We Rely On Credit Cards When Travelling
July 31, 2015 | Your Finances
Vacations are full of delightful pairings: Surf and sand. Bed and breakfast. Rest and relaxation.
But “travel” and “budget” don’t always mix so gracefully.
Across all ages, travelers voiced a strong preference for credit rather than debit cards or cash, opting for credit when paying for lodging, airfare, entertainment and dining.
Still, the survey found that Millennials are especially dependent on credit while out of town; more than half admit to racking up credit card debt on vacation.
According to an Amex travel study, Millennials feel the savings pinch more keenly than any other generation: 80% say they feel the need to make trade-offs to afford a summer vacation, compared to 69% of Gen Xers and 47% of Boomers.
One of the biggest problems is a lack of financial planning, with a third of Millennials reporting that they don’t save up in advance of a trip.
Hung up by a lack of funds, 44% report canceling a trip due to budget constraints, while another 50% say they have paid for a vacation by credit card when they didn’t have enough saved.
“People want to come home from vacation with happy memories, not with unanticipated and unmanageable credit card bills,” says Guy Abramo, president at Experian Consumer Services. “Racking up excessive credit card debt without a plan to pay it off can put people, especially Millennials, in a bind that could affect their financial health and credit status for years to come.”
But that dreamy beach getaway doesn’t have to leave you swimming in debt.
To avoid breaking the bank on your summer vacation, map out a travel budget beforehand (and maybe take a pass on that umpteenth piña colada). Or, consider touring local sites on a “staycation”—which three in four travelers surveyed by Experian agree is an effective way to minimize the cost of summer fun.
LearnVest, Inc. is owned by NM Planning, LLC, a subsidiary of The Northwestern Mutual Life Insurance Company, Milwaukee, Wisconsin.