Advertiser Disclosure

Credit Cards, News, Pay Down My Debt

Here’s What Really Happens When You Miss a Credit Card Payment

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

iStock

Your phone rings — and rings, and rings some more. You know who’s calling. You know what the caller wants, too, but you can’t afford to give the money you owe on your credit cards. So, you let the debt collector leave a voicemail you have no intention of returning.

That’s the wrong way to deal with delinquent credit card debt, says Michaela Harper, debt counselor and director of the Community Education for Credit Advisors Foundation in Omaha, Neb.

“Don’t be afraid to talk to your creditor,” says Harper. “Avoiding them makes the problem worse because it sends it onto the next division” and brings your debt closer to being charged-off, which Harper says consumers with past-due debt should do their best to avoid. (More on that later.)

Credit card debts — or most debts for that matter — become delinquent the moment you miss a first payment. The events that follow the missed payment depend on how long the past-due debt goes unpaid. It begins with friendly reminder calls from the bank to pay your credit card bill, and can culminate in losing up to 25 percent of your annual income to wage garnishment.

The portion of consumers missing credit card payments has been on the rise since the lowest levels of delinquent credit card debt ever recorded were reached two years ago. About 2.47 percent of credit card loans made by commercial banks were delinquent in the second quarter of 2017, according to Aug. 23 figures from the Federal Reserve Economic Database.

Below is a timeline chronicling what happens when you miss a credit card payment, as well as tips from debt management experts on what you can do to mitigate the situation at each point. (You can jump to a specific time period by clicking on the milestones below.)

Zero to 30 days past due: Missed a payment

After you miss your first payment, your debt is delinquent and the clock starts ticking. Your bank should begin to contact you to remind you to make a payment. You are also likely to incur a late fee.

The first 30 days will sound more like courtesy calls, says Randy Williams, president and CEO of A Debt Coach. In reality, the bank is trying to verify your address and personal information to update the system in case your debt becomes more delinquent. (Williams used to work as a bill collector before switching over to debt consulting.)

What you can do

At this point, the bank’s agents may be more willing to provide customer service, so you can ask for an extension or create a payment arrangement to address the past-due debt before the missed payment begins to impact your credit report, which can be as early as 30 days past due. You may also try your luck at asking if the bank could waive any late fees already incurred, although the creditor is not obligated to extend this courtesy.

There’s only so much leeway a bank will give you, says Gordon Oliver, a certified debt management professional at Cambridge Credit Counseling. If you’ve asked for a late payment or interest charge to be waived in the past, you won’t have much leverage.

“There will be different reasons why a creditor may not extend those benefits at the time, but usually those terms are for borrowers who are in better standing,” Oliver adds.

30 to 90 days past due: Collection calls begin

Over the 30- to 60-day delinquency period, the bank will attempt to reach you to collect the past-due amount on your credit card bill.

“This is when they are trying to figure out what’s wrong. They are trying to collect the money,” says Williams.

“At this point it’s starting to affect your credit,” says Williams. He says the robo-collection calls may come as often as every 15 minutes. Borrowers with higher credit scores are likely to see a bigger drop than borrowers with lower scores. According to FICO data, for example, a 30-day late payment could bring a 680 credit score down 10 to 30 points and a 780 score down 25 to 45 points.

In addition to seeing your credit score drop, you will be charged late fees on the past-due account. After you have owed debt for two payment cycles, the CARD Act allows creditors to flag you in their system as a “high-risk” borrower, which means the interest you currently pay will rise to whatever the bank charges for customers at a high-risk status. That number varies from bank to bank but in some cases can get as high as 29.99 percent. The rate will stay that high at least until you have made six consecutive on-time payments, at which point the bank is required by law to reset the rate.

However, “the law doesn’t say they have to do it on their own,” says Harper. So, you will likely need to request a reset. You can find the APR charged to high-risk borrowers in your credit card terms.

What you can do

Harper says if you respond at this point, the bank may ask you to negotiate a payment arrangement.

“Never make a promise to pay that you can’t keep just to get someone off the phone,” says Harper. “If you are silent, you agree to the payment.”

Missing promised payments also gives the bank more leverage if the bill eventually goes to court, says Harper. “If they walk into court and they can point to all of the promised payments, it undermines your credibility.”

