Why 36% of Americans Would Go Into Debt to Pay for Travel

For many Americans, the price of travel is no longer just measured in airfare, hotels, and event tickets. It can also come with debt.

Thirty-six percent of consumers surveyed by Experian said they would be willing to go into debt for travel, underscoring how strongly vacations and major events are competing for space in already-stretched household budgets.

“People want to make memories, and they want to have those experiences for themselves, for their families,” Christina Roman, Consumer Education and Advocacy Manager at Experian, told us.

For consumers planning travel around major sporting events, including the World Cup, ticket costs are also top of mind. Experian found that 39% of consumers cited event tickets as the travel cost they found most concerning.

When it comes to financing their travels, 19% of those surveyed say they plan to use credit cards or buy now, pay later plans to cover the costs of their trips. And while swiping a credit card or using a BNPL plan can make travel easier to book, Experian’s Roman urges travelers to dig deeper.

She encourages American travelers to approach travel spending with a plan and a clear budget. So even if a traveler goes into debt, there’s a plan for paying it down. By budgeting, travelers also can decide how much debt, if any, they are comfortable taking on for a trip.

“Make sure that you are still having that budget in mind, that you're still being responsible when you're booking your travel plans,” Roman told us. “There's a lot of great ways to travel without going into thousands and thousands of dollars of debt.”

Transportation, hotels, fuel, and fewer lower-cost airline options are all contributing to higher travel costs this summer, Roman explained. But the biggest surprises may come from the smaller purchases travelers forget to plan for.

And it’s not just larger expenses to consider when planning a trip. Smaller travel costs also add up. Roman advised travelers to include everyday purchases such as coffee, snacks, and rideshares in their travel budgets.

“I actually did a trip not too long ago and I was surprised at how much I spent on rideshares that I hadn't really anticipated,” Roman told us.

American travelers also are looking for ways to free up more money in their current budget for travel. Cutting back on subscriptions and trimming discretionary spending are two ways to build up some savings for travel, Roman advises.

Is it risky to charge an entire trip on a credit card? That depends on whether the traveler has a plan to pay it off.

“It makes sense if you've created a budget and you have a realistic plan for how quickly you can pay that debt off,” Roman said.

But she urged people to consider the impact such a move would have on their credit score. She said the more a traveler charges on a credit card, the higher the utilization on that card.

And utilization matters. Amounts owed makes up 30% of a FICO Score, and revolving credit utilization is an important part of that category. So carrying a travel balance for months can cost you in interest charges and may also affect your credit score.

"People want to make memories, and they want to have those experiences for themselves, for their families." — Christina Roman, Experian

What are some mistakes people make when paying for travel with a credit card? Roman said the biggest risk is losing track of spending once the trip begins.

“Some of the biggest mistakes consumers can make when paying for a vacation with a credit card is just not watching exactly what they're spending on it, just kind of running that card up,” Roman told us. “And then they come back and they get the bill and it's a shock.”

To avoid this kind of post-vacation shock, Roman advises travelers to stick with a budget when they travel. Also be aware of the exchange rate when traveling overseas. Travelers should know how far their American dollars will go in the country they are visiting. Being aware of the costs will help you stay on track with your spending.

Here are some of the smart financial moves to make before and during a trip, according to Roman.

Be flexible when you travel, avoid traveling in peak season, and travel in groups to trim costs. Use online websites that offer sales on flights, car rentals, and hotels.

Fidelity recommends using all the travel rewards points that you can when booking your next trip. Those points can help reduce the out-of-pocket cost of a vacation. With enough points, you may enjoy a big discount on your next vacation.

Weekend travel is expensive, so don’t be afraid to take a short getaway during the week, maybe a road trip a couple of hours away.

“You still feel like you got away, but you didn’t have to charge thousands of dollars for it,” Roman said. “It was a little bit more affordable.”