4 Reasons Why Looking After Your Credit Score Will Help You Make The Most Of A Sabbatical Traveling The World
Technology making the world smaller hasn’t stopped people from looking to explore more of it. As companies increasingly look for new ways to target the next generation of talent, sabbaticals (or extended breaks) have nudged their way into corporate perks and benefits policies.
They’ve been commonplace in academia for some time. A 2016 survey showed that 85% of 450 universities polled offered paid sabbatical leave; encouraging staff to go and further their research interests off-campus.
By 2019, unpaid sabbaticals were offered by around 15% of employers, with 5% offering at least some payment for the period. Sabbaticals have sometimes been stereotyped as vehicles for curing executive burnout, but they’re becoming increasingly popular amongst younger workers. In the wake of the pandemic period and the necessity of flexible working that brought it, it seems set that employees will continue to value latitude in their workplaces.
However, before embarking on a big trip, it’s prudent to make sure your finances are in order. That goes beyond simply ensuring you have enough to finance your voyage; it extends to ensuring your credit score is as high as it can possibly be.
Before you go
A global tour needs to be planned in advance on many levels. Where are you going? When are you going and how are you getting there? As early as possible, check your credit score in the planning of your trip. If anything seems off, query it.
The last thing you want is something like an accidentally missed payment being dragged out into default while you’re far from home. Checking your score counts as a ‘soft inquiry and will have no effect on its number. ‘Hard inquiries’ occur when one is applying for a product, such as a loan or a card, and can ultimately have an impact.
This guide to soft and hard credit checks goes into great depth about scenarios with credit checking. So, let’s cover some applicable to sabbaticals from the aforementioned guide.
Planning
When traveling the world, airlines will almost always be involved. Many airlines have associated credit cards that offer perks such as air miles, reduced rates on baggage check-in, and sometimes travel insurance. It can pay to work out which may be useful and apply for them in advance.
Lenders don’t typically like to see too many applications in a short period of time, which can lead to applications declining, and credit scores being dinged, so spread them out. Hotel groups increasingly have the same, with benefits like free breakfast or room upgrades.
Even the most ardent backpacker will appreciate the odd night of luxury on a long voyage! If one is looking to take in nations where street markets and remote locations mean cash is still king, some bank accounts offer zero or minimal fees for foreign ATM withdrawals. Check the conditions for opening one.
On the road
Even though you may not be in your home country, your responsibilities still are. Make sure you have autopayments going to your (potentially new) cards as missed payments impact your score the same whether you’re in Plymouth, Massachusetts, or Plymouth, England at the time (and a card being declined at dinner will be equally embarrassing in both).
Spread spending around different cards – lenders and credit agencies will take a dim view of cards being maxed out and are more comfortable with the load being spread around as a lesser percentage of the limit on multiple cards. Make sure you have enough available limit on whichever card you use to cover holds – while hotels may only hold around $50-$200 per night over the room tariff, car rental companies can hold up to 25% over and above your rental rate.
For circumstances where a long car journey is involved – say a great American road trip or a ute journey through the Australian bush – that can be substantial. Do check your credit score online from time to time, and as at home, scrutinize anything that seems untoward.
Bear in mind checking your credit won’t affect your score, and will only log an inquiry with the bureau you use, so you can flit between Equifax, Experian, and TransUnion if you’re ultra-conscious.
Global travel is one of life’s great experiences, and many will jump at the chance if it’s presented. Taking some time around your credit arrangements pays off dividends in being able to enjoy the time without worrying about notices piling up behind the door at home.
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