How to Pay for a Vacation Despite Rising Prices

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Wondering how to pay for a vacation on a budget? Whether you dream of an exotic beach getaway or a weekend trip to the mountains, travel expenses can add up quickly. 

According to a survey conducted in 2024, 47% of Americans reported being unable to afford summer travel. 

Fortunately, there are ways to financially prepare for future vacations and cut the cost of travel by strategically choosing your payment methods, travel dates and more. 

Use credit card rewards 

Credit cards can help pay for a vacation. The right rewards credit card could cover some of your biggest vacation expenses. Consider these options for making your trip more affordable:  

  • Travel rewards credit cards: Earn travel points or miles that can be redeemed for flights, hotels, rideshare or experiences.   
  • Cash-back rewards credit cards: Get a set percentage of cash back for every dollar you spend, with higher percentages for certain categories like airfare.  
  • Welcome bonus cards: Some cards offer a large, one-time bonus of rewards points, miles or cash-back when you hit a spending target within a set timeframe.  
  • Introductory 0% APR cards: Avoid interest charges on your vacation purchases by putting them on a 0% introductory APR card, then paying them off before the introductory period ends.  

Book flights early  

You can avoid paying high prices by booking travel at the right time. If you wait until the last minute, your only options might be ultra-pricey flights with excessive layovers and costly hotels in undesirable locations. 

To possibly save money on flights, book domestic trips about one to two months in advance and international trips three to five months ahead. 

Travel during the off-season  

For cheaper flights and lodging, avoid traveling to your destination during the following popular days and seasons:  

  • Major holidays and long weekends  
  • Peak season for local weather  
  • Thursdays, Fridays and Sundays (for domestic flights)  

You can also use a booking tool like Google Flights to view a forecast of fare prices on specific dates.  

Start a sinking fund 

A sinking fund is a savings fund you create to cover a specific future cost. If you’re planning a vