Financial experts are concerned about the 36% of Americans who plan to take on debt for summer travel.

• A March 2024 report from Bankrate reveals that over one-third of summer vacationers are open to accruing debt to finance their travel plans.
• A quarter of summer travelers plan to pay for their vacation using a credit card and spread the cost over several billing cycles.
• According to Ted Rossman, a senior credit card industry analyst at Bankrate, this situation involves a large number of individuals assuming expensive debt, which has the potential to persist.

After Labor Day, some individuals may struggle with paying their summer travel expenses.

A March survey from Bankrate found that 36% of Americans plan to take on debt to travel this summer. The payment methods for summer travel expenses included personal loans (5%), buy now, pay later services (8%), and borrowing from family and friends (6%).

Over 26% of summer travelers plan to pay for their vacation using a credit card and spread the cost over multiple billing cycles.

The reason that's concerning is that the average credit card charges are close to a record high, with more than 20% being charged, according to Ted Rossman, a senior credit card industry analyst at Bankrate.

"He stated that he didn't want to restrict people's enjoyment, but the situation represented a significant number of individuals taking on expensive debt, which could have long-term consequences."

Households have experienced an increase in their purchasing power.

According to Bankrate, the most likely age groups to take on debt for vacation are millennials (47%) and Gen Zs (42%).

Sabrina Romanoff, a clinical psychologist, stated that there are numerous compelling reasons why individuals opt to accrue debt in order to fund their vacations.

"If your children aspire to visit Disney World but the family cannot afford it without incurring debt, it could be a lasting memory for the family," she stated as an illustration.

She added, "Parents often justify spending on trips for their children, especially when the experience seems like a significant milestone in childhood."

How to have fun on a budget: 'Zig when others zag'

To budget for a vacation, financial experts recommend planning ahead.

"Romanoff stated that money spent on trips can feel like Monopoly money, as people tend to be more willing to accept the experience due to the luxurious mindset they are in."

Romanoff recommends clients to establish a budget for specific spending categories while traveling, including food, activities, and transportation.

Romanoff advises to allocate areas where you indulge and those where you spend frugally.

Romanoff stated that a client they worked with opted to stay in an Airbnb and cook their own meals to save money, while also splurging on a boat trip they were excited about, resulting in a compromise.

After setting a budget, the next step is to create a plan to save. Romanoff advises starting small and allocating a portion of money from each paycheck.

Rossman recommends utilizing frequent flier miles or credit card rewards to optimize travel expenses.

Visiting locations during off-peak seasons can help travelers save money.

"Rossman advised, "Zigging instead of zagging can lead to better travel experiences. Consider traveling during off or shoulder seasons, driving instead of flying, and traveling midweek instead of weekends. Letting the deal dictate the destination can also be beneficial. Flexibility is crucial.""

Americans are paying for summer vacation in various ways.