Harper advises debtors to be very clear if they cannot meet the bank’s proposed payment arrangements. You need to specifically tell them you cannot make the payments. If possible, take a look at your budget. If you find you are able to send them a small amount every month, tell them.

“That’s a valuable thing because it goes back to when the account charges off. You can slow down your progression toward charge-off by making the partial payments,” says Harper.

A charge-off happens when a creditor believes there is no chance of collecting your past-due debt, so the debt’s considered a loss. The debt gets written off the creditor’s financial statements as a bad debt and sold or transferred to a third-party collection agency or a debt buyer.

“If they feel like it’s a tough situation [you] are going through they will refer [you] to a credit counselor” around the 60- to 90-day mark, says Williams. Again, that benefit may not be extended to all consumers facing financial hardship.

90 to 120 days past due: Bank requests balance in full

After your bill is 90 days overdue, the bank will turn collection over to its internal recovery department to engage in more aggressive collection attempts. Williams says the bank will now be calling for the balance in full, not only the past-due amount.

The bank’s collectors will continue to call, but they may also send you multiple letters every day, or may attempt to reach you via social media, emails or emergency contacts.

Harper says the account may stay with the bank’s internal collections for another 90 days (180 days past due), but it’s important to note that at the 120-day past-due mark, your debt is at risk of getting charged off and being sold to a third-party collection agency.

That’s because the CARD Act states the past-due amount needs to be the equivalent of six months’ worth of your credit card’s minimum payment in order for the debt to be charged off. Including late fees and the amount added in higher interest payments, consumers may reach that figure in as little as four calendar months.

What you can do

If you can’t give them the entire past-due amount or balance in full, take a serious look at your budget. See if there is any room to make even a small payment. If you can find a few dollars, you may be able to enter a repayment plan with the bank, which will at least pause the collection calls. Don’t forget to leverage the collector’s insider knowledge. Explain your situation and ask if you can negotiate a solution with the bank.

“You want to pay off the debt, they want to pay off the debt. They may have solutions they can offer you that you don’t know about,” says Harper.

Once you’ve got an active repayment plan in place, the bank will pull you out of the collection list, Harper says.

120 to 150 days past due: Hardcore collection attempts

Watch your credit report carefully after your account becomes 120 days past due, as it may be charged off at any point. At this point, the collectors will continue to try every channel available to them to get in touch with you and collect on the debt. The attempts may get closer together and collectors may try more aggressive tactics to scare you into paying up.

“One hundred and twenty to 150 days, it is hardcore. Now they are going to offer you a settlement. They will do whatever they want to try and get to you to pay the debt off. It’s basically motivation to get you to pay now,” says Williams.

Debt collectors at this point may also take time to remind you of your rights under the CARD Act and Fair Debt Collection Practices Act as well as their right to collect on the past-due debt.

The bank’s collectors may not directly say they will proceed with legal action or wage garnishment if they do not intend to, as that is illegal under the FDCPA, but they may remind you of those possibilities if you do not pay and emphasize the bank’s right to collect on the debt owed to them, Williams says.

Williams adds, “They never say they are going to sue you; they say, ‘We have the right to protect our asset.’”

What you can do

Williams says at this point the debtor essentially has three options. Bring the account current by paying the entire past-due amount, arrange a debt settlement plan with the bank or try going to a credit counselor to create a debt consolidation plan.

“Near 120 days past due, they need to get some form of help to remedy the account before it goes to a charge off,” says Oliver, who adds that the timing the charge off will be difficult to predict.

For those who may be behind on several bills, Oliver also recommends getting some form of financial counseling to create a plan that addresses all your financial issues.

150 to 180 days past due: Last chance

At 150 days, collections efforts will remain aggressive and may even increase in frequency as the bank is now concerned about losing the debt to a charge-off.

Once your credit card payment is 150 days past due, you may start to hear the bank’s agents’ tactics shift as they may make a last-ditch effort to recover the debt, according to Williams.

What you can do

You will still have the options to pay the balance in full or reach a settlement with the bank, but you may have an additional option: Re-age your debt.

When your account is past due and you enter a re-age program, the late payments and collection activity are removed from your account. As a result, “your credit score may improve by 10 to 15 points if not growing every month from there,” according to Williams.

