Going on vacation can be expensive, with average costs coming in at more than $7,000 this year. This travel spending has around a third of Americans who travel expecting to go into debt for their getaways, according to Bankrate.
An article published by Bankrate this week said the average cost for a vacation this year is $7,249, citing travel insurance marketplace Squaremouth. Compared to 2024, that cost is up by 24%.
This week, Bankrate Senior Analyst Ted Rossman joined Tommy Tucker with Audacy station WWL to dive into the data.
“We see in our research that about a third of summer travelers are going to take on debt, which is worrisome just given how high these interest rates are,” said Rossman. “It’s about 20% on average for credit cards.”
He also said that many consumers are turning to “buy now, pay later” programs such as Affirm, Afterpay and Klarna to pay for vacations. These are often payment plans over a short-term fixed time. Rossman said there is even a “buy now, pay later” program specifically for vacations called Uplift.
Although these programs offer a way to pay off purchases over short periods, such as six weeks, Rossman warned that they are a form of debt along with credit cards and loans. Every time a consumer takes on debt, they risk it sticking with them, he noted.
“The issue is that half of credit holders already carry debt from month to month,” Rossman told Tucker. “The average interest rates about 20% and if the average debt load is about $6,600 according to TransUnion, so if you make minimum payments, in that scenario you’re in debt for 18 years.”
Adding debt for a vacation likely isn’t worth it, he said. For those who yearn to travel, he recommends creating a savings account and naming it specifically for their trip of choice.
“Research shows that, when you name an account, it’s powerful,” Rossman explained. “You’re less likely to raid the account for something else. You’re more likely to want to contribute to it. If there’s a trip you really want to go on next year, name the account ‘Paris 2026’ or whatever it is. And then you’re going to steadily contribute to it. You’re less likely to dip into it for something else. That can actually be a powerful motivator.”
He also said that planning a travel budget before you go can help reign in excessive spending.
Despite concerns about tariffs and inflation, Rossman noted that data from this year showed that Americans have roughly the same travel plans as they did last summer. A little under half, 46%, said they plan to travel, around 25% said they aren’t planning a vacation, 25% said they aren’t sure and 10% said they are planning a staycation.
“Travel is kind of holding its own,” said Rossman. “The demand has plateaued a little bit, but it's plateaued at a high level.”