Half of millennials, Gen Z go into debt for summer travel. Here’s why.

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In a Nutshell

A Credit Karma survey found about half of millennials (51%) and Gen Z (49%) have gone into debt for summer travel, but few regret it. And nearly one in five Americans surveyed has yet to pay off the debt from last year’s summer travel. What's driving it? A combination of YOLO and FOMO.

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When YOLO meets FOMO during the summer, it can equal “uh oh” for your finances.

A new Credit Karma survey of 1,033 American adults found that more than two in five Americans (42%) have gone into debt to fund their summer travel, but younger generations are leading the charge. About half of millennial and Gen Z respondents have gone into debt for summer travel with little feelings of regret, we found.

Why are people seemingly unconcerned about their debt-filled summers?

Because, YOLO. Almost a third (31%) of respondents said they’ve gone into debt to fund summer travel because “life is short and you only live once.” And FOMO: 11% of respondents said they went into debt because they had a “fear of missing a novel or once-in-a-lifetime experience.”

And that debt could linger even longer if you put it on a credit card. Nearly 20% of respondents said they’ve gone into debt to the tune of $1,001 to $5,000 to fund summer travel, with 43% of respondents putting those charges on a credit card. Assuming you pay down 25% of your summer-travel debt each month, taking a year to pay off the average $3,000 in debt you racked up, you could add around $1,000 in interest to your summer travel costs. That would leave you paying a grand total of $4,010 for a $3,000 vacation. (Learn about our methodology.)

But your wanderlust doesn’t have to leave your wallet lost. We’ll share some tips to help you avoid overspending this summer while keeping your travel dreams alive. But first, let’s take a deeper look at what drives summer overspending.

Key survey findings

About half (51%) of millennials and 49% of Gen Z respondents have gone into debt to fund summer travel at some point.
Nearly a quarter (23%) of millennials have yet to pay off their debt from last summer’s travel.
A majority (56%) of respondents who have gone into debt said they’d be willing to go into debt again to travel this summer.
Millennial respondents were more than twice as likely as Gen Z to have gone more than $500 into debt for summer travel — 37% compared to 17%.
76% of millennials and 69% of Gen Z respondents don’t regret going into debt for summer travel last year.

Why are people going into summer-travel debt?

There are a number of ways people justify overspending on summer travel, our survey found. But among respondents, two common factors seem to be YOLO (the idea that “you only live once”) and FOMO (the “fear of missing out”).

Of those who went into debt for summer travel, the most common reason cited was “because life is short and you only live once,” (YOLO), at 31%. Another 25% said it was because “I work really hard and deserve a break.”

Meanwhile, nearly a quarter of respondents said they went into summer travel debt because they were driven by feelings of FOMO, like the fear of missing out on a novel or “once-in-a-lifetime” experience (11%) or “because my friends were going” (5%).

What’s more, a select few respondents said they were driven by a fear of losing friends (2%) or the fear of missing a chance to post something to social media (1%).

Top 5 reasons people went into debt for summer travel
Reason Percentage of respondents
Because life is short and you only live once 31%
I work really hard and deserve a break 25%
The trip was on my bucket list 13%
Fear of missing a novel or “once-in-a-lifetime” experience 11%
Because my friends were going 5%

But do they regret it? Our survey suggests not. A large majority of millennial and Gen Z respondents said they don’t regret going into debt for summer travel last year (76% and 69%, respectively). And a full 56% of respondents who’ve gone into debt said they’d be willing to go into debt again to travel this summer. 

How much summer-travel debt are people racking up?

People can go into thousands of dollars of debt to fund summer travel, our survey found. Nearly one in five respondents said they’ve racked up more than $1,000 in debt. And it can take months to pay down. Of respondents, 41% said it took them four months or longer to pay down the debt from their summer travel last year.

How much summer-travel debt have people accumulated?
Amount of debt Percentage of respondents
None 15%
$1 to $100 10%
$101 to $250 11%
$251 to $500 23%
$501 to $1,000 23%
$1,001 to $5,000 18%

When you look at the generational breakdown, millennial respondents were more than twice as likely as Gen Z to have gone more than $500 in debt for summer travel (37% and 17%).

What type of summer travel is worth the debt hangover?

When it comes to summer travel, vacations are king. The top reason people were willing to go into debt for summer travel was to go on vacation (39%), followed by visiting family (24%), going to a funeral (19%), and weekend trips or friends’ weddings (at 13% each).

In each of the top cases for overspending, much of the experience appears to revolve around family and friends, highlighting the link between spending on summer travel and maintaining strong social ties with friends and family.

The type of travel that drives the most summer debt
Type of travel Percentage of respondents
Vacation 39%
Visiting family 24%
Funeral 19%
Weekend trips 13%
Friends’ weddings 13%
Honeymoon 11%
Visiting friends 10%
Music event or festival 10%
Bleisure (travel for business + leisure) 5%

 
As for the biggest trip splurges, about half (49%) of respondents said they typically spend the most on hotel and accommodations during summer travel, while 45% spend the most on food and 27% on shopping and souvenirs.


Tips for keeping your travel dreams alive but curbing your spending

It’s clear that summer travel is important — so much so that many are willing to go into debt for it. Still, 58% of all respondents said they haven’t gone into debt for summer travel, meaning your travel dreams don’t have to break the bank.

How did people manage to stay out of debt while traveling in the summer? Here are some strategies from people who’ve done it.

How did you stay out of summer-travel debt?
Strategy Percentage of respondents
Made a budget before my trip 38%
Researched and booked the cheapest accommodations 36%
Cooked for myself instead of dining out 31%
Stayed with friends 30%
Kept flexible flight dates for cheaper flights 28%
Used credit card rewards 28%

 
Here are some other tips to help you enjoy YOLO without the “uh oh” when checking your bank balance.

Assess your finances

You should have a good idea of how much money you make and what your regular expenses are in order to plan for expenses like summer travel. Create a budget to see where you can free up money to put aside for your upcoming trip. Many respondents from our survey said their average summer vacations cost $1,000 to $3,000. After creating your budget, take whatever money you’ve freed up to help chip away at your travel expenses.

Research budget, low-cost options

Take inspiration from those who’ve traveled without going into debt and do your research before you book. Specifically, look for ways to reduce spending on lodging, food and gifts — the biggest expenses cited among people who went into debt for summer travel.

Plan how you pay

While you might normally want to keep credit cards at home to avoid overspending, when it comes to travel, there can be some benefits to credit card use. Specifically, many credit cards feature travel rewards like airline miles or free hotel stays that could help defray the pricier costs associated with summer travel.


Methodology

On behalf of Credit Karma, Qualtrics conducted a nationally representative online survey in March 2019 of 1,033 Americans ages 18 and up to learn about their spending habits related to summer travel. To calculate how much added interest you could accrue over a year after putting $3,000 in travel debt on a credit card, we determined how much balance would be left over after making a 25% payment toward the debt each month of the year, assuming you didn’t make any additional charges on the credit card. We then multiplied each monthly balance by a yearly APR of 15.09%. The average APR used is based on February 2019 data from the Federal Reserve. All percentages in this article have been rounded to the nearest whole.