6 Common (and Costly) Travel Mistakes to Avoid
Nearly every corner of our planet boasts interesting places and landscapes you have to see to believe. Whether you crave crystal clear, turquoise waters to swim in, inspiring cities to explore, or mountains to climb, your options are nearly endless if your mind is open and your budget is big enough.
Unfortunately, too many people spend far too much—and more than they need—to explore the most sought-after destinations around the globe. No matter where you choose to go, and how you get there, these common travel mistakes can cost you a bundle unnecessarily—or even ruin your finances if you let them:
Booking Travel Without Shopping Around
If you’re someone who books the first flight or vacation package that catches your eye, you’re definitely leaving money on the table. The internet is a treasure trove for travel savings and deals, which means you’re spending too much if you’re not shopping around.
Before you book any flight, hotel, or travel package, you should compare prices on at least three online portals. Travelocity, Expedia, and Priceline are popular price-gauging websites, but you can also use an aggregator like Kayak.com. Finally, make sure you compare prices you could book directly with airlines and hotels to see who offers the best deal.
Not Using Travel Rewards
You’ve probably heard about travel rewards cards that dole out airline miles and hotel points, but have you taken advantage? If not, you could be overpaying for travel by thousands of dollars.
Earning travel rewards isn’t that hard provided you have good credit and the ability to repay credit card balances each month. Most airline credit cards offer enough miles as a signup bonus to pay for at least one—and sometimes two—round-trip flights right off the bat, and many hotel cards offer several free nights as an incentive to sign up.
Before you embark on your next trip, make sure to explore travel card options to see what’s available. You might be surprised at just how lucrative these offers can be.
Paying Foreign Transaction Fees
When traveling abroad, you shouldn’t have to pay extra fees just for using your credit card. But, that’s exactly what happens when people travel with a credit card that charges foreign transaction fees.
To avoid paying the average 3 percent fee for purchases made overseas, make sure to get a credit card with no foreign transaction fees before you depart. Doing so will save you an average of $3 for every $100 you spend.
Staying on the Beaten Path
No matter where you plan to travel, you will pay more to dine and shop near major tourist attractions and squares. When in Italy, for example, you may pay as much as 40 percent more (and often for less authentic food) to dine on a piazza than you would just a few blocks away. The same is true for shopping for nearly anything, since stores located on premium real estate have to charge a premium to recoup their costs.
The bottom line: Whether shopping or dining, wander off the beaten path for the best deals.
Traveling Without Travel Insurance
If you don’t buy travel insurance before you depart on an expensive trip with nonrefundable travel arrangements, you may live to regret it. Without the option for a refund, you could be out of luck if you have to cancel your trip or your trip is interrupted or ruined due to inclement weather or another emergency.
Before you travel, you should buy travel insurance that will refund the costs of your trip in the case you can’t travel. Also consider signing up for a travel credit card that offers certain coverages like trip cancellation/interruption insurance, primary auto rental coverage, or baggage delay insurance for free as a cardholder perk.
Racking Up Travel Debt
Using a credit card to travel for the consumer protections or rewards can be a smart move, but only if you have the cash to pay for your trip right away. If you use credit to pay for travel without a plan, you could return home to a credit card bill you’ll pay off for years—and a world of regret.
The best way to plan for any trip is to start budgeting right away. Open a targeted savings account just for travel and make sure you have the cash to cover your trip before you depart. Since the average credit card charges an interest rate of 17 percent, not doing so could be an expensive mistake.