Why a Good Credit Score Matters
IF YOU WANT TO TRAVEL
Travel has been booming lately post-pandemic, so unfortunately, high demand and rising inflation have combined and made it more expensive than it used to be. This has led to a lot of people accumulating travel debt as a result of these worrying variables. An article on Forbes has covered the phenomenon and noted how “Fly Now, Pay Later” has become a popular option to combat the cost of living crisis.
Many people who want to travel still need to save up for it. One in five U.S. travelers are in debt because of travel, while the UAE has the highest number of consumers willing to take on more debt in 2023 in order for them to travel. Whether or not you plan on joining that category, it’s important to have good credit if you want to get out there in the first place.
Having good credit ensures that you can cover whatever needs to be paid. When combined with ‘11 Ways to Make Money Traveling’, you can confidently set out on an adventure knowing you can afford it. It also comes with a host of benefits that will make travel much more accessible in the long run.
More Travel Rewards and Benefits
When you have good credit, you are more likely to gain access to travel rewards and benefits that have stricter financial criteria for eligibility. This is not just because of qualification by likely because a better score means a higher credit limit. With that, many financial institutions and programs will give you more offers relevant to your spending profile.
You also have more options with how or what you’re going to redeem. For instance, there are plenty of exclusive lounges, discounts on flights and accommodations, elite upgrades, and gifts that are perks given solely to those that are part of rewards programs. These types of programs can be a game-changer in the comfort and cost of travel, so a solid credit score is necessary to make use of them.
Better Approval Chances for Credit and Travel Loans
Credit cards and travel loans can be viable ways to make your travel goals a reality. For travel loans, you will need to have a good credit score if you want to have your application approved in the first place. And even when your loan pushes through, a higher credit score translates to lower interest rates and easier repayment terms.
Meanwhile, credit cards can be a convenient means to travel as they are secure, largely accepted in most countries and establishments, come with travel rewards, have reasonable currency conversion, and let you go cashless. It’s also better for keeping track of your spending as long as you regularly check your payment history.
According to Upgraded Points, credit card companies will always opt for a hard credit check to get a full picture of whether or not you are eligible for a card. A hard credit check will stay on your credit report and temporarily decrease your credit score, so having a good score as a base point will be important if you want to be approved and continue to have good standing in general.
Lower Interest Rates
Another benefit of good credit is getting lower interest rates. This applies to your credit repayments, loans, and transactions that you charge to credit. Something as simple as a lower interest rate can do wonders in minimizing the overall cost of your travels.
The New York Times details how the Fed intends to raise interest rates in 2023. Although there will still be a cap imposed to make things more manageable, it’s more important now to have as many ways possible to get the lowest rates you can get. Considering the hiked-up rates, one of the reasons to get a personal loan may be to more effectively budget for your trips.
Smoother International Travel
International travel is very exciting, but it can also be complicated if you don’t have everything prepped properly. A higher credit limit gives you access to more conveniences and amenities, which will come in handy for long connecting flights that cross different borders.
On top of that, you can also expect faster approval for any applications you might have for travel packages, vehicles you want to rent, or even long-term accommodations for extended trips. Traveling to a different country for a long-term stay is much more accessible these days, especially considering how tourist-friendly places like Barcelona and Kuala Lumpur are now some of the best places to work remotely. You can earn money to support an extended vacation, so all you need to worry about is qualifying.
Access to Travel Insurance
Finally, better credit means having access to comprehensive travel insurance plans. There are different insurance policies that cover different credit scores, but the best ones do have better coverage if you maintain a solid score.
A survey published by Fortune reveals almost 40% of Americans can’t cover emergency expenses. Even if you don’t think anything will go wrong during your travels, it’s always better to be prepared. Having good insurance also takes away any worries you might have as you know things will already be covered. With good credit, you can expect your travel insurance to cover medical expenses, flight cancellations, lost baggage, theft, and other liabilities.
