For the experienced frugal traveler, the relationship between flying around the world at a low overall price and good credit is critical. Through having a strong credit score and managing balances, travelers may qualify themselves for the best credit cards and sign-up bonuses, resulting in plenty of options to see the world.
However, a growing problem remains on the horizon for those who want to take up our hobby. More consumers are facing difficulty in understanding their credit score and how it can ultimately result in better travel experiences around the world – from United Polaris, to KLM World Business, to even the Singapore Suites.
In the seventh annual Credit Score Survey, commissioned by the Consumer Federation of America and VantageScore, we learned that while more people have access to their credit score, but do not necessarily understand all of the factors that can affect it. For instance, many consumer did not understand that their credit score has bigger implications than just credit cards: less than two-thirds of those surveyed did not know that cell phone providers and electric utilities used credit scores to make service decisions.
To make things worse, credit score knowledge was directly tied to household income levels across the United Sates. While 73 percent of those in households that earn more than $100,000 correctly identified three ways to increase a credit score, those at lower income levels were not as strong in identifying ways to improve their position in life. Moreover, many of those same consumer did not understand how a low credit score could hurt them over time, including obtaining a score from all three credit bureaus and that credit scores represent risk in loan repayment.
On the positive side, more consumers are now working to better understand their personal relationship with their credit. In the past year, over half of consumers accessed their credit score at least once, while many could identify the costs of a low credit score. Perhaps there is some hope, after all.
So what does this all mean for the new frugal traveler? How does this study correlate to seeing the world at a low overall price? For those starting off in the game, this “state of consumer knowledge” review offers three easy tips anyone can follow to start seeing the world cheap:
Understand your credit score: Before beginning to apply for credit cards and earning miles through creative means, the first step is to understand your credit score to begin with. Those considering entering the points and miles hobby need to not only understand what their score is, but how it translates to lenders. Higher scores open up more opportunities, while lower scores require work before the application process begins.
Take steps to improve your credit score: So you may have a low credit score. That’s okay – much like everything in life, credit scores are flexible and can be improved. By working to increase credit scores by paying down high balances and paying all bills on time, every traveler can earn their way into bigger points-earning opportunities.
Start slow and build into bigger deals: For those who are just starting out, it may not make the most sense to start with the biggest deals today. Instead, begin building a credit score slowly, and work up towards the bigger deals in life. Cards like the The Amex EveryDay® Credit Card from American Express or the Citi ThankYou® Preferred Card offer no annual fee and a great introduction point to build a relationship with a bank, resulting in a potentially higher credit score and a jump-off point for even more miles.
Although points and miles may be difficult to understand, those who take the time to gain their knowledge can ultimately become masters of their adventures. With some reading and financial literacy, anyone can see the world for free!
How have you taken control of your credit over time? Share your tips in the comments below!
Written by Frugal Travel Guy @ http://www.frugaltravelguy.com
Written by Frugal Travel Guy @ http://www.frugaltravelguy.com