5 Tips For Saving Money On Vacation

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[The following is a guest post…]

When you’re on the road, whether it’s for leisure or business, it’s really easy to let the spending get out of control. This isn’t conducive to sticking with an overall savings plan, but it is important to keep your bigger financial picture in mind even when traveling; and to focus on saving money on vacation. There are several ways to keep expenses under control with a little bit of future planning. Here are some tips on how to save while away from home.

5 Tips For Saving Money On Vacation

By following these simple tips, you will be on your way to saving money on vacation expenses! Even if you are traveling on business, these tips can help you to save money.

Set A Budget

Before you leave the comfort of home, sit down and figure out a budget for your trip. Factor in what you’re willing to pay for food, lodging and transportation. Set an amount for incidentals, including souvenirs, and stick to it. If you happen to come in under budget, make sure to put that money back into savings.

Decide Your Method Of Payment

Some people research to find the best credit card offer and plan to pay for their entire vacation with plastic. This can be an effective strategy, but only if you have the money set aside already and can pay off the balance before the end of the billing cycle, otherwise you will be paying high interest rates. Choose a card with a reward program, and you can come out ahead. There is always the option of utilizing 0% balance transfer credit cards if you are unable to pay off the balance right away.

Use The Credit Card When Traveling Out Of The Country

Using a credit card when traveling outside the country affords you a little more protection than using traveler’s checks or cash. Some offer travel insurance, a much better exchange rate and other buyer’s protection options. Check your credit card agreement for more details on travel information.

[Khaleef’s note: Using credit card benefits to offset some of your travel costs is a great idea, you can also set up a similar plan for your day-to-day spending.]

Saving Money On Vacation By Shopping And Eating Locally

The native residents of an area will know the best and least expensive places to shop and eat. Ask your hotel desk clerks, housekeepers and gas station attendants where they like to go and what they like to do. Chances are they can give you the inside track and you can save a lot of money this way.

Do Not Pre-pay In Advance

It may look as if you are saving significant money when you book and pay for a hotel room in advance, but the truth is you won’t save more than a couple of dollars after all the fees are charged and pre-paid reservations are not refundable. If anything happens, you are out that money no matter the circumstances. Stay away from the third party vendors and book the reservation through the hotel’s website or directly with the hotel.

The best tip is to plan ahead as much as possible. You can’t plan for every contingency, but being prepared is the best way to save money when away from home.

photo by Graeme Weatherston

Stewardship of Resources Can Include Smart Payday Loan Borrowing

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[The following is a sponsored post on behalf of The Payday Place. To be honest, I do not have the hatred of a payday loan that many personal finance writers have. I think that it can be a tool for people who are in certain financial situations.]

We are all given many talents that should translate into how we take care of ourselves, our households and our communities. Some of those talents include the things we do to earn a living. Other talents include our capacity for managing those earnings. A cash advance loan, handled correctly and at the right time, can be part of wise stewardship.

Payday Loans As A Financial Tool?

How so? The idea of a payday loan cash advance is to navigate the challenge of timing. Say you had an unexpected or emergency expense shortly after your last payday. Something as simple as a car repair – necessary for managing family matters as well as getting to and from work, for many of us – can drain your bank account before your bills are paid for the month.

If you do not have a credit card or other line of credit to accommodate that expense, or if borrowing through that card would come at very high interest rates, you would need to find the money elsewhere. [editor’s note: This is one of the main reasons why you need an emergency fund]

An Early Payday Solution

A payday loan can often provide the cash advance you need to take care of paying your bills and your car repairs or other emergencies. In effect, you are borrowing from yourself.

Are these easy to get? And importantly, can they create a less-than-optimal solution?

A paycheck advance loan is relatively simple to get online. And if you shop around, or use a payday loan aggregator service (for example, The Payday Place), you should be able to find the lender that provides the best loan terms for your situation.

If you worry about borrowing when finances are tight, the most important question is how well can you manage yourself and your expenses over the next four to six weeks? Can you reduce expenses in the future, to allow yourself to catch up and keep bills paid in the pay period to follow? After all, a cash advance loan on a paycheck is borrowing from the next pay period.

[editor’s note…again: I think this is a great piece of advice, and it causes you to be extremely careful if you ever find yourself in a situation like this.]

Give it prayerful consideration. If you fully understand the terms of the loan, then you will know how to pay it back. After all, a very important part of stewardship is to use your brain as among your most valuable talents.

photo by rinkjustice

Tips For Using Credit Cards Responsibly: Advice from Nora Dunn

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Nora Dunn is a former CFP who sold everything she owned, including her business, in 2006 to travel the world. While she’s never looked back and has been having a blast as a professional hobo ever since, Dunn still needs to travel in a financially sustainable manner.

