What happens when YOLO (you only live once) meets FOMO (the fear of missing out)? According to a new Credit Karma survey, debt.
About half of millennial and Gen Z respondents have gone into debt for summer travel-and very few regret it. Many (23 percent) have yet to pay off the debt from last year's travel and a majority (56 percent) of respondents who have gone into debt said they'd be willing to go into debt again to travel this summer.
Millennials were more likely than Gen-Z to have more than $500 into debt for summer travel with 37 percent of millennials indicating they were willing to spend more than they had compared to 17 percent of Gen-Z respondents.
Another survey from Vrbo found similar results, noting that millennials are not willing to put off vacations even if they can't afford it.
"Forget what you thought about millennials traveling on a shoestring," said Karen Fuller, senior director of global market research at Vrbo. "Our results revealed that they are actually the most likely to go into debt for travel, which is consistent with the notion that millennials like to accumulate experiences, not things."
YOLO was one of the most popular reasons used to justify going into debt to travel with 31 percent of respondents saying that "life is too short and you only live once."
Twenty-five percent believe they work really hard and deserve a break. Another 13 percent noted that they are ticking a trip off their bucket list. Eleven percent said that they fear missing out on a once-in-a-lifetime experience, and 5 percent said they went into debt to travel because a friend was going.
While many may not regret going into debt for their summer vacations, there is a high price to pay.
In the Credit Karma survey, nearly 20 percent of respondents said they've gone into debt to the tune of $1,001 to $5,000 to fund summer travel, with 43 percent of respondents putting those charges on a credit card.
Credit cards charge high interest rates and that means, travelers who charge up high balances are going to be paying a pretty penny for their trips. According to Credit Karma, if you pay down 25 percent of your summer-travel debt each month and it takes one year to pay off the average $3,000 in debt, you could add approximately $1,000 in interest to your summer travel costs.
Travel dreams don't have to break the bank and using some simple tips, travelers can stay on budget and enjoy the vacation of their dreams. Credit Karma suggests creating a budget to free up money for travel expenses.
For pricey trips, find ways to reduce spending. Food, lodging and gifts really add up and minimizing these costs can make a high-end destination more budget friendly.
Credit Karma also notes the advantages of credit cards with miles or points for hotel rewards. Consider building the use of these points into your trip to pay for flights or hotel costs and use cards that give you points to accrue rewards.
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