You will generally be asked to make at least three on-time payments on the debt before your account is re-aged. For example, the bank could ask you to pay $100 each month for three months before bringing your account back up to a current standing, but the bank will add the interest and fees you’ve already incurred to the total amount you owe. After the account is re-aged, you’ll go back to making minimum payments on the total amount of debt outstanding. Re-aging the account may also remove the “high-risk” stain from the account so your interest rate drops to to whatever it was before.

Williams says a re-age can be seen as a win-win for both parties: You are able to catch up on your delinquent debt and — in some cases — have its impact removed from your credit report, and the bank is able to recover the interest and fees that have accumulated since your account became delinquent.

Of course, the credit card company doesn’t have to allow you to re-age the debt and may not offer the option to you, but there is a possibility it will do so if you ask. Keep in mind you are only allowed to re-age an account once in 12 months and twice within five years, per federal policy, and re-aging is only an option on accounts that have been open for nine months or longer. Credit card issuers are allowed to set more strict re-aging rules for its accounts, as well.

After 180 days: Charged off to a third party

When you are about six months past due, it is extremely likely the bank will charge off your account and sell the debt to a third-party collection agency. If the bank does not charge off your account, it may take the matter to court.

If it goes to collection, third-party debt collectors may employ some of the same tactics the bank’s collectors did. Most collection agencies will push hard for the first 90 days, then at the end of that point in time they may decide to sue you, Harper says. Or they may sell your debt to another collections agency.

The third-party collectors will attempt to contact you using every channel available to them for the next 90 days or so, before they must decide to either charge off the debt or sue you. The collectors will likely demand you pay the full balance or ask you pay the balance in thirds, says Harper. If they can’t get a hold of you or get you to arrange a payment plan in that time, they may decide to turn it over to an attorney.

What you can do

You should try the same tactics that you would have used with the bank’s internal collections agency with the third-party agency, negotiating the price down and reaching a settlement with the third-party collector. If you don’t respond to the collection requests, you may be sued.

You may not be sued for some time. Companies can only sue you for unpaid debts within a certain period of time, called a statute of limitations — anywhere within three to 10 years, according to your state’s law. Your debt may be sold and resold several times before that happens. Check with the office of consumer protection at your state’s attorney general to find out what the rules are in your state.

If you are served with a lawsuit, you should check the letterhead to make sure the attorney or company filing the suit on behalf of the collections agency is licensed to practice law in your jurisdiction, says Harper, as you cannot legally be sued for credit card debt by an attorney outside your jurisdiction.

You should also be sure to respond to the lawsuit. If you don’t, you’ll likely lose. The court can automatically side with the lender if you don’t show up in court, also known as a default judgment. That may result in getting your wages or federal benefits garnished to pay the debt, not to mention the credit damage a judgment causes. Federal law states a creditor can garnish no more than 25 percent of your disposable income, or the amount that your income exceeds 30 times the federal minimum wage, whichever is less.

If you can’t afford to settle

If, given your current financial situation, the debt is unmanageable for you and you are not able to settle the account, you may want to consider bankruptcy. But you will have to file before a judgment is entered against you in court, which may be tricky to time, Harper says.

Given the difficulty in timing when the creditor will take your account to suit, you shouldn’t wait if you think bankruptcy is an option for you. Read here for more information on how and when to file for bankruptcy.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

TAGS: , , ,

Advertiser Disclosure

News

6 Budget-Friendly Places to Put On Your 2019 Travel List – Domestic Edition

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

iStock

If one of your resolutions for 2019 is to travel more, but you fear that finances will hold you back, have a little hope: there are plenty of destinations across the country that are still very affordable to visit. As fun as major tourist destinations like San Francisco and New York City are, let’s be honest — accommodation alone can cost a fortune.

When you’re on a tight budget, it’s easier to make travel a reality when you choose lesser-known locations where the cost of activities and lodging are still reasonable. If you’re willing to make a budget in advance to ensure you’re regularly setting aside money for travel, you’ll be able to hit the road even sooner.

