5 Credit Card Mistakes To Avoid This Summer Before They Cost You Hundreds
The great poet Will Smith might have sung that “summer, summer, summertime” was the “time to sit back and unwind,” but many people aren’t taking his advice. Instead, they’re out spending money on their credit cards while making some common — and costly — mistakes.
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To help you truly sit back and unwind without potentially overspending hundreds of dollars, MoneyLion talked to experts about the credit card mistakes to avoid this season.
1. Charging a Vacation You’ll ‘Pay Back Later’
Does that vacation package you saw on TikTok look amazing? Yes. Can you really afford it? Maybe not. Should you charge it on your card anyway because you’ll figure out how to pay for it later? Absolutely not, according to Hillary Seiler, founder and CEO of Financial Footwork.
If you can’t afford your dream vacation now, don’t charge it. Seiler said people often get so excited about a getaway that they forget they’ll be on the hook for fees that add up quickly.
“[They forget] baggage and resort fees, ride-share surge pricing, foreign transaction fees and interest charges from carrying balances,” Seiler said. “Most people budget for the trip but leave out the little costs that add up.”
2. Not Getting a Card for International Travel
Even if you can afford that international excursion, Seiler warned that neglecting to get a card suitable for international travel can cost you in foreign transaction fees.
“Another big-ticket credit card killer is ignoring foreign transaction fees when you are out of the country,” Seiler said. “If you don’t have the right credit card to travel internationally, you need to get one before you leave.”
These fees typically range from about 1% to 3% of each purchase, which can quickly add up over the course of a trip.
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3. Treating Rewards Like ‘Free Money’
Who doesn’t love getting a reward? However, Seiler cautioned that thinking of credit card rewards as “free money” comes with considerable risk. Remember: Rewards only work in your favor if you pay your balance in full every month.
“Interest charges can wipe out years of points and cash-back value if you let it get out of hand,” Seiler said.
When does it stop making sense to keep chasing credit card rewards? Seiler said “discipline matters more than points.”
She added that as soon as you carry a balance, pay annual fees for perks you’re not using or accelerate your spending to earn points, the math stops working in your favor.
4. Relying on Promotional Financing
Summer is known for more than cookouts and beach getaways. It’s also a time when many retailers trot out promotional financing or buy now, pay later deals.
Chunking a purchase into smaller payments may feel more manageable emotionally, but Ashley Morgan, attorney and owner of Ashley F. Morgan Law PC, explained that it also lulls people into thinking about the payment — not the total cost.
“Multiple smaller payments across different financing platforms can quietly stack up until large portions of future income are already committed,” Morgan said. “These short-term financing agreements will result in you paying for your summer expenses well into the fall.”
Fall should be devoted to a different kind of spooky season — not dreading bills from the summer.
5. Thinking of Summer as Different From the Rest of the Year
It’s easy to go into “vacation mode” when the days get longer and hotter. Still, Morgan warned that when this summer mentality slips into your spending habits, you could rack up more credit card debt than you realize.
She’s seen people treat summer spending differently from the rest of the year, in no small part because so many expenses come up at once: vacations, summer camps, changes in childcare, weddings, concerts, travel to see family and home projects, to name a few.
“Individually, the expenses often do not feel unreasonable,” Morgan said. “But collectively, summer spending can quietly overwhelm a budget.”
You’re better off being vigilant about your spending this summer and learning to say no instead of going into credit card debt.
The Bottom Line
To truly sit back and unwind this summer, you don’t want to make common errors with your credit card. Be mindful of what you’re charging, don’t chase points for the sake of rewards you can’t really use, and make sure you have the right card for international travel.
Showing some care and caution should keep your summer livin’ — and spending — nice and easy.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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