How much did you actually pay for your vacation?

Using a credit card to pay for vacation expenses can drive up the cost of your vacation.

Have you ever taken a vacation and charged most of the expenses for it to a credit card? If so, how long did it take you to pay for it? If you were able to pay it off in full right away or within a couple of months, it probably did not cost too much in interest or possibly, there was not any interest to pay on the money you borrowed. But if it took longer, you probably paid more than you thought for your vacation especially if you only made the minimum payment each month.

Using credit has the advantage of being able to have access to goods and services such as hotel rooms, meals and entertainment right away. But credit usually also costs money. You are also spending money from future paychecks or other income. You are vacationing on money you expect to have down the road.

It is also very easy to overspend. Losing track of how much you have spent because you do not get the bill for a month is easy to do without having some type of method of keeping track of how much you are spending.

Many people find themselves with credit problems because they do not keep track of the purchases they make with their credit cards. Do not be shocked when the bill arrives in the mail! Follow these easy tips to keep track of monthly credit card charges:

  • Determine the total amount you can responsibly charge for the month
  • Keep track of your credit spending like you would balance a checking account
  • Subtract each purchase amount from the limit you set at the beginning of the month
  • Do NOT use your credit card(s) if you are near your credit limit

Always keep in mind that when you use credit you are agreeing to pay back the money you owe, plus interest and finance charges. Keep track of your expenditures and know what fees you might have to pay for late payments, over the limit fees, and any other fees associated with your credit card.

For more information about using credit, check out the resources at the MI Money Health website from Michigan State University Extension

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