Another way to make vacations more affordable is to get a travel credit card, said Deidre Mathis, a budget travel expert and writer, and owner of Wanderstay Hostel in Houston. If you get a travel rewards card and use it for your everyday purchases, such as gas, your car payment or groceries, and pay it off right away, you’ll quickly earn points without accruing any debt. Depending on the card you choose, you could earn free hotel stays, free car rentals or free flights.

Now you just need to figure out where to go. We spoke to several budget travel experts to find out the best places in the U.S. you can cheaply travel to in 2019. Here are their six top destinations that are still somewhat off-the-beaten-path and won’t break the bank. (All hotel prices are from Kayak.com and accurate at the time of publication.)

iStock

Albuquerque, New Mexico  

Cost of accommodations: Throughout the year, you can get a three-star hotel room for about $85 to $100. If you’re willing to stay at a one- or two-star motel, you can nab a room for around $40 to $50 per night.

Why go: Albuquerque is one of the top spots Mathis said she’s eyeing for 2019, in large part because it’s such a friendly spot for budget travelers. It’s also known for its distinct Southwestern feel and sunny weather. If you love the outdoors, Albuquerque is brimming with scenic hiking and bike trails that range in cost from free to only about $20 to use, making it an affordable way to explore the beautiful terrain.

There are also several museums in Albuquerque, and plenty of shopping if you’re on the hunt for Southwestern-style art, jewelry or souvenirs. Just west of the city, you’ll find the Petroglyph National Monument, where you can view ancient lava flows, petrified wood and rock drawings by Native Americans and Spanish settlers, dating back as far as 700 years ago. It’s free to enter, and parking is only $1 on weekdays and $2 on weekends.

It’s also typically affordable to fly into and stay in Albuquerque — according to Mathis, “they have tons of small hotels that will be a better price than the big chain hotels, and they give you a more local feel,” Southwest offers nonstop flights from many cities to Albuquerque, she added; for example, she recently saw nonstop flights in February from Houston to Albuquerque for $250, which she says is a great deal.

“To me, a budget trip is anywhere I can go for less than $500 with flight and hotel included for the weekend,” Mathis said, “and with Albuquerque, you can definitely do that.”

iStock

Bloomington, Indiana

Cost of accommodations: A three-star hotel room is available for as low as about $80 per night, while some two-star motels offer rooms as cheap as about $50 per night.

Why go: “I have a passion for college towns — I find they often are more progressive and innovative than their larger neighbors — and Bloomington is one that makes me swoon,” said Kristin Luna, a budget-minded travel journalist and founder of the travel blog CamelsandChocolate.com. Not to be confused with Bloomington, Ill., this town is about an hour’s drive from Indianapolis, which is typically the cheapest airport to fly into, according to Luna.

“It’s also located in proximity to so many great outdoor attractions such as Monroe Lake, Amy Weingartner Branigin Peninsula Preserve and Hoosier National Forest,” Luna explained.  “Another free and unique offering is the Tibetan Mongolian Buddhist Cultural Center, which was started in Bloomington in 1979 by an exile named Thubten Jigme Norbu, to protect the heritage of Buddhism,” she added.

Luna also noted that since it’s a college town, Bloomington has plenty of seasonal activities, such as Indiana University football in the fall or the city’s long-standing Little 500 bike race in the spring. She added that Bloomington has an ever-expanding greenway called “the B-line” that cuts through town and is extremely bike-friendly, though the town is also easy to navigate with the newly-popular electric scooters.

iStock

Fargo, North Dakota

Cost of accommodations: It’s possible to grab a two-star motel room in Fargo for less than $50 per night. The average nightly rate for a three-star hotel here is around $90.

Why go: Fargo may be famous for the Coen Brothers’ cult classic film, but it’s also a great up-and-coming destination for budget travelers seeking something off the beaten path. Mathis said North Dakota is on Mathis’ radar for next year, and it’s especially an ideal destination for travelers who love nature. North Dakota has ample opportunities for hiking, biking, boating, camping, fishing, horseback riding and just about any other outdoor activity you can think of.

Fargo and many other towns in North Dakota are also known for charming small-town bars, where you can get a true feel for the city, noted Mathis. There are also a few small breweries in Fargo, in addition to great shopping.

