Should You Charge a Family Vacation to Your Credit Card?

Published May 2021

It’s never a good idea to finance a vacation with debt, but it might make sense to charge your expenses to a credit card temporarily. Learn more here.

Key Points: 

  • It is generally a bad idea to charge your vacation to a credit card because debt can accumulate faster than you think.
  • If you have savings and can pay off your balance immediately, it might make sense to use a credit card for the rewards, convenience, and various protections credit cards offer.
  • If your family vacation drives you into debt, do not hesitate to explore debt relief options quickly.

Spending money you don’t have on a vacation you don’t necessarily need is not a great financial decision. Charging a family vacation to your credit card may buy you some quality time with your loved ones, and you can’t put a price on that. But when you return home, and your first credit card statement threatens financial doom, your perspective can quickly turn sour. When possible, it’s better to vacation debt-free.

Despite what financial common sense says, an increasing number of Americans turn to credit cards to finance their vacations. According to an Experian study, 86 percent of vacationers ended up charging some of their summer expenses in one recent year. Around 35 percent had failed to save up in advance for their summer adventures. 

How Vacationing on Credit Hurts your Finances 

Accruing credit card debt on vacationing-related expenses can hurt you financially in several ways. 

Consumer debt is one of the most expensive types of debt. Interest-related costs accumulate quickly, and before you know it, you pay out the full cost of a future vacation for one you have already had. Credit card interest is a relentless enemy. 

For example, if your family vacation ends up costing you $4,000 and you pay for it with a credit card with a 16 percent APR, you will lose around $350 in interest if you manage to pay it off in a year. If it takes you longer, you surrender even more money to credit card interest.

Accumulating credit card debt can hurt your credit scores. By using up more of your available credit, you hurt your credit utilization ratio. It is generally healthy to keep this ratio under 30 percent. If your credit limit is $4,000 and you have used $2,000 of it, you are at 50 percent utilization, and your credit score is already suffering. It is a big mistake to consider available credit as your limit when vacationing on credit.

When Vacationing on Credit Makes Sense 

Under certain circumstances, it makes sense to use a credit card to pay for aspects of your vacation. If you have money set aside for a trip, you should use a credit card to pay for it and immediately pay off the resulting balance. This way, you can leverage various advantages credit cards offer you while still steering clear of debt. 

Credit Card Rewards 

Some credit cards offer better rewards and bonuses than others. Since vacations are expensive and you are likely to spend more while enjoying a couple of weeks away from your normal surroundings, you will find it easy to meet the spending threshold and claim your credit card rewards. 

Some travel credit cards may even offer you generous sign-up rewards. By picking up this free money, you can recover some of your vacation expenses. 

Cashback and rewards


Booking flights and accommodation is also more convenient with a credit card. Using a credit card allows you to fully immerse yourself in the experience instead of constantly worrying about logistics. 

Safety and Protection 

Carrying lots of cash with you as you roam a foreign country is not the best practice. You expose yourself to theft, and if you lose your wallet, you deal yourself a significant financial blow. 

A zero-liability policy in case of fraud offers you complete protection against losing your credit card. Even if your issuer does not have such a policy, federal law only holds you liable for $50. 

Credit cards can also offer you assistance with travel emergencies, protection against losing your luggage, accident insurance, and various other perks. 

If you cannot afford to save up and pay off your credit card balance as soon as you return from your vacation, heed these tips. 

  • Create a budget for your trip and stick to it.
  • Come up with a plan for how you are going to pay off the resulting balance.
  • Use a 0 percent APR card if possible. You may want to consider a balance transfer to such a card if it makes practical sense.
  • Use a credit card that does not charge a foreign exchange fee if you’re vacationing abroad. 

Help for Vacationers Who Go into Debt

If your family vacation expenses have landed you in a situation where you are struggling to pay off your credit card balance, it’s time to explore your debt relief options.  Contact a ClearOne Advantage Certified Debt Specialist at 866-481-1597 to get a free savings estimate today.

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The information provided is for informational purposes only and is not intended to provide legal financial advice. ClearOne Advantage is not a lender, credit repair or consumer credit counseling company. ClearOne Advantage doesn’t provide credit advice. Please consult a certified financial advisor for individual credit and lending advice.

Topics: Credit Card Debt