Why is a "reduced deposit" considered a benefit?

[TomTN]

In todays environment of low interest rates(US) I don't see much benefit from a reduced deposit.

 

What am I missing? What circumstances might occur that would make that a benefit? :confused:

[sptrout]

I agree, not much, but it is generally believed that hanging on to your money as long as possible is a good idea. To the other extreme, some may prefer to just bite the bullet and pay 100% up front. If I was a vendor of a product and someone was willing to pay 100% before I had to provide a product, I would be very happy and would provide a discount for that scenario. Everyone has different opinions on how they want to manage their money.

[Project_gal]

I agree. I do not see why reduced deposits are a benefit and I live in the UK where deposits are non-refundable and always book as soon as cruises are released up to two years in advance. I do not book a cruise I have no intention of taking. Why should it matter that you pay some of it up front?

[PORT ROYAL]

In todays environment of low interest rates(US) I don't see much benefit from a reduced deposit.

 

What am I missing? What circumstances might occur that would make that a benefit? :confused:

 

What you are missing is because RCI and Celebrity says it is a benefit, therefore it is to them. Simple, but deluded.

[greydog]

In todays environment of low interest rates(US) I don't see much benefit from a reduced deposit.

 

What am I missing? What circumstances might occur that would make that a benefit? :confused:

 

Offer to pay the full deposit. If you prefer not to, then maybe it WAS a benefit.

 

Look at all the sturm and drang about pre-paying Select dining gratuities, even at current low interest rates.

Happy Cruising

[Wiltonian]

I agree. I do not see why reduced deposits are a benefit and I live in the UK where deposits are non-refundable and always book as soon as cruises are released up to two years in advance. I do not book a cruise I have no intention of taking. Why should it matter that you pay some of it up front?

 

But if Celebrity UK re-priced my cruise at a lower rate with similar perks for new-bookings only, it's far more likely to be worth losing the £50 pp deposit that I did pay than the larger one that one sometimes has to pay.

 

Stuart

[TomTN]

But if Celebrity UK re-priced my cruise at a lower rate with similar perks for new-bookings only, it's far more likely to be worth losing the £50 pp deposit that I did pay than the larger one that one sometimes has to pay.

 

Stuart

 

There is a benefit in the UK provided the deposit is non-refundable. If you cancel you would not lose as much.

 

In the US a $500 reduced benefit would pay you about $1.50 to $5 if put into a 1 year CD.

We (US) can cancel without penalty up to final payment. That is usually 60 days before sailing.

[Fouremco]

On a four day cruise to Bermuda in an inside cabin booked five months before departure, the potential benefit is minimal to North American residents. On the other hand, if you book a couple of years in advance one of the more expensive suites for something like the 20 night African Safari & The Iberian Peninsula cruise, where a suite cost over $25K, you are looking at a different story.

 

Turning the question around, what is the benefit to you in paying a full deposit if given the option of paying a reduced amount?

[RickT]

It's not a huge benefit but when booking a year out it's better to only have $100 of your money tied up in a deposit and use the rest of the money to pay down any debt or invest for a modest return.

 

Better to have your money in your own pocket than in the hands of someone else.

[lobster129]

Also, if you book your travel insurance independently of the cruise line....and need/want the coverage of pre-existing medical conditions...a smaller deposit IS an advantage with some insurance companies.

 

Initially I need to only cover my current costs/deposits. So I cover $500 on each of us. I bump up that coverage when I add hotels, air, tours etc. It is helpful to me for planning a year or more in advance. (Additional coverage must be booked within 14 days of new travel deposits/reservations.)

 

Also my travel insurance company allows me to "move" my insurance if I change my cruise sailing date, ship or itinerary. YRMV!

[lobster129]

Duplicate

Edited July 12, 2015 by lobster129

[CHEZMARYLOU]

The higher the balance in my Credit Union account the higher the interest %age I get. For that reason, I see a reduced deposit as a benefit.

[TomTN]

On a four day cruise to Bermuda in an inside cabin booked five months before departure, the potential benefit is minimal to North American residents. On the other hand, if you book a couple of years in advance one of the more expensive suites for something like the 20 night African Safari & The Iberian Peninsula cruise, where a suite cost over $25K, you are looking at a different story.

 

Turning the question around, what is the benefit to you in paying a full deposit if given the option of paying a reduced amount?

 

None, and I've never been given the option to pay full or reduced. I often get a reduced deposit, but as far as I'm concerned it is virtually worthless. My bank and Vanguard pay almost nothing on cash.

[Redtravel]

I would agree that a reduced deposit is not a benefit. It is more of an incentive to get you to book. As most travel agencies know, once a person books a vacation, they think about it. They get in the vacation mode. They seldom cancel. I have done it. I have booked cruises while sailing with reduced deposits. Sometimes it maybe a whim while on vacation. The end result is that I usually take my booked vacations. The benefit of reduced deposits is a benefit to the booking agency. It is a nice incentive to get you to book. It is a win win situation for all.

