Don’t make financial mistakes which can ruin your vacation, part 2

New York City Skyline, photo by NSL Photography

With summer vacations not far away, many are actively investigating new vacation plans, while other are finalizing the details for their upcoming travels. Last week, I spoke about a number of important measures for vacationers to employ to help ensure that once home, the great memories of their vacation aren’t ruined by financial blunders made before and during it.

Last week’s suggestions to avoid financial mistakes included: gathering documents, checking for and avoiding possible credit, debit and ATM card problems, insurance, cellular voice and data plans, and tell-tale signs at home that you’re on vacation.

Once you’re traveling:

Don’t use your credit card to fund unaffordable trip options — Using your credit card while on vacation to pay for something you can’t afford means you likely won’t be paying your credit card bill, in full, for quite a while. The current average percentage rate (APR) for a variable-rate credit card interest today is about 15.6 percent. Using credit card’s “credit” to pay for vacation expenses means your vacation will cost far more than planned due to the large interest charges you will have incurred.

Keep track of your vacation spending — It’s not particularly hard to lose track of spending when away from home when using your credit cards multiple times per day. To avoid blowing your budget, establish a spending limit and stick to it. During the trip, track your expenses and save your receipts.

Extra Tip: If you have a smartphone, use one of the many apps for them to track travel expenses. Rather than use a small bag or envelope to collect travel receipts, I use a smartphone scanning app to scan and store my receipts electronically. I destroy my paper receipts prior to throwing them out, as they contain credit card information.

During and after your vacation, check your credit card statement diligently for unexplained activity — It’s possible for restaurant, hotel and store employees to copy your credit card information without your knowledge when you pay your bill. As you still have your card and your card information may not be used by the thief right away, you may be unaware, for a time, that your card’s security has been compromised. So, review your online credit card statement regularly while traveling and also once home, for charges you didn’t make.

Don’t forget to pay your bills due while you’re on vacation — Bills come due whether you’re home or on vacation. If your vacation is long enough, you might not have received some bills prior to the start of your trip. Don’t let your credit take a dive merely because you’re away.

Pay your bills, or schedule their payments before you leave, if you can. You can also pay bills online during your trip, should you desire, and transfer funds to cover the payments.

At hotels, concessions, restaurants and other places, don’t forget to use membership or credit card discounts — If you belong to membership organizations like AAA, or AARP, check to see if discounts are offered to members from any establishment.

Some credit cards have discounts available, free memberships, special travel insurance programs, etc. Don’t forget to use them to reduce your cost of travel.

Don’t carry all your credit, debit and ATM cards with you when sightseeing — I carry two credit cards with me while traveling. I carry only one while touring and leave the other in my hotel safe. If a card is stolen or if I lose it, I still have the other while waiting for a card replacement. I use a similar strategy for debit and ATM cards when traveling with another person. One of each card remains in the hotel safe.

Extra Tip: Don’t forget to immediately contact your credit card company or bank if your credit, debit or ATM card is lost or stolen.

When touring, secure your laptop and tablet — Expensive laptops and tablets are major theft targets. They generally contain scads of personal, confidential information about you and your family. When you’re out for the day, don’t leave them out or even hidden in your luggage. Lock them up in your hotel safe to avoid their financial loss and the possible identity theft their loss could trigger.

Be careful of using a publicly accessible computer — While traveling, many use their hotel’s business center computers or an Internet Cafe. Unfortunately, whenever you use a publicly accessible computer your identity is at risk. These computers can contain spyware which records every keystroke, user name, password and website you visit. If possible, avoid business center or Internet cafe computers.

If you must use one, always log out of the computer after your session, but first, log out of any websites you visited, delete your search history, passwords, cookies and temp files. And, close the browser used.

  • MeanMeosh

    This comment was probably more relevant to Part I, but while on the subject of credit cards, make sure that your card will actually work in the foreign country you’re visiting. If the countries you plan on visiting use “chip and pin” technology, you may run into problems using a standard magnetic stripe card. At restaurants and stores, they can run your card without a PIN, but you may have to argue with the waiter or shopkeeper. The larger issue is with automated kiosks you find in places such as metro and train stations – those often will not accept magnetic stripe cards at all (though that problem is easy enough to get around, just get cash out of the ATM machine and pay that way). Personally, I’ve started carrying a chip and pin card as my “second card” when traveling overseas just to avoid potential hassles.

  • NedLevi

    You’re absolutely right about “chip and pin” vs. “magnetic stripe” cards. At Schiphol airport’s train station, for example, magnetic cards don’t work at the kiosks, but you can buy a ticket at the windows. I too carry a chipped card which also has a magnetic strip.

    Fortunately, in the US, by October 2015, Mastercard and Visa have agreed to be issuing Chipped cards. They will not necessarily be Chip and Pin cards at that point, but will be like many of the current AMEX cards, which are Chip and Sign, which work almost everywhere in Europe except a few kiosks, though some may be Chip and Pin immediately, and others migrate eventually that way. I’ve used the Chip and Sign card all over Europe and outside of a few Kiosks, the card has worked perfectly and no hotel,
    restaurant, or store has had a problem using it. In fact, if you use a Chip terminal, the magnetic stripe on the back of the card for current US use, won’t work.

  • Tess

    If you think to use a Gift Card for purchases, you may run into a problem. American Express Gift Cards did not work at establishments that would accept regular American Express cards on a recent trip overseas.

  • Ton

    i have had a couple of people come over to here (netherlands) and have their cards declined or them looking a bit sheepish because they don’t know about the pin.

    the magnetic variant might work but i see a lot of new pin machines in shops that have a option for contactless payments but no magnetic scanner anymore.

    the magnetic is very easy to skim in fact we got a phonecall asking my boss if happened to be in vegas at the moment, which he was not, as someone was trying to use a copy card there.

    not sure if this is same in usa but most cash/creditcards over these days are europe only unless you ask them to be released for worldwide use. Would not be supprised if the same is valid for us cards

  • Ton

    another thing to watch out for is atm machines

    a recent piece on dutch tv showed that most atm’s when you try to get cash with a foreign (ie different base currency) card the machine will give you a couple of options

    1 will be to get the cash and have your own bank settle the exchange rate the other one will be a direct option where the local bank gives a exchange rate (and the amount in your basecurrency would be charged)

    in 100% of the cases accepting the local option was more expensive between 5 en 30% more expensive in fact.

    you can watch the item here

    it’s in dutch but it shows the kind of screens you would see