Destinations
This is a guest post by Jordan Smith, a savvy finance enthusiast and travel blogger who loves finding smart ways to make travel more accessible. With a background in personal finance, Jordan shares insights on budgeting and innovative payment options to help readers plan their dream vacations without breaking the bank. When not writing, Jordan enjoys exploring new destinations and trying out local cuisines.
When the frosty winter weather starts to creep in, it becomes increasingly tempting to start planning an escape to warmer, brighter climates. The appeal of sunbathing on golden sands is only heightened by the rain pouring down the windows at home, which is why it’s no surprise that January is typically the most popular month for booking a break.
But with this time of year also characterized by lack of money thanks to seasonal holidays such as Christmas, many people seek payment alternatives in order to fund their travels. Traditional credit cards, as well as vacation company Buy Now Pay Later schemes are both ways to spread out the cost of your trip and secure your dates with just a small deposit.
But is this type of payment too good to be true, or can it be a practical way to finance your dream break? In this post, we share everything you need to know about Buy Now Pay Later holidays.
Paying this way can give you more freedom
If money is tight, a pay later model can mean that you aren’t held back from booking your holiday dates well in advance. Booking ahead of time can mean you secure cheaper packages, better accommodation or even just better plane seats, so it can be frustrating to miss out on deals but know that you’ll have the money you need in a few months.
In fact, research shows that 62% of Americans believe that delayed payment offers increased flexibility when it comes to vacation planning. As well as spreading the cost, it can also mean you only forfeit a deposit rather than the full amount if your plans change (depending on the terms and conditions).
But it can also encourage impulse spending
Booking a holiday and paying later can feel like working out how to pay for it is tomorrow’s problem – but it’s important to keep your spending in check. You should only commit to things that you can afford, and have a payment plan in mind when you sign. For example, if you’ve put down a deposit and will pay the final amount a month before you fly, put aside a small amount of money each month into a savings account so that you don’t have to scramble to find a large amount out of one paycheck.
Buy now pay later can increase overall costs
If you don’t have to pay for the entirety of your holiday upfront,, you may find that in the long run your total spend creeps up. Without you realizing, you might commit to an upgrade here, an excursion there, and all of a sudden, the total bill is bigger than you initially realized. Whilst this payment method can allow you to splurge on things you couldn’t afford if you needed to pay a huge lump sum, it’s important to set a budget to avoid overspending.
Additionally, Buy Now Pay Later schemes can actually increase costs even if you don’t add extras. When you buy a product, this increases demand, and so companies may charge more to reflect this. Whilst this shouldn’t affect you if you’ve already signed a booking form, it can mean that you’re actually paying more than you should when you look at these sort of deals, thanks to other consumers taking advantage of Buy Now Pay Later finance. Companies that don’t offer this may be cheaper as a result.
The right choice for you
Ultimately, Buy Now Pay Later schemes can offer affordable finance to people who don’t have a lot of money in the bank. However, committing to one should only be done if you’re confident that you can afford to meet your payments without compromising on your other expenses. Plus, it’s still best to compare deals to make sure you’re not paying above the odds for a similar package with another company.