[Ma Bell]

If you have a number of cruises booked for the future it can amount to quite a bit. I can use the money in my business ventures and get a great return during the period that Celebrity would be holding my money.

[camarodrivenrs]

From my college days, here's why:

 

Future Value= Present Value X (1 + Rate of Return)^Number of Periods

 

 

So I suppose if you had a lot of expensive cruises booked, a reduced deposit could be a significant benefit.

[Chunky2219]

Oh dear, oh dear, everyone concentrating on the minuscule value of having money earning no interest in your pocket or someone else's. That's not the benefit of a smaller deposit at all.

 

The main benefit is that sadly, in life stuff happens. If for any reason you have to dip out of that cruise you planned for later this year then you have less money at risk. I say this speaking from the perspective of someone who has had to contemplate that several times in recent years because of family health problems with the "old uns". Even now, I'm waiting for the final results of something that put me in intensive care for 8 days to make sure I've no chance of a occurrence before I can dive in and start looking for a cruise for late this year.

 

As a further example, a couple of years ago Cunard wanted their customary 15% deposit whereas I was happy to book well in advance with Celebrity and risk a mere £150 deposit in case we had to cancel due to unpredictable but possibly not unlikely events.

 

Zero deposits, or fully refundable (in the UK) is the way to go please Celebrity.

 

 

 

.

[CABINET]

I haven't looked at Celebrity's conditions but I do know that paying a smaller deposit in the UK does not always mean that you are only risking a small amount of loss if you need to cancel.

 

A well known company that deals with self catering holiday accommodation often offers the opportunity to book a property with only a £25 deposit.

 

However, if you cancel you then become liable for the "normal" deposit.

[DirtyDawg]

It's just marketing/sales lingo. Those Marketing MBA's have to earn their salary doing something. ;)

 

Reduced Deposit is just like;

New and improved

For a limited time

Free handset with a Cellular package, or

I own a yacht.:D

[AtleeH]

If I lived in the UK, where deposits are lost if I cancel a cruise, reduced deposits would be a big deal to me.

 

Here in the Colonies, where cancellation, before final payment, returns the full deposit, it doesn't make nearly as much difference.

 

If the difference between a $125 deposit and a $250 deposit were to make that much difference in my financial well being, I'd probably not be doing any cruises.

 

I do see some benefit to reduced deposit if one has multiple cruises booked.

[C-Dragons]

I'm sure reduced deposits have a greater value to those who normally pay $1,800 per cruise. That's a lot of money being tied up especially if one has multiple cruises booked. So I see it as a definite benefit.

[chamima]

Also, if you book your travel insurance independently of the cruise line....and need/want the coverage of pre-existing medical conditions...a smaller deposit IS an advantage with some insurance companies.

 

Initially I need to only cover my current costs/deposits. So I cover $500 on each of us. I bump up that coverage when I add hotels, air, tours etc. It is helpful to me for planning a year or more in advance. (Additional coverage must be booked within 14 days of new travel deposits/reservations.)

 

Also my travel insurance company allows me to "move" my insurance if I change my cruise sailing date, ship or itinerary. YRMV!

 

 

I, too , thought there was little benefit to the reduced deposit other than the psychological one .

But this is a whole new concept to me.

In the past when I've inquired about insurance I've been asked the price of the trip.

If you don't mind telling, what insurance allows you to just start out insuring the deposit and then raising the coverage?

[Cruise Junky]

I have dividends paying 5% and a mutual fund paying around 25% last year, if I don't have to pay a $1,000 deposit, I can be putting my cash to far better use.

[TomTN]

I have dividends paying 5% and a mutual fund paying around 25% last year, if I don't have to pay a $1,000 deposit, I can be putting my cash to far better use.

 

I suspect many people have investments that perform well. But those type of investments can also lose money. Last years performance is no indication of how well a stock or mutual fund will perform this year.

Most people would not put that $500 reduced deposit savings in an account that fluctuates. They would put it in an account that is highly liquid. Checking, Savings, Money Market, CD.

[MisterBill99]

Some people pay interest on their credit card, so charging less of a deposit is beneficial. Some people budget tightly and don't have the full $250pp available at the time they book. Some have to book for a large party and it's a significant amount of money to have to put down up front.

 

I don't see why there should be any question that having to give the cruise line less money a months (or years) before you actually sail is a benefit.

 

Most people would not put that $500 reduced deposit savings in an account that fluctuates. They would put it in an account that is highly liquid. Checking, Savings, Money Market, CD.

 

Why is everyone here all of a sudden such an expert in what others do with their money?

Edited July 13, 2015 by MisterBill99