The town also has cultural institutions, including art museums, an air museum and a historic theater. A few minutes away, just across the river and the Minnesota border, you can visit the Hjemkomst Center for only $10, where you can see a replica of a viking ship and a “Stave Church,” a replica of a Norwegian church from the 1100s. And of course, you can see the infamous wood chipper from “Fargo” the movie; it’s free to see the original movie prop, located in the city’s visitor center.

Fargo is growing, but it’s still not a well-known tourist destination, Mathis noted, so it’s affordable, uncrowded, and still feels very authentic.

iStock

Knoxville, Tennessee

Cost of accommodations: Budget travelers can find two-star motels in Knoxville for as low as around $50 per night, and three-star hotel rooms for around $80 per night.

Why go: “I grew up just south of Nashville, but if we’re being honest, I would live in Knoxville if I had the choice,” Luna said. “Like many mid-sized cities across the United States, it has a booming brew scene, a dedication to the arts and a sprawling town square that has been completely revitalized from when I was a student there 15 years ago and almost all the storefronts were boarded up.”

As Luna noted, The Old City, Fourth & Gill and Market Square neighborhoods have all undergone major makeovers, which has brought life and investment into these areas. But despite its growth, Knoxville is still a very affordable place to visit.

“Free attractions such as Ijams Nature Center and its quarries, and many hiking and mountain-biking trails connecting to the nearby Smokies, make Knoxville a popular destination among budget travelers who like adventure,” Luna explained. She added that whiskey lovers will enjoy that two Tennessee Whiskey Trail stops are located in downtown Knoxville (Knox Whiskey Works and Post Modern Spirits), and there are several others only a half-hour drive away.

Knoxville also has plenty of museums, memorials and parks that cost nothing to visit. There are also many walking and driving tours that are also totally free — you can take a walking tour to learn about country music, a driving tour to learn about the civil war and much more.

iStock

Oklahoma City, Oklahoma

Cost of accommodations: You can get a motel room for as little as $30 to $45 per night in Oklahoma City. If you’re looking for a step up, three-star hotels average just under $100 per night, but can be as little as about $45.

Why go: As a centrally-located city, flights from hubs like Dallas or Denver to Oklahoma City are cheap, according to Luna. Plus, she added, as a mid-sized metropolis, Luna has found there’s virtually no traffic, and boutique hotels and parking that won’t break the bank.

“The food and drink scene is positively booming — Bon Appetit even picked America’s best new restaurant of the year from OKC,” Luna said. “In fact, one of the nation’s first brewery hotels is set to debut in 2020.” She added that a new streetcar launched in the city in December, which makes it really convenient for tourists to get around town. The city has also spearheaded other improvement projects, noted Luna, such as “the Boathouse District, an amazing attraction for visitors that includes an urban whitewater rafting course, canoeing and kayaking on the river, ziplining and a whole lot more.” On top of that, she has noticed that the locals there are some of the friendliest, most hospitable folks she’s ever met.

Another popular area in Oklahoma City is Bricktown, a fun entertainment district where old warehouses have been turned into restaurants, shops, piano lounges and wine bars. There’s even a water taxi that can take you on a tour along the Bricktown Canal.

iStock

Oxford, Mississippi

Cost of accommodations: You can land a three-star hotel for around $90 per night, or one- and two-star hotel and motel options for only $45 to $75.

Why go: “While many people have a negative connotation about Mississippi — and yes, it’s a little complicated politically — I think it’s one of the most underrated and underappreciated states,” said Matt Kepnes, who writes the popular budget travel blog Nomadic Matt and authored the book “How to Travel the World on $50 a Day.”.

According to Kepnes, the state is rife with rich history, the people are friendly and the Southern food is fantastic. Oxford is home to the campus of the University of Mississippi (known as “Ole Miss”), described by Kepnes as a beautiful (and free) place to explore. Right across from campus is Rowan Oak, former home of famed writer William Faulkner, which costs only $5 to visit.

If you want to take a road trip across the state, there’s plenty to see, according to Kepnes — and it’s all easy on a budget. A trip through the Mississippi Delta delivers a journey through incredible blues music, and he noted that it’s also worth a stop in the beautiful city of Natchez. Kepnes also loves the coastal town of Biloxi, which has great seafood, a beautiful beach and many casinos with very affordable hotel rooms. The Natchez Trace Parkway, a historic national park trail that goes up through Mississippi, is also worth a visit. It’s 444 miles long — it also passes through Alabama and into Tennessee, ending close to Nashville — and takes you along gorgeous drives.

