Avoid these 7 summer credit mistakes
By Dawn Papandrea
June 29, 2015
Whether you’re preparing for a summer trip or just enjoying some down time at the beach, it’s tempting to take a vacation from your usual credit card responsibilities.
“We tend to be more lax over the summer,” says Mike Brady, president of Generosity Wealth Management in Boulder, Colorado. If you’re not careful, you might undo the good financial habits you’ve been following the rest of the year in just a couple of months.
Much like going to the beach without sunscreen, poor card management can end up leaving you burned and blistered. To protect yourself, here are seven common summer money blunders to avoid.
1. Don’t take all of your plastic with you on vacation.
You should never really carry around more than one or two cards, but especially when you’re traveling. You don’t want the hassle of having to close all of your accounts should your wallet be lost or stolen. Also, it’s less temptation to spend extra on souvenirs and other upgrades, says Katie Ross, education and development manager for American Consumer Credit Counseling, a nonprofit credit counseling agency.
“If at all possible and you have planned accordingly, you can even use prepaid cards to avoid extra spending on credit altogether,” she says. Just be mindful that you probably still need to carry a credit card for hotel check-in and rental cars.
“You can even use prepaid cards to avoid extra spending on credit altogether.”
— Katie Ross,
2. Don’t double-pay for rental car insurance.
Speaking of car rentals, the salesclerk at the counter likely will try to pressure you into paying extra for rental insurance. Before you do, find out if you might already be covered, says Ross. “Check to see what kind of car insurance you have. If you’re covered while renting, you don’t need to get the rental car company’s insurance,” she says.
The next call should be to your credit issuer since extra coverage for collision and/or theft on rental cars is one of the many hidden benefits of some accounts (provided you use that card to pay for the rental).
3. Make sure you’re current on payments before you leave home.
Don’t fall into the “out of sight, out of mind” trap when it comes to making sure your bills are paid on time, warns Brady. He suggests running through your list of monthly bills and setting up automated payments in advance. That way, once vacation crunch time and packing creeps up, you’ll be covered.
4. Don’t get slammed with foreign transaction fees.
When deciding which credit card to bring with you overseas, you’ll have to do a little homework to figure out which account is most beneficial for you regarding foreign purchase fees. Some issuers don’t have any at all, while others typically tack on between 1 and 3 percent of the purchase price.
“Also, many European merchants have moved entirely to microchip cards, and no longer take cards with just the traditional magnetic strip,” says Ross. If you’ll be abroad, consider checking to see if your card issuer can send you a chip-and-PIN card to replace your current chip-and-signature one.
5. Keep your card issuer in the loop about travel.
It’s always a good idea to alert your card issuer if you plan to be making charges in other states or countries, says Ross. That’s because many banks — with your best interest in mind — will flag your account if purchase activity seems to be out of the ordinary. The same goes for your debit card, too, says Ross.
“We tend to be more lax over the summer.”
— Mike Brady,
Generosity Wealth Management
A quick call before you go, or submitting a travel notice online via your card’s website if that option is available, will save you the hassle of having to make a call after a transaction is denied.
6. Don’t trust the security of free Wi-Fi.
While complimentary Wi-Fi is a great resort perk, be careful about using it to do your banking or other personal business since it isn’t as secure as your home network. For instance, if you did forget to pay one of your bills or want to keep tabs on your checking account balance, instead of doing it poolside on your mobile device, call the 800-number, says Ross.
Along those lines, don’t leave your mobile devices lying around without password protection. In the few seconds it takes to check on your kids in the pool, someone could grab your phone or tablet, which probably has your credit information stored somewhere. Also, refrain from leaving devices in your room to charge. “A better idea is to use the room safe,” says Brady, for anything valuable or linked to your finances.
7. Don’t let your mailbox fill up.
You know all of those card offers you routinely get in the mail and promptly shred? Letting them pile up for a week while you’re gone is giving potential fraudsters easy access to your identity, says Ross. If you don’t have someone you absolutely trust who can grab your mail daily, call the post office to put a hold on your delivery.
Bottom line: There’s nothing wrong with indulging in some lazy summer days, but when it comes to using credit wisely and protecting your financial information, you have to be diligent 24/7 and 365.
Editor’s Note: This story was originally published June 29, 2015.