Most of us will have dream holiday destination we’ve always wanted to go, and for those of us with families places Disneyland or the Bahamas hold a lot of appeal. However, as anyone who has ever researched these trips will testify, these holidays don’t come cheap!
Not everyone will have the cash in the bank to fund a dream trip upfront, and many people will look for different ways of funding their trip. There are various ways of doing this, each with their own pros and cons. The best solution for you will depend your current circumstances and your overall approach to finance, but there is a solution out there for most people and most budgets.
The first and most obvious way people will pay for the dream trip is to put it on your credit card. There are various benefits to doing this, including simplicity and the additional security involved with the purchase. It’s usually for easier to get your money back if something goes wrong with your booking when you use a credit card instead of a debit card.
Things like cancelled flights or an issue with a hotel are not uncommon, so having the additional security of knowing you probably get your money back is a big benefit. Unfortunately holiday fraud is an all too common occurrence, so be wary of deals that seem too good to be true. There are some good tips on the Action Fraud site to help avoid getting into trouble.
The downside is that for some credit cards interest rates can be quite high. This can occasionally be offset by taking the new card with 0% interest rate on new purchases, however not everyone will qualify for this kind of deal. The type of card you’re offered will depend on your credit rating and your history with the company, so you may not get the best deals if you don’t have a squeaky clean record!
Take the time to shop around try to find the best possible interest rate, and make sure you keep up with the repayments to avoid overpaying in the longer term.
One of the more popular alternatives to using your credit card is to take a holiday loan to help fund the trip. These often provide far lower rate of interest than you would get with a credit card and depending on your income may provide you with more money to use on your trip.
Most major banks will offer some kind of holiday loan product and it’s fairly straightforward to do your research online to find the best possible interest rate.
Alongside the rate being reasonably low, the repayment period can often be spread over a year or two. You’ll know how much you’ll be paying out each month, which can make it easier to budget in the future.
The downside is actually getting approved for the finance and getting through all the paperwork that’s often involved, but overall it’s a useful way of paying for your trip if you don’t have the money on hand.
If you’re taking a longer-term view, then setting up an effective savings plan can be the best way of paying for your trip in the future. By getting a rough idea of how much your trip will cost you can set money aside each month to reach your overall target. This way you are avoiding any interest payments and ultimately saving money on the cost of your trip and the long-term.
The downside is obviously that you need to be patient when it comes to booking and taking your trip, and you may not be in the position to take advantage of any discounts or offers which may appear on while you are saving. However, when you factor in the benefits of avoiding interest costs of using a credit card or a loan it may end up being substantially cheaper and the long run.
A once-in-a-lifetime trip is a kind of thing all families should get to enjoy, and by carefully assessing your financial options you dream holiday can easily become a reality. Making smart use of credit facilities or taking a sensible approach to saving will allow you to fund your trip and avoid any potential financial disasters in the future.