“I was really surprised by how much I enjoyed Mississippi,” Kepnes said. “I know some other travel writers who didn’t want to go, but once they did, they were surprised by how much they liked it.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Emily Starbuck Gerson
Emily Starbuck Gerson |

Emily Starbuck Gerson is a writer at MagnifyMoney. You can email Emily here

TAGS:

Advertiser Disclosure

News

6 Budget-Friendly Places to Put On Your 2019 Travel List – International Edition

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

best airline credit cards
iStock

Do you have dreams of collecting passport stamps but fear international travel is beyond your budget? You might be surprised what you can afford with some smart strategies.

If you’re willing to spend time budgeting and saving, stay in hostels and visit destinations that are off the beaten path — and therefore less expensive — it’s easy to travel internationally on a shoestring.

Another way to lesson the cost of travel is to regularly use travel credit cards. Deidre Mathis, a budget travel expert and writer, and owner of Wanderstay Hostel in Houston, said she uses her Delta credit card for everyday essentials, then pays it off right away. “I was able accumulate enough points to book a flight to go to Spain next year for free. This was just from using my credit card to pay for things I would have bought anyway,” Mathis said.

“Of course, if there’s an annual fee, you have to look into it and see if it makes sense,” Mathis explained. “For this card, it does make sense, because a normal flight to Spain from Houston can range from $900 to $1400, so an annual fee of $200 is totally worth it because I got the free flight.” If a long-haul flight is your main budgetary concern, racking up points on a travel credit card could be your ticket to ride. Plus, many travel credit cards offer huge sign-up bonuses that start you off with a large balance of reward points.

Now, where to go with all those points? We interviewed several budget travel experts to find out which countries are best for budget travelers. If you’re resolved to travel more in 2019, here are six of the most interesting and affordable spots around the globe. (All hostel prices come from Hostelworld.com, are presented in U.S. dollars and are accurate at time of publication.)

iStock

Argentina

Cost of accommodations: The average price for a night at a hostel in Buenos Aires is an affordable $17.47. The average price of hostels in most other cities are only $10 to $20 per night, though there are some outliers, like Cordoba at $9.67 or El Calafate at $51.09.

Why go: “There’s never been a better time to visit Argentina,” said Johnny Ward, an entrepreneur who runs the hugely successful travel blog OneStep4Ward. Originally from Ireland, Ward currently lives in Thailand, and through savvy budget traveling, has visited every country on earth (seriously, he’s been to all 197). “Unfortunately, their economy is struggling a touch, but that means it’s a very cheap time to visit and explore,” Ward said.

He adds that long-distance buses in the country are like business class flights, with glasses of Malbec starting around $1 a pop. With a great bus system, it’s easy to explore the country, which has vibrant cities like Buenos Aires, in addition to areas of natural wonder, such as Patagonia.

To experience the best of Argentina on a budget, Ward suggests flying in and out of Buenos Aires. “Then, bus up to Iguazu Falls and back to Buenos Aires,” he said, “before getting those hiking boots dusted off and exploring majestic Patagonia, with Bariloche and El Calafate particular highlights.”

iStock

Bulgaria

Cost of accommodations: Of the most popular cities, hostels are cheapest in Sofia, Bulgaria’s capital, with an average price per night of $6.99. Bansko is the most expensive, at an average of $18.82 per night.

Why go: “Bulgaria is not often picked on top travel lists, but it’s a great country for budget travelers because it’s inexpensive and it’s not on the euro,” said Matt Kepnes, blogger behind the popular budget travel blog Nomadic Matt and author of the book “How to Travel the World on $50 a Day.”

According to Kepnes, Bulgaria has plenty of rich history, the beautiful Black Sea, delicious Mediterranean-style cuisine, friendly people and plenty of mountains ideal for hiking. “Plus, it’s sort of off the beaten path, so you won’t find the huge crowds of Prague when you’re going to Sofia,” he added. “And it’s affordable; as a backpacker, you can get by on around $35 a day. If you’re traveling on a slightly larger budget, you can get by pretty comfortably for $50-$60 day doing anything you wanted, eating anything you wanted and staying in an Airbnb or cheap hotel.”

iStock

Iceland

Cost of accommodations: Hostels in Reykjavik are around $84 per night on average, but in most other cities, the average prices are closer to $30 to $50 per night.

