Photo happy young couple of travellers holding map in hands

The standard rule of advice about vacation loans is simple: don’t take them out. But when you need a getaway for your mental health, you can overlook this rule, thinking it doesn’t apply to you.

So, YOLO: you go against advice and draw against your line of credit to cover your fun in the sun. When you sit on the beach sipping Mai Tais, using credit can feel like the best decision you’ve ever made. But the reality of your choice comes crashing down when you return home and your first billing statement arrives.

Don’t panic — this article is here to help with advice on how to deal with your line of credit, how to pay it off, and what to do next time.

Focus on Your Minimum

You must cover the minimum payment by the due date. This payment ensures your account doesn’t go into delinquency. You want to avoid delinquencies at all costs because they do a lot of damage to your credit score.

If you can’t afford the minimum, reach out to your lender to see if they have financing programs for people at risk. You can also reach out to a free credit counseling program to get advice.

Pare Down Your Spending

You want to bring your line of credit balance back down to $0 as quickly as possible. The minimum is too slow, so you’re going to have to pour money into your monthly payments.

Where does this money come from? You’re going to have to get used to sacrificing the fun stuff until you pay off your vacation. Freeze any discretionary spending, reducing these expenses to reflect your new debt responsibility.

Look carefully at your usual spending and be prepared to cut any non-essential item or service that ties up your cash: subscription services, meal boxes, takeout and restaurant spending, home renos, etc.

Consider Selling Your Stuff

The reason why you want to pay off your line of credit as quickly as possible is because it accrues interest. The longer you have a balance, the more time you accrue it.

Interest can be serious enough to warrant selling your stuff if you have a high APR. Go through your belongings to see if you have anything worthwhile. If you have something valuable that you don’t use hanging around, selling this item can speed up your debt repayment.

Following this thought process, you should also fold any windfalls into your line of credit. That includes cash gifts, rebates, tax refunds, and winnings.

Next Time, Finance Your Trip Differently

Keep your line of credit on standby in case of an emergency. As for planned vacations, waiting to book your trip is better until you save up what you need. Stretch your budget even more by checking out these tips:

  • Redeeming any travel or rewards points.
  • Planning your trip through aggregated travel search companies to ensure you’re getting the best deals on flights and accommodations.
  • Visit low-cost destinations that have a good currency exchange.
  • Strip back your vacation, staying in hostels, and make your own meals.
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