Debt.com Survey Finds 83% of Americans Rely on Credit Cards for Summer Vacations

Monday, June 10, 2024

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:

1. Establish a Budget: Determine your spending limit upfront, covering everything from travel and lodging to meals and activities, to avoid accumulating debt.
2. Utilize Rewards Strategically: If you’re using credit cards, maximize cashback and rewards, but ensure you can clear the balance to dodge interest fees.
3. 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.
4. Explore Local Options: Consider nearby destinations for a fulfilling vacation experience without the hefty costs of long-distance travel.
5. 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.
6. 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.