By Victor Ochieng
Finder.com has found out that Americans often overuse their credit cards on vacations, and it’s costing them about $3 billion in interest fees. This could be a result of poor planning and it mostly affects those who spend by impulse.
“It’s so easy to get into vacation debt—especially during the summer months when you want a getaway, and all you’re thinking is: ‘I’ve worked so hard. I deserve this trip,’” says Lynnette Khalfani-Cox, money coach and author.
“But instead of running up credit card bills that can last another year or more, it’s better to take an excursion that won’t break the bank. Stay in the country instead of going overseas. Plan a weekend trip rather a vacation that lasts a week or two. Maybe do a road trip and crash at the home or apartment of friends and family instead of flying somewhere and charging your hotel bill on a credit card. Even a ‘staycation’—right in your own backyard or exploring your own town/city—may be in order, if you just can’t afford a trip,” she adds.
The study found that men have accumulated more debt compared to women. In total, men owe an average of $1,616, while women owe an average of $1,431. On average, Americans on vacation accumulated credit card debt amounting to $1,518 each. The study also found that the amount of debt accumulated increased with age. Those in the age bracket of 18 – 29 years accumulated more, while those above 60 years of age accumulated less.
To avoid the financial pitfalls that come with vacation debt, experts advise that you should observe the following:
Set a vacation budget
It’s easy to come up with a budget but it’s not easy to stick to it. However, such a budget can be effective if you involve every family member. Let them know how much you’ve set aside for the vacation so they can limit their expenditure to only what’s available.
Pay your bills before you go
Nothing hurts more than coming from a marvelous vacation only to be met with so many notices of unpaid bills. It becomes worse if you had squandered all the money on the vacation and even incurred some debts.
Notify your credit card companies of the places you intend to visit
Many credit card companies do not honor purchases made in areas they feel are outside of your profile. It’s absurd to make a purchase, especially of a meal, only to find out the purchase has been declined. Also notify your credit card company when you’ve returned home.
Vacations are meant to rejuvenate and restore, so don’t let money take away the happiness that a vacation can bring to your family.