Why go: While travel to Iceland has surged in popularity in recent years, it can still be an affordable place to visit if you know how to do it right, Mathis said. Known for its otherworldly landscapes and jaw-dropping geysers, waterfalls and lagoons, it’s the perfect place for outdoors-lovers (and adventurous eaters — fermented shark, anyone?).

Flights are often the greatest expense of an international trip, but not in this case: Mathis recommended looking at WOW Air, a budget airline that offers flights to Iceland from major U.S. cities for as little as $100 to $200 round-trip, on which Mathis was able to score a $200 flight. “Though Iceland isn’t super cheap once you get there, getting there is incredibly cheap, so it gives you more flexibility to use that money for something else,” she explained.

In addition to hostels, Mathis noted that the country has many Airbnbs that help you save money, as compared to a hotel. The other trick to budget travel in Iceland is to avoid public transportation, which is very expensive — “just rent a car and drive that for the time there, and you’ll save a lot of money on transportation,” she recommended.

iStock

Macedonia

Cost of accommodations: In six of the most popular cities in Macedonia, hostels range from an average of only $7 to $17 per night.

Why go: “France, Italy and Germany are all a little played out — head east, save a fortune and explore Macedonia,” Ward recommended, noting that you can easily get meals for $7 in the country.

He said the country’s capital, Skopje, is idyllic, with Old European architecture and boutique hotels for a fraction of the price of Western Europe. Skopje is home to the Old Bazaar, a great place to shop and find cheap eats. The city is also home to the Memorial House of Mother Theresa, who was born there — the house is on the site of the former church where she was baptized.

“Then head to Lake Ohrid for a truly relaxing time,” Ward added. “The water is clearer than you imagine, and there won’t be hordes of tourists, I can promise you that!”

The Lake Ohrid region has been named a world heritage site by UNESCO, and the charming town of Ohrid is the location of one of Europe’s oldest human settlements. The area has the oldest Slav monastery, built starting in the 7th century, and hundreds of Byzantine-style icons from the 11th to 14th centuries.

iStock

The Philippines

Cost of accommodations: You can score a hostel bed in Manila for an average price of $9.08. Hostels in other cities range from a mere $6 to $14 per night.

Why go: “South East Asia draws in so many tourists, but most don’t make it beyond Thailand or Vietnam,” said Ward. “For an additional hour or so you can explore the Philippines — all 7,000 islands of it!” Domestic flights within the Philippines can be as cheap as $40, he added, “so you can island-hop until your heart’s content.”

Ward thinks Manila, the capital, isn’t much to write home about, but from there, you can take a short, cheap flight to the “World’s Most Beautiful Island” of Palawan. From there, he recommended, “head north to El Nido and Coron for the kind of blue seas and limestone cliffs you’ve used as a screensaver for years.” According to Ward, you can nab some delicious street food and a cold beer for about $2, and if you get a cheap hotel on the beach, you can get away with only having to spend $30 to $50 per day.

iStock

South Korea

Cost of accommodations: In Seoul, the average price of a night at a hostel is only $15.68. In other popular cities, the average prices range from a mere $14 to $21 per night.

Why go: According to Kepnes, so many travelers get excited about Japan, but they often overlook South Korea: “South Korea is an underrated place,” he  explained. “Not a lot of people go there, but it’s fascinating.”

He pointed to the incredible Korean food, rich history, excellent museums, beautiful palaces, K-pop music and the booming tech scene. Plus, if you’re a history and politics buff, you can take a guided half-day tour of the The Demilitarized Zone — the infamous border between South and North Korea — for as little as $40.

Kepnes is especially a fan of Seoul, which he described as an affordable city that many people miss out on.

“It’s like a cheap Tokyo,” he explained. “You could go out there and go eat Korean BBQ and drink to your heart’s content, and then pay only $10.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Emily Starbuck Gerson
Emily Starbuck Gerson |

Emily Starbuck Gerson is a writer at MagnifyMoney. You can email Emily here

TAGS: