How to Pay for a Trip in Installments

The cost of a vacation can run into the thousands for just one person. According to a recent CIBC poll, Canadians spend an average of $2,665 on their spring breaks. Almost half of said respondents stay local, demonstrating how steep dining, transportation and accommodations can be.
Understandably, not everyone wants to fork over a large sum at once. For this reason, many travellers seek vacation installment plans. While there are options for spreading vacation costs over time, some only add to the bill.
Personal Lines of Credit or Credit Cards
Credit card interest rates range from 13 to 23 percent. Over a 12-month period, that can add nearly $200 to the final cost! Let’s break this down: assuming you make a small deposit, a $2000 trip still comes to $166 per month. With interest, the payment is more like $187 or $205. As the balance dwindles, so will the interest, but it still pads the payments heftily each month.
Personal lines of credit offer lower interests rates, but they suit investments better (i.e. real estate or vehicles). Although the interest is less than half that of a credit card, you still pay more than the cost of the trip over time.
Just because the funds are available does not mean you must maximize them either. Loans often exceed $10,000—more than the average credit card. It’s best to rely on credit when you have the cash but would prefer a security blanket by not dropping it all at once.