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Avoid these 7 summer credit mistakes

Boston Globe

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By Dawn Papandrea |June 29, 2015

This summer, whether you're planning a trip or just enjoying some down time at the beach, it's very 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 some common summer money blunders to avoid.

Summer Credit Card Mistakes

  1. Taking 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.” Just be mindful that you probably still need to carry a credit card for hotel check-in and rental cars.

  2. Double-paying for rental car insurance. Speaking of car rentals, the salesperson at the counter will likely 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. Not being 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. Getting 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 one.

  5. Not keeping your card issuer in the loop. 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. 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. Trusting the hotel WiFi too much. While complimentary WiFi 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. It only takes a second of checking on the kids in the pool for someone to 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. Letting 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.

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 24/7/365.

American Consumer Credit Counseling (ACCC) provides non-profit credit counseling, financial education, debt relief consolidation and debt reduction services for consumers nationwide. We offer free credit counseling to help individuals and families learn how to pay down credit card debt and how to eliminate debt altogether. As an alternative to expensive unsecured debt consolidation programs for settling credit card debt, our debt management programs help consumers pay off debts and manage credit card debt more quickly by consolidating payments. We also offer debt negotiation services to help reduce finance charges and interest rates. And our financial education services show consumer how to manage money more effectively and how to get rid of credit card debt more quickly – usually in five years or less.

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