Debt.com Survey Finds Majority Rely on Credit Cards, Many Incurring Significant Debt
As Americans embark on their summer travels, a significant portion will rely on credit cards to fund their trips, with a notable percentage accruing substantial debt.
According to a new survey by Debt.com, 83% of Americans will use credit cards for their vacation expenses this year, with more than a quarter (30%) expecting to charge at least $5,000.
The survey reveals that 56% of travelers use credit cards to earn cashback and rewards, while 19% admit they cannot afford to pay cash but feel compelled to take a vacation. This trend is not new for many, as nearly three in five (59%) have previously incurred debt for summer travel.
This pattern is prevalent across generations, with Gen X (66%), Millennials (64%), Baby Boomers (47%), and Gen Z (34%) reporting summer travel debt in the past.
Debt.com President Don Silvestri expressed concern over this trend. “Nearly 60% have incurred debt for summer travel before,” he noted. “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.”
Key Findings from the Survey
- High Debt Levels: Among those using credit cards for summer travel, 7% plan to charge $15,000 or more.
- Generational Differences: Of those financing their vacations with credit, 25% of Gen X and 18% of Millennials cite affordability issues.
- Impact on Holiday Spending: Of the 46% who say summer travel debt later restricted their holiday spending, 57% are Gen X, 47% are Millennials, 46% are Gen Z, and 22% are Baby Boomers.
Silvestri advises that careful planning and smart financial decisions are crucial to enjoying a summer vacation without incurring debt. “By planning carefully and making smart financial decisions, you can enjoy a memorable summer vacation without the burden of debt, but the key is planning,” he said.
Tips for a Debt-Free Summer Vacation
- Set a Budget: Determine how much you can spend without incurring debt, including transportation, accommodation, food, activities, and souvenirs.
- Use Rewards Wisely: Utilize cashback and reward points, ensuring you can pay off the balance in full to avoid interest charges.
- Prioritize Expenses: Allocate more of your budget to what’s most important and cut back on less critical expenses.
- Stay Local: Explore nearby destinations to reduce costs associated with long-distance travel.
- Be Flexible: Flexibility in travel dates can help secure better deals on flights and accommodation.
- Avoid Impulse Purchases: Stick to your budget and avoid unplanned expenses, setting aside a small allowance for spontaneous spending.
Debt.com, a consumer website, provides resources and advice on managing various types of debt, including credit card, student loan, and tax debt, and offers solutions through vetted and certified providers.
Source: Debt.com
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Source: Summer Means More Debt: 8 in 10 Travelers Will Use Credit Cards to Get Away
