When travelling should I get out a personal loan?

We get asked this all the time, should I get out a personal loan or credit card for my upcoming trip? The easy answer is no but my past experience is moving me towards a yes/no situation.

Just a quick note: we are not recommending anyone get into debt to travel, if you are old enough to get a loan/credit card you are responsible enough to make the decision on your own.

We personally have never gone on a trip funded on a loan, however we have both easily maxed out credit cards whilst travelling but this was during our 12th month away from home.

When Should I Get A Credit Card or Personal Loan For My Travels?

We have had friends ask us, should I get a credit card for this trip, and if their financial situation allows them to pay it back upon return, they go for it. However, each time we have recommended that it has been for back up, never the essentials and never for spending money.

On three different trips we have had our cards scammed which meant we were reliant on our credit cards while waiting for the bank to return our money (we have had the worst luck with card scammers). Our $3000 spending money for two of us was split into a $1000 credit card. Yes it did limit our spending a lot but at least we could still do our trip.

It’s a nice feeling to know we have a backup in place when things went wrong.


When Not To Get A Credit Card

If you are solely relying on debt to travel then you may need to rethink that trip. Travel is fantastic, but you should never travel to put yourself in a worse situation than you are currently in.

It took me three years to pay back my car loan, it was only $5000 but if that was travel debt it could’ve easily have been an incredible trip in Europe. I couldn’t imagine paying back a trip and limiting my travel for three years for that one 4 week period.

At the end of the day if you return from a trip with debt, there is just a negative strain placed on your trip. 9/10 times I am sure you return home from a holiday and the first thing you want to do is start planning your next one, essentially booking it straight away or with your next pay cheque – which I have done several times.


Steps to prevent debt from travel:

Always pre-pay everything: including your accommodation, flights and activities. This is a rule we used at the start and still do it today. The big one here is your activities, if you know what you want to do, pay for it before you go. Not only does it prevent debt but it’s so much more enjoyable when you arrive at your destination with cash to spend.

Book if you have the money: this one is tough as sales will come and go. However, we have had sales so good that we still had let go because we knew our future finances would not comfortably pay it back to not have debt for the trip.

Save, save save: So obvious, yet so many don’t. There are so many ways to save money for travel.

Pay it back straight away: I know this one contradicts the previous tip but you should always pay your debts back before saving for the next trip.

What do you guys think? Would you ever get a personal loan or credit card out to travel?

Stephen and Jess signoff