visit my husband's family. We've always been able to pay it off within a month or two, but we're coming into some more difficult financial times, and it's not going to be very easy to buy flights. So I'm stressed because I don't want to say he can't go visit his family, but I am dead against credit card debt. Driving would be tough--we have an 8-month-old baby and the drive is about 22 hours.

From a TV news story on credit cards:

What do credit card companies call customers who pay off their balance every month?

Deadbeats.

I use a credit card when we travel, but pay the balance in full when we return.

Well, if that's the way they feel, "Proud to be a Deadbeat". Waving my Deadbeat flag

We use our CC for EVERYTHING. Really, EVERYTHING. However, we don't spend money we don't have for ANYTHING so the bills are paid in full each month and we have never carried any CC debt. Trips are no different. If we can't afford the trip, then it needs to be rescoped or shelved for another time.

I can't imagine taking on debt for anything other than a home. Not even a car. Paying interest on a depreciating asset or an experience is not worth it in my mind.

taitai

Author: taitai
Date: 02/10/2009, 01:12 pm
We use our CC for EVERYTHING. Really, EVERYTHING. However, we don't spend money we don't have for ANYTHING so the bills are paid in full each month and we have never carried any CC debt. Trips are no different. If we can't afford the trip, then it needs to be rescoped or shelved for another time.

Same here!

The deadbeat thing cracks me up. I guess V and MC aren't content with a percentage of every purchase made with a card with their logo on it.

<What do credit card companies call customers who pay off their balance every month?
Deadbeats.>

Actually more often they call us leeches.

They can call us all they want, guess who is laughing all the way to the bank! We don't break the law, just careful with our money. And use the points we EARN not steal!

They do not seem to object paying the balance in full each month . . all of them make it vry easy to sign up for that on their websites

I have been "leachng" off them for 40 years

Same here too. The only difference since my 2004 post is that my mortgage has been paid off

Same practice as everyone else. Love being a "deadbeat"!

Congrats Kal on the house payoff; huge milestone!

I too love being a deadbeat. Especially during these times.

DH and I have traveled to all the US states except Hawaii. We pay cash all the way. Except we do carry one credit card for gas/hotels. But as soon as the bill comes in it is paid off. If one has to go into debt they should not go. Obviously they cannot afford it.

Can't believe I haven't responded to this one - Our airfare & place(s) to stay will typically be paid for well in advance (up to a year at times). The only costs we incur on the trip are food, entertainment, some transportation, etc. We usually take ample cash but will also use the credit card for the ease of doing business as well. When the bill comes, we pay it off. The answer, I guess would really be both, but we never really go into 'debt' per se.

Thx noco...
I tell my friends "you think I have an attitude NOW"! hahaha

We put absolutely everything on our cards for the miles.

We don't spend any more or less than if we were walking around with a pocket full of cash.

The only difference is I pull out a card when paying instead of cash.

The balance is paid off every month.

I have found something interesting.

At times when we've made a very large purchase such as hurricane shutters (we live in South Florida), part of the purchase price of a car, etc I have found that for some reason the Visa bill doesn't arrive that month. Then the next one has interest on it.

Of course we complain and it's removed.

The last time we made a large purchase my wife reminded me and when the bill didn't arrive when it usually does we called, got the balance and sent a check.

The cedit cards we use for travel are automatically drafted by the CC company . . that way we do not have to worry about missing a payment.

When we travel, it is usually for and extended periods of time ( 1 -2 months )

For cash while travelling, we use the ATM's . . that way we are never carrying a lot at any one time.

We do not use Debit Cards because of the difficulty recovering a disputed or illegal charge

We never, ever, go into debt for travel. For one thing, once you've gone, you've been.

For another, we're not hardly home yet before looking forward/planning our next excurions

For me, personally, it is ridiculous to receive/pay a bill for anything consumed previously - a hotel stay, meal, whatever...and can't even imagine paying ridiculous interest rates on same!

More often than not, we prepay everything - for the HUGE discounts primarily. So, most or all of the trip is paid for when we go, at significantly lower rates and no interest!

In addition, we save shopping and dining out for travel, and actually do little shopping and moderate dining.

Myer- one of my "bigger" credit card purchases was buying land in Mexico (San Felipe). They let me buy half of it with credit card which was 20K. I loved getting the miles. Of course, I paid it off in full that month; treat it like a cash purchase but just get the miles.

I would never take a trip and pay for it later. I always have my airfare and some other things paid in full before I go. I have the rest of the money I have saved in two accounts and use my ATM. If I charge something, the money is in my account to pay for it as soon as the bill comes in.

I can relax, I can shop, I don't have to worry about anything I'm spending as long as it's within the money I have to draw on, of course. To take a trip I couldn't afford and have to pay off for months is just not the way I want to travel.

Well I didn't get in on it 5 years ago, but I say the same thing I said when someone brought it back up 2 years ago.