Millennials and Gen Z Are Going Into Debt to Take a Vacation This Summer
Younger generations are leaning on credit cards and payment plans to travel, and they have no regrets.
We are outside! If your Instagram feed hasn't made it clear enough already, people are going places. Whether that's Europe or Latin America, Miami or Las Vegas—vacation days have been submitted, bags are being packed, and TikTok travel hacks are being bookmarked. And if you are scrolling through your feed thinking: "How is everyone affording this?" We aren't!
American Express's Amex Trendex Millennial and Gen-Z Summer Spotlight Report shows that 69% of millennial and Gen Z respondents to a recent poll plan on traveling this summer, and a recent study from Credit Karma found that 63% of Gen Zers plan to travel this summer, despite feelings of financial instability.
The Credit Karma study also found that 38% of Gen Z and 28% of millennials say they've been influenced to spend money they don't have on travel after seeing other people's vacations on social media. And while personal finance blogs may frame this debt as irresponsibility or poor financial planning, the reality is that it is almost impossible for people in the most common tax brackets to travel in 2023 without going into debt. Not only that, but putting trips on plastic (or some other form of payment plan) is incentivized now. Booking with popular travel credit cards translates to points and perks, and airlines are offering installment plans like Klarna and Uplift at checkout.
It's also not like the decision to go into debt in order to travel is borne out of totally frivolous lifestyle choices. In the Credit Karma study, 50% of Gen Z respondents shared that they have sacrificed dining out and meal delivery, 47% have cut back on shopping for clothing and electronics, while 35% say they plan to take on an additional job, and 19% say they're willing to give up necessities to pay for travel. These findings track with previous research finding that Americans were also cutting back on even basic expenses like groceries to travel.
Like everything else in 2023, young people are having to balance surviving and living. There’s plenty of people out there (some of whom will probably end up in the comment section of the Facebook post sharing this story) who will lament the financial irresponsibility of putting a vacation on Uplift. I'm sure the credit bureau will love you back one day.
"I used to work in a hospice where a lot of patients were telling me they wished they traveled more when they had the health," Beck, who is 29, explains. She now works in aviation, which has opened up a lot of doors for traveling. "I absolutely took everything they said to heart and I travel as much as I can so I'm not sitting on my deathbed telling that to some other fresh-faced hospice worker."
Beck is an example of a traveler who is using her credit card with maximum efficiency. "I have my Amex Platinum that I literally only use when I'm traveling so I have peace of mind when it comes to getting help with any reservations that go wrong, and more advantages when it comes to flying, plus points I save for hotels," she says. "I'm not willing to max out any card for anything, let alone traveling. I grew up with my parents having a travel budget and it's one of the things I kept doing into my adulthood."
"There are new boundaries, in my opinion, for making sure you don't shoot yourself in the foot."
Young travelers who may not have as planned out of an approach as Beck are still using strategy to reduce costs and save money on trips. Amex Trendex reports that 89% of millennials and Gen Zers are very likely to use travel hacks when they are booking trips over the next six months, and 65% of millennials and Gen Z report they saving money over the past six months to pay for the experiences (like music festivals or sports events) they'll be attending this summer.
But like with most things, no amount of saving money is going to mean you'll have all the cash you need to fund big purchases up front.
"I have a full-time job as a manager at a nonprofit," Tonie-Marie Gallardo told Thrillist. They are in their late 20s, and are currently planning an international trip to visit their partner's parents. "I'm out here trying my best to be 'responsible' but at what point is that just morally rigid bootstrap bullshit from a struggling middle class trying to do things the 'right' way."
"There are new boundaries, in my opinion, for making sure you don't shoot yourself in the foot," Gallardo continues. "Meaning, OK, maybe I can't save meaningfully in a savings account, pay bills, and save for vacation at the same time. I'll make sure my credit stays good, set alarms for an annual balance transfer, make sure I have a long-term plan for the debt that's reasonable to me (and me alone.. mind your business, mom!) and continue to advocate for myself at my job to fight for myself and my peers to fight the ever-climbing inflation."
The idea that sacrificing on travel in order to keep finances in order is no longer worth it is pretty widespread. Debt cannot be considered a moral failing or a lack of discipline when debt is not only an expectation, but a primary function of the American economy. For Hayley Schueneman, 33, a senior editor who works in publishing, using Uplift for flights has helped fund a vacation to France and a trip to North Carolina for a wedding.
"People who say: 'Never use credit cards, never buy anything on credit that you can't buy outright, never use payment plans that charge interest,'—like, it's fine to use these things," Schueneman says. "They're not morally bad. They're tools that can help make things affordable and accessible for people who live paycheck to paycheck or on a budget. Obviously a lot of things can be predatory in nature, but if you wanna pay $100 a month to go to France instead of $700 right now, it's fine."
"I'd rather be able to experience life and pay for it than have money and not be living at all."
As someone who has used Uplift to afford an upcoming trip to Spain, Affirm to fund my flights to see family in Colombia, and Klarna to pay for an Airbnb in Miami, and who put my family's Christmas trip up north on three different credit cards, I am the epitome of the young (27 is young!) person going into debt in order to travel. At any given time, I'm floating between $500 and $1,500 that I owe to various creditors. Sometimes that's really stressful, and means I am spending a week trying to see how many different ways I can make the groceries in my fridge last until the next pay day.
But the alternative is to not travel; and that doesn't just suck because it means I'll be seeing posts from all my friends in places I'll never see (though let's BeReal, that does suck). It also means conceding that I don't deserve to have adventures, to explore, to lay on a beach in the pitch black of night and look up at a sky full of stars I can't see at home. Fortunately, one of my central beliefs is that everyone—even people without the upfront cash—deserves to have adventures, to explore, and to rest.
"Traveling is different than what I thought it would be," Asia Henderson, 24, says. Henderson is planning on taking a trip to Italy to celebrate her 25th birthday in September, and is planning to use her Capital One card for most of the bookings. "I didn't think it'd be so stressful to plan logistically and financially. So many things cost money, and when you're living paycheck to paycheck, it can feel unrealistic and even naive or irresponsible to try to spend money outside of your means to travel."
"But to me I'd rather be able to experience life and pay for it than have money and not be living at all," Henderson continued. "To afford the trip, I've been trying to spend less on food and unnecessary purchases, but ultimately I will have to use my credit card for the bulk of the trip either way since I don't have much spare money to save for it."
The consensus from those choosing to go into debt to travel is that the costs and the debt are worth the experience. After all, at the end of my life I'm not going to be talking about how good of a person I am because I never put anything on credit. I am going to talk about the paella I ate in Spain, the sunrise I saw crest over the Acropolis in Athens, the cool and surging ocean I splashed through in Ghana, and the glaciers I trekked in Argentina.
"I can barely save money now. I live with a partner, I have a great credit score, I'm paying off debt slowly on one card that I've been nurturing since I graduated," Gallardo says. "I pay my bills on time. Like, I wanna travel. I'm not gonna own a house so what the f*ck is the point?"
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