Cruising to Bankruptcy?

| August 13, 2008

In these tough economic times, using your credit to pay for a cruise could be a big mistake. Sage financial advice from our CruiseMates readers.

CruiseMates' Reader Recommendations One financially responsible member commented that he hadn't been on a cruise for the past eight years because his financial circumstances hadn't allowed it. Happily, his situation has improved and he is once again planning a cruise.

A smart Cruisemates contributor said he uses his cruise line's credit card to book all of his cruises. Then when he receives his monthly credit card bill, he pays in full to avoid interest charges. A variation of this would be to save for an impending cruise and once you have the money in the bank, select your cruise and charge the down payment to your cruise line credit card; then when the statement comes, pay it immediately. Next, charge the final bill to your cruise line credit card and pay that bill in full immediately. This way you could quickly earn perks and benefits similar to those frequent fliers use to build up their air miles.

Remember that onboard charges can really slam your budget. It can be traumatic for a person with a restricted vacation or leisure time budget to save for two or three years for their first cruise, only to discover prior to disembarking that their onboard account has approached what they paid for their cruise. And it's so unnecessary.

If you have never cruised, be sure to keep daily track of your onboard expenses, something you can often do from your in-room TV. If you didn't know how much items like sodas, juices and alcohol are costing you, you will find out soon enough when you are presented with a "sign and sail" charge slip to sign. Another danger spot is the casino, since many cruise ships allow guests to play on credit up to a generous daily limit until the very last day of the cruise. Keep track daily of any expenses there as well, for gambling expenses can build up quickly.

Persons with even one cruise under their belts can and should use their last cruise's on-board expense record as a guide, making sure to build in cost increases, especially if it has been a few years since their previous cruise. The CruiseMates message boards are full of ideas on how to save money onboard and in port. Take advantage of free meals to avoid expensive restaurants in foreign lands. Purchase a drink package for your cabin, which comes with a bottle of spirits and mixers for one price, rather than paying for drinks by the glass. Some cruisers even set up their onboard account with a limited amount of credit, which requires the cruise line to notify the guests before they go over the limit.

Any way you slice it, cruising expenses usually go far beyond just the price of the cruise. And remember that the cost of traveling to and from your cruise often makes up a significant part of your total cruise budget. Consider avoiding a significant airline expense (especially if the entire family is cruising) by selecting a cruise from a port within driving distance. Even a night's hotel/motel expense each way and the cost of gasoline may be far less than airfare.

Keeping Your Cruises Affordable Americans think of vacations as a necessity, not a luxury. We take far less time off work than most other industrialized nations. Some European countries let employees take as much as six weeks of paid vacation. Financially strapped Americans may cut back on their precious vacations but they certainly don't plan on giving them up. Cruise lines are doing everything they can to attract passengers, including keeping cruise fares as low as possible in the face of rising energy costs. Most of us know how to practice responsible financial behavior, but there will always be some people who have a hard time seeing the consequences of bad financial decisions.

Pick your cruises wisely, add in all of the ancillary expenses, and budget your onboard costs before you set sail. You might be amazed to find that cruises remain one of the most cost effective vacation options available.

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