June 13th 2024.
As the vacation season approaches, it's important to take a moment and ensure that your credit is not at risk. It's easy to get caught up in the excitement of planning a trip and overspend, but this can have negative consequences for your credit. So, before you start packing your bags, here are some tips to keep your credit in good shape while on vacation.
Firstly, it's best to avoid applying for any new retail credit cards. While the promise of a 10% discount may be tempting, it's not worth it in the long run. Opening a new account can actually harm your credit score, as the length of your credit history accounts for 15% of your FICO score. The longer you have had credit, the better it reflects on your ability to manage it. By opening a new credit card, you are essentially lowering the average age of your credit and potentially lowering your score. Additionally, applying for credit means that there will be an inquiry on your credit report, which can also have a negative impact.
When shopping online, it's important to be cautious and only visit websites that you are familiar with or have done business with in the past. Giving out your credit card number to unknown websites can put you at risk for fraud or identity theft. It's always better to be safe than sorry when it comes to your credit.
Another important factor to consider while on vacation is how much you are spending. It's easy to get carried away and overspend, especially when using a credit card. However, it's important to be mindful of your budget and only charge what you will be able to pay off at the end of the month. Charging too much on your card can cause your owed amount to spike, which can have a negative impact on your credit score. Remember, the amounts you owe make up 30% of your FICO score.
Lastly, don't forget to pay your bills on time. It may seem like an obvious tip, but it's easy to overlook when you're busy traveling and visiting family. Make sure to set reminders in your calendar or set up automatic bill payments to avoid missing a payment. Your payment history is a significant factor in determining your credit score, accounting for 35% of your FICO score.
In conclusion, while planning your vacation, don't forget to also plan for the safety of your credit. Avoid applying for new credit cards, be cautious when shopping online, stick to your budget, and make sure to pay your bills on time. By following these tips, you can enjoy your vacation without worrying about jeopardizing your credit. And if you're in the market for a new credit card, be sure to check out our helpful guide on how to choose the right one for you. Happy travels!
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