A destination debt wish: 1 in 8 Aussies pay for holidays with credit
Holidaymakers are going into debt trying to afford their next trip, according to new research by Finder.
A nationally representative survey of 1,086 respondents revealed 1 in 8 (12%) Australians plan to borrow money to pay for their next getaway.
That's 2.3 million holidaymakers who will come home to debt.
The research found 7% plan to use a credit card to pay for their next trip, while 3% will rely on buy now pay later services to fund their travel plans.
A further 2% of Aussies will get a personal loan or borrow money from friends and family to make their travel dreams a reality.
Amy Bradney-George, credit card expert at Finder, said Aussies have holidays on their mind as border restrictions ease.
"Plenty of Aussies can't wait to holiday again but unfortunately their bank balances aren't quite as ready.
"Not everyone is waiting until they have the cash upfront to break their travel hiatus."
According to the ABS, there were 227,230 overseas departures in December 2021 – the highest number since international border restrictions were imposed in March 2020.
More than half of Australians (56%) tap into their savings when booking holidays.
Bradney-George said some travellers prefer to book their holidays with a credit card because of free travel insurance offered on some cards that may offer further financial protection.
"While this can seem like an attractive perk, it's not the best fit for everyone as it can come with expensive annual fees."
Bradney-George said there were many ways Aussies could save money on their travels with some clever planning.
"Travel sales are back, so make sure you shop around to see what's available. Don't rule out international airline sales, either – sometimes they have very competitive deals departing from Australia.
"If you're taking a credit card with you, set up automatic repayments so you can reduce or avoid interest charges when you're away.
"Right now, there are frequent flyer credit cards that offer enough bonus points for a flight overseas. Plus, you'll earn points on all your everyday spending with the card, which could go towards future trips," Bradney-George said.
Men (15%) are more likely to rely on credit to fund a holiday than women (10%).
| How do you primarily plan to finance your next holiday? | |
|---|---|
| Savings | 56% |
| I don't plan to travel | 22% |
| I don't know | 10% |
| Credit card | 7% |
| Buy now pay later | 3% |
| Personal loan | 1% |
| Borrow from friends/family | 1% |
| Source: Finder survey of 1,086 respondents, February 2022 |
Check out the best frequent flyer cards of March 2022.