Looking to take a family vacation this fall? Temperatures are starting to cool off and kids are back to school, so this means a little dip in the traveling industry. With this lull comes less crowds and it can also mean lower prices! While this seems like the perfect time to plan a getaway, you may want to consider some of the other factors, such as your credit score, that can affect your travel this fall.
This post has been sponsored by Lexington Law. All opinions are mine alone and are honestly conveyed.
How does your credit score actually affect your travel plans?
You probably don’t associate your credit score with your ability to take a vacation. However, the two may be more related than you realize. Here are five ways that poor credit may affect your plans when it comes to taking a trip this fall.
Ability to make a vacation reservation
If you have very poor credit, you may not have any credit cards. Credit card companies will close credit cards that have not been paid for an extended period of time or if you have defaulted on the balance. Once the card has been closed, there is probably not much that you can do about it. Of course, you want to get the payments up to date and get any bad debts settled, but you would likely need to apply for a new credit card—and if you have negative factors showing up on your credit report, you may not be able to get a new credit card. But why does this matter? Many hotels or resorts require a credit card to make a reservation. Even if that is not the method of payment you will be using, they still require as a guarantee of payment for the reservation.
Purchasing airline tickets
Unless you are able to pay with a debit card, a low credit score can actually keep you from purchasing an airline ticket online if your score is so low it has kept you from having a credit card. If you are unable to buy airline tickets, then your travel will definitely be limited to where you can go by driving. There may be travel agencies that you can utilize and pay for your vacation up-front with cash or you can even utilize gift cards for certain airlines. If you have a friend or relative that is willing to purchase gift card in exchange for the cash, this may be the way to go. Having someone else’s credit card buy the actual ticket with your name on it may flag your purchase as potentially fraudulent.
Getting a rental car
Many car rental companies will actually do a credit check before renting a car to you—especially if you are paying with a debit card or cash. If you have a low credit score, they may have restrictions on your rental or even decline to rent a car to you based on the higher risk factors that can be indicative of a lower credit score. Of course, there are several resorts and areas that you wouldn’t necessarily need a car because of shuttle buses or public transportation, but not having the option to get a rental car can definitely make a difference in where you will spend your vacation if it is based on the availability of these types of services.
Interest rate that you will pay
If you do have a credit card, but also have a low credit score, you may find that the interest rate is very high. And if you happen to use this credit card with the high interest rate to pay for your vacation, then you are, in effect, paying more for your vacation than it actually costs. As you are probably aware, interest on a credit card can accumulate fairly quickly, especially if the interest rate is high. So unless you simply use the credit card to keep track of all your vacation purchases and then pay it off when the bill comes, you may end up paying several hundred dollars in interest until the balance is paid off.
Ability to earn travel points and vacation perks
If you are going to use a credit card, you may as well use one that earns some sort of perks for you. Applying for a credit card that offers travel perks and incentives is like applying for any other credit card, so if your credit is too low, you may not qualify—and not having one of these cards can actually be costing you money on your travel. So how can not having this type of credit card actually cost you money? Very simply, you are missing out on free stuff. These credit cards function like any other credit card, except when you make purchases, the credit card company rewards you with points. These points can then later be used to take money off of your credit card bill for qualified travel purchases.
For example, I have a Capital One Venture credit card. This is not an affiliate link, just sharing from my personal experience here… J Every purchase I make each month earn points which I can redeem toward travel expenses. Travel expenses can be a lot of things so you will just have to pay close attention to what shows up as a qualified travel expense. The points can typically be redeemed on hotel rooms, rental cars, airline tickets, and the like. I was actually able to redeem points last year on our family’s purchase of The Polar Express train ride tickets—so sometimes even entertainment is a qualified travel purchase!**
**Terms and conditions are subject to change by the credit card company and my personal experience is in no way meant to make a claim or a guarantee of how future points can be redeemed.