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

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

Mar 24th, 2004, 12:53 PM
  #1  
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Do you save first, then travel, or travel and go into debt?

I was listening to another story this morning about how many Americans are carrying $10,000+ in credit card debt. (A lot.) I'm guessing most of those people are buying "stuff," not spending $$ on travel, but I don't know that for a fact.
Do you save up for your travel, or use credit cards and pay off the trip afterwards, or a little of both?

I do a little of both. I put travel money into a separate account every time I get paid. Airfare goes on a CC and is paid off before the trip. Hotel charges are usually paid off after the trip, although my husband and I will often throw a big chunk of $$$ into our CC account before we leave to offset the upcoming charges. We have a frequent flyer CC so we try to use that as much as possible.

We've made it a high priority not to carry a lot of credit card debt. However, a few years ago, we really splurged on our honeymoon, and racked up a LOT of credit card charges. We were both working and we decided "it's a once-in-a-lifetime trip." We paid for a lot of the wedding, too, so that was a big spending period. I was worried about it, but we paid the CC off quickly and it all worked out. So sometimes I think we should just take a HUGE trip, put it on the credit card, and worry about it when we get home. But that's probably crazy talk.

What do you do?
Tansy is offline  
Mar 24th, 2004, 01:07 PM
  #2  
cd
 
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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.
cd is offline  
Mar 24th, 2004, 01:14 PM
  #3  
 
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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.
bmillersc is offline  
Mar 24th, 2004, 01:22 PM
  #4  
 
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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.
gualalalisa is offline  
Mar 24th, 2004, 01:34 PM
  #5  
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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).
Tansy is offline  
Mar 24th, 2004, 01:51 PM
  #6  
 
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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).
fdecarlo is offline  
Mar 24th, 2004, 02:00 PM
  #7  
Sunnyboy
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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.
 
Mar 24th, 2004, 02:09 PM
  #8  
 
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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.
curiousgeo is offline  
Mar 24th, 2004, 02:09 PM
  #9  
 
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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.
ccolor is offline  
Mar 24th, 2004, 02:24 PM
  #10  
 
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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.
bmillersc is offline  
Mar 24th, 2004, 02:33 PM
  #11  
 
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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 is offline  
Mar 24th, 2004, 03:16 PM
  #12  
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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 is offline  
Mar 24th, 2004, 03:24 PM
  #13  
 
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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
OaktownTraveler is offline  
Mar 24th, 2004, 03:24 PM
  #14  
 
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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.
jvrab12 is offline  
Mar 24th, 2004, 03:25 PM
  #15  
 
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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.
DebbieAllen is offline  
Mar 24th, 2004, 03:27 PM
  #16  
 
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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.
DebbieAllen is offline  
Mar 24th, 2004, 03:28 PM
  #17  
 
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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
OaktownTraveler is offline  
Mar 24th, 2004, 03:37 PM
  #18  
 
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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!!!
jvrab12 is offline  
Mar 24th, 2004, 03:45 PM
  #19  
Kal
 
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"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!!!
Kal is offline  
Mar 24th, 2004, 04:20 PM
  #20  
GoTravel
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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.
 

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