A large part of her strategy? Using credit cards responsibly. I recently caught up with her during an internet-connected travel moment, and picked her brain about the practice of using credit cards in a way that makes good financial sense.

Tips For Using Credit Cards Responsibly: Advice from Nora Dunn

What Are Some Examples That Illustrate When Using Credit Cards Is A Good Idea?

First, using a credit card and paying it off in full each month helps you to build a great credit rating, which comes in handy when applying for loans and mortgages. The last time I took out a loan to buy a car, I received all sorts of special concessions and security deposit waivers by virtue of having an excellent credit rating.

Second, consistent credit card usage also can be handy for providing a good account of your spending habits. It’s considerably more traceable than paying with cash and wondering where all your money went at the end of the month.

However, my favorite reason for using credit cards (somewhat religiously) is for the accumulation of frequent flyer miles, which for me has been a way to reduce my full-time travel expenses drastically (and even experience a little business class treatment).

What Are Some Fees That People Should Watch Out For?

If you take out a cash advance with your credit card, interest accumulates from the day you withdraw the funds. This might come as a surprise if you’re expecting the same 20 plus day interest-free grace period that you receive on purchases.

Also, if you leave the country and buy things in foreign currencies, expect to pay a currency conversion commission of approximately two and a half percent. But if you know what to look for, you can find a credit card with no foreign transaction fee, and save a ton on travel.

What Should People Look For When Shopping For A New Credit Card?

What to look for in a new credit card depends on your needs. I like cards that have a rewards program of one sort or another, and my favorite type of reward is of the frequent flyer mile ilk (for obvious reasons). [Editor’s note: Take a look at our list of credit card benefits]

What Would You Say Are The Most Common Credit Card Mistakes People Make?

Carrying a balance on credit cards – especially high-interest department store cards – is one of the biggest mistakes you can make. I don’t consider my credit card a license to print money that I don’t have. Instead I use it in a similar manner to a debit card: only if there’s enough money in my bank account to cover the expense.

So There You Have It

Nora’s advice sounds an awful lot like the credit card gospel that I tend to preach, which makes me feel a lot better. At the end of the day, credit cards are tools to be used appropriately, and it always pays to respect their pitfalls.

Using credit cards as a convenience, to accumulate rewards, and to pay for travel expenses can save you a ton of money in the long run. But accumulating too much debt or not paying your bills on time can bring all those benefits crashing down around you.

This was a guest post written by Jake at Nerd Wallet. NerdWallet.com is a site dedicated to educating consumers about proper use of credit cards.

photo by Andres Rueda

4 Credit Card Benefits You Should Not Ignore

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We constantly hear and read about all the negative attributes of credit cards. But if we use them correctly, we can take advantage of the many credit card benefits that are available! Below are the four most prominent:

Credit Card Benefits On Items You Purchase

One of the most useful of these credit card benefits is a feature that is sometimes known as “purchase protection“. Most of the major types of credit cards will shield you from loss if you are not happy with your purchase within a certain period of time.

Imagine that you purchase a brand new HTC DROID INCREDIBLE . Then you go to set it up and realize that it’s used – the stored numbers of “mom”, “wifey”, and “Nicole” give it away! You bring it (or send it) back to the vendor and demand a refund, and they refuse to issue one (claiming that you just didn’t like the phone and you put the numbers in, just to try and return it 😮 )!

If you paid with cash, you would have to fight with the vendor in order to get your money back. However, if you made your purchase with a credit card, all you have to do is call the issuer and tell them to withhold payment to that vendor. Once you display that you are not satisfied with the item and have returned it, they will credit the charge back to your card!

Credit Card Benefits That Protect You From Identity Theft

Most credit cards also offer fraud protection. If you report your card lost or stolen and then charges are made against your account, you will only be liable for the first $50. So if someone steals your credit card and then goes out and buys a new Apple MacBook Pro , you will only have to pay $50 for the charge. Actually, many banks will even waive the $50 fee for you!

Did Somebody Say Rewards?

Many cards will offer a rewards program, that will convert your purchases into airline miles, points that are redeemable for various merchandise and gift cards, and even cash! The more that you spend, the more rewards that you can earn.

