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Vacation Financing – Taking Out a Loan vs Using a Credit Card

With summer just around the corner, the lure of far-off places and amazing adventures can be almost overwhelming. We all want to take some time during the warm summer months and get away, escaping the routine of the day-to-day and experiencing something new. However, if your vacation financing options are a bit more restrained than you’d like, you may be considering using a credit card in order to make the trip.

No matter how you look at it, using a credit card for vacation financing is dangerous. Interest compounds monthly (typically at a much higher rate than a loan), which makes it incredibly difficult to pay down, especially within a reasonable timeframe. With credit cards, minimum payments are so low that you actually pay off very little if you just stick to the prescribed amounts on your monthly statements. Furthermore, if you max out your card to cover the vacation, this can seriously impact your credit – making it difficult for future funding.

A personal loan is a far better option for vacation financing. First of all, with a fixed term repayment plan, you know exactly when the loan will be paid off and how much you are required to pay each month. You also don’t have to worry about minimum payments that are only interest with no real principle payoff. You also know the total interest you’ll be paying because it is based on a term.

Perhaps the best thing about using a personal loan to fund your vacation is that it is much better for your credit. With a personal loan, you can’t ‘max out’ your balance, thus negatively impacting your credit score.

Worried that less than stellar credit will completely prevent you from taking the time away? Don’t be. There are companies that recognize the importance of second chances and will lend to those with bad credit, even undischarged bankrupts. Just be sure they are reputable and well respected.

Wherever you plan on going this summer, be it a far-off city to take in the sites or a tropical resort to lay on the beach, be sure that the form of vacation financing you choose doesn’t leave you feeling regret once you return. The whole point of a vacation is to help destress – so you don’t want it to have the opposite effect!

At Prudent Financial we can help you obtain vacation financing that doesn’t leave you struggling to pay and dealing with impacts to your credit once you return form your holiday.

Call us today at 1-888-852-7647.

 

 

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