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When Americans embark on summer travels, the majority are opting to use their credit cards for expenses. Over 30% plan to charge at least $5,000 during their trips, as revealed by a recent Debt.com survey. The data indicates that 83% of respondents will rely on credit cards to fund their journeys, with 56% aiming to accumulate cashback and rewards. Additionally, 19% cited the inability to afford cash payments but expressed a strong desire to take a summer vacation. These findings suggest that using credit cards for travel expenses is a common and often recurring practice among Americans.
Nearly 60% of respondents have accrued debt for summer vacations previously. This figure breaks down to 66% for Gen X, 64% for Millennials, 47% for Baby Boomers, and 34% for Gen Z.
A particular outcome has caught the attention of Don Silvestri, President of Debt.com.
“Nearly 60% have incurred debt for summer travel before,” he says. “That’s a big problem because it means Americans are growing accustomed to vacation debt. This country already has a problem with running up debt over the winter holidays. Are we going to go into debt for every holiday? This concerns me.”
Here are some other noteworthy points:
Among those using credit cards for vacation expenses, 7% intend to charge $15,000 or more.
A significant portion of Gen X (25%) and Millennials (18%) cite inability to afford cash as the reason for financing their trips with credit.
In terms of previous credit card debt for summer travel, 66% were Gen X and 64% were Millennials.
Out of those whose summer travel debts later impacted their holiday spending (46% of respondents), over half (57%) were Gen X, followed by 47% Millennials, 46% Gen Z, and 22% Baby Boomers.
“By planning carefully and making smart financial decisions, you can enjoy a memorable summer vacation without the burden of debt,” Silvestri advises, “but the key is planning,”
Here’s some advice for planning a summer vacation without overspending:
Establish a Budget: Determine your spending limit upfront, covering everything from travel and lodging to meals and activities, to avoid accumulating debt.
Utilize Rewards Strategically: If you’re using credit cards, maximize cashback and rewards, but ensure you can clear the balance to dodge interest fees.
Focus on Essentials: Identify key aspects of your trip that matter most to you and allocate more funds there, cutting back on less crucial expenses.
Explore Local Options: Consider nearby destinations for a fulfilling vacation experience without the hefty costs of long-distance travel.
Embrace Flexibility: Stay open to adjusting your travel dates to snag better deals on flights and accommodations, using comparison tools and alerts for optimal rates.
Resist Impulse Buys: Stick to your budget and avoid spontaneous purchases. Reserve a small portion for unplanned expenses, but once it’s spent, refrain from further impulse spending.
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