Some finance “experts” don’t like credit card rewards because they believe that these programs promote irresponsible spending. If people are buying things that they wouldn’t normally buy, just to get a few more points, then these experts are correct. However, these benefits are worth it to those who are able to manage their spending in a disciplined fashion.

Easier to Track Spending

Most banks will offer a breakdown of your monthly and annual spending online. This can be very useful when you want to get an overview of your spending. If you make all of your purchases with one card, then all of your spending will be presented to you in a nice table or graph – and you will also rack up a fair amount of rewards!

A Quick Warning

We touched on this already, but if you have had problems with making irresponsible purchases in the past, please make sure you have addressed your undisciplined financial lifestyle before considering these benefits. One or two bad purchase can easily offset these credit card benefits. If you are currently battling with debt, here are a few simple ways to cut your credit card expenses. Then be sure to check out this credit score guide to see where you stand.

photo by The.Comedian

This article was featured in the following carnivals:

Carnival: Best of Credit Cards and Money

Family Finance Carnival

Carnival of Wealth #27 – Feb 27 2011 Edition

Reader Questions:

  1. Do you use a credit card for any of the reasons listed here?
  2. Have you ever needed to call a card issuer to get a refund because the vendor refused to give you one?

Kardashian Kard Kanceled – Christmas Comes Early!

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You may remember a few weeks ago I wrote about the new Kardashian Kard. This pre-paid debit card, which was initially targeted to teens, is full of ridiculous fees and should be avoided at all costs!

Well, now the Kardashian sisters no longer want to be affiliated with the card. Immediately there was a lot of negative press calling the Kardashian Kard a ripoff! Now Yahoo Finance is reporting the following:

An attorney for the sisters sent a letter Monday to parties affiliated with the card asking them to immediately stop using the names and images of the three sisters.

The notice came after Connecticut Attorney General Richard Blumenthal warned on Friday that he would investigate the program to see if it violated state laws to protect consumers. He called the card’s fees “predatory.”

It’s not just the fact that the card includes these awful fees, but that the card is being marketed toward young adults who have little to no experience with debit cards or even bank accounts.

The fact that the Kardashian’s are so popular with teens and young adults could have made this a great opportunity to teach them about personal financial management. Instead, they used this as a way to rip them off!

If you don’t remember how terrible the fees actually are, I’ll repost them here:

The Kardashian Kard’s Pricing and Fees

Initial Purchase Options:

  • 6 Month Payment Option (save $2.70) – $59.95
  • 12 Month Payment Option (save $10.40) – $99.95

These options include the following charges:

  • One-Time Card Purchase – $9.95
  • Card Arrives Loaded with $5 – $5.00
  • Monthly Fee – $7.95/month

So, when you first purchase this card, you can either buy a 6-month package or a 12-month package. Then after that initial period, you must pay $7.95 each month! This means that in the first two years of owning the card, you will have to pay at least $195.35. Keep it for 3 years and you’ll be out almost $300 in fees!!!

There are fees for the following:

  • ATM withdrawals
  • ATM Inquiries
  • ATM Declines
  • Point of Sale Declines
  • Transfers to or from an external bank account
  • Transfers to another Kardashian Kard
  • Adding Money to Your Account
  • Canceling Your Account (when requesting a refund by check)
  • Calling Customer Service
  • Paying a Bill
  • Replacing Your Kardashian Kard ($25!!!)

It is because of this list of fees why the Attorney General threatened to investigate the card! These fees put the card in the same category as payday loans in my eyes!

Don’t expect to see a long drawn-out battle over the Kardashian sisters’ contractual obligation to promote and be associated with the card:

In a statement late Monday, card-issuer University National Bank confirmed that it had ended the sale of the Kardashian cards. Consumers who bought the card will get their money back, including fees that they might have incurred, it said.

MasterCard, which was a partner in the card, said in a statement that “the decision to end the program affirms that consumers did not find value in this particular prepaid offering.”

“Did not find value in this particular prepaid offering”?!?!?!?!? They wanted you to pay $100/year for this card and expected you to find value in it? At least the misguided (I’m being extremely kind here) people who purchased this card will get their money back.

The website has already been shut down, so I guess it’s really official. Of course, my wife just asked me, “why didn’t they just improve the deal?”. All I can do is laugh, because that would have been the sensible thing to do. They could still have the Kardashian name to back them, but just not gouge kids as much as before!

Reader Questions:

What are some ways that you are working to teach your kids about personal finance?

Did you buy this card for yourself or your kid?

What do you think about all of these fees?

Why do you think they decided to shut the card down rather than rework the fee structure?