A summer vacation can feel like a seasonal rite of passage \u2014 a sacred time to break away from the demands of everyday life in favor of fun and relaxation.<\/p>\n
But summer can also be an expensive time to travel, which makes it hard to budget enough money for your vacation.<\/p>\n
Though it\u2019s best to pay in cash for nonessential travel, there are financing options available, including credit cards, \u201cbuy now, pay later\u201d plans and vacation loans. Consider the interest rate and how long you\u2019ll be in debt when deciding which to choose.<\/p>\n
Read<\/strong>: If money is tight, tap into these free or cheap ways to maximize your summer fun<\/p>\n Travel demand is in \u201cnear-record territory\u201d with all indicators pointing to a \u201cvery robust summer leisure travel season,\u201d the U.S. Travel Association, a nonprofit that monitors the U.S. travel industry, said in an email. According to the association, demand has driven up prices in sectors like airfare and lodging.<\/p>\n Even without higher prices, travel is tough to budget for, says Jake Northrup, a certified financial planner in Bristol, Rhode Island.<\/p>\n \u201cTravel usually comes in big waves, and there\u2019s just a lot of uncertainty as to what things will actually cost,\u201d Northrup says.<\/p>\n Adrienne Davis, a certified financial planner in the Washington, D.C., area, says her clients often receive last-minute offers to go on trips with friends or family, which leads to a cash shortage.<\/p>\n \u201cWe don\u2019t expect prices to be that high when it\u2019s time to book,\u201d Davis says. \u201cAnd if your money is already allocated on a month-to-month basis, it\u2019s like, \u2018Wow, where am I going to get this extra $500 or $1,000?\u2019\u201d<\/p>\n See<\/strong>: Airlines are bracing for a busy summer travel season \u2014 here\u2019s what to expect<\/p>\n Northrup and Davis emphasize it\u2019s best to avoid taking on debt for a vacation. But because a trip can mean precious time with loved ones or an enriching personal experience, it\u2019s reasonable to explore your options.<\/p>\n \u201cI certainly understand sometimes the best decision that you can make is not the most financially optimal one, and that\u2019s OK,\u201d Northrup says.<\/p>\n Plus:<\/strong> Pack your summer with fun with this list of 33 festivals in 29 states<\/p>\n The majority of travelers this summer (85%) plan to use a credit card to cover travel expenses, according to a\u00a0survey conducted by The Harris Poll for NerdWallet, though most (74%) plan to pay it off in full within the first billing statement.<\/p>\n Davis prefers a credit card if you must finance a trip because you\u2019ll likely earn points or cash back, which can offset costs. Some cards come with protections, she says, like travel insurance.<\/p>\n Also read:<\/strong> My wife wants us to spend $5,000 to attend her cousin\u2019s destination wedding. I don\u2019t want to go. Am I being selfish?<\/p>\n But interest rates on credit cards are high, which is why Davis recommends getting a card with a 0% annual percentage rate and paying off the balance during the initial promotional period \u2014 typically 15 to 21 months \u2014 before regular interest kicks in.<\/p>\n Companies like Affirm Uplift partners with airlines, resorts and other travel companies, including some that offer zero-interest financing and terms up to 24 months, depending on the partner and loan amount. Affirm offers no-interest options with terms up to 60 months.<\/p>\n Northrup prefers buy now, pay later if it\u2019s zero interest, but like any debt, it\u2019s important to prioritize repayment to avoid fees or hits to your credit.<\/p>\n A travel loan, or an\u00a0unsecured personal loan\u00a0from a bank, an online lender or a credit union, is another option. These loans are larger, and rates vary based on your credit score and debt-to-income ratio. Repayment is typically two to seven years, so consider how long you want to be in debt after your vacation.<\/p>\nThe challenges of budgeting for summer travel<\/strong><\/h2>\n
Credit cards, \u2018buy now, pay later\u2019 and vacation loans<\/strong><\/h2>\n
\n AFRM,
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\n and Uplift offer\u00a0buy now, pay later plans for travel. These plans divide your purchase into equal installments that you pay over time, and interest rates vary.<\/p>\n