More than a third of summer vacationers said they would be willing to go into debt to pay for their trip, according to a March 2024 report from Bankrate. Nearly a quarter (26%) of summer vacationers said they would use a credit card to pay for their trip over multiple billing cycles. “This shows that a lot of people are taking on high amounts of debt that can drag on,” said Ted Rothman, senior credit card industry analyst at Bankrate.
Some people may find themselves struggling to pay for summer travel even after Labor Day.
To that end, 36% of Americans say they plan to go into debt to travel this summer, according to a March survey from Bankrate. Methods for paying for summer travel expenses range from personal loans (5%) and buy now, pay later services (8%) to borrowing from family and friends (6%).
Additionally, 26% of summer travelers said they intend to use a credit card to pay for their vacation over multiple billing cycles.
“The reason it's concerning is that the average credit card fee is over 20 percent, near an all-time high,” said Ted Rothman, senior credit card industry analyst at Bankrate.
“I don't want to tell people they can't have any fun,” he said, “but it means a lot of people are taking on high levels of debt, and that's the kind of thing that can drag on.”
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According to Bankrate, millennials (47%) and Gen Z (42%) are the demographics most likely to say they plan to go into debt to pay for a vacation.
“There are lots of reasons why people choose to go into debt to take these vacations,” says clinical psychologist Sabrina Romanoff.
“If your child dreams of going to Disney World and there's really no way for your family to make that happen without going into debt, that could be a memory that will stay with your family forever,” she said as an example.
“And parents are often able to justify these expenses for their children, especially if they feel travel was an important, defining part of their childhood,” she added.
How to have fun on a budget: “Zig when others zag”
Financial experts advise that the key to taking a vacation is to plan ahead and budget accordingly.
“Travel money feels like Monopoly money,” Romanoff says. “For some reason, we're in a luxury mindset and we want to say yes to the experience.”
That's why Romanoff advises her clients to set budgets for each expense category while traveling, including food, activities, and transportation.
Romanoff also suggests making a distinction between areas where you spend lavishly and areas where you spend sparingly.
“One client I worked with decided to stay in an Airbnb and planned to cook all of their own meals, so they were trying to save money on food and save on a cruise they were really looking forward to, but it felt like a compromise,” Romanoff said.
After creating a budget, the next step is to create a savings plan. Romanoff recommends starting small and setting aside a little bit of money from your paycheck each month.
You might also find other creative ways to get the most out of your trip while saving money. For example, Rothman suggests taking advantage of frequent flyer miles and other credit card rewards.
Travelers can also save by choosing destinations at different times of the year: lower demand usually translates to lower prices.
“Fast track when others do,” Rothman says. “Travel during the off-season or low season, travel by car instead of flying, travel on a weekday instead of a weekend. If you can nail down your destinations in your contract, that will really help. Flexibility is key.”
To learn more about how Americans are paying for their summer vacations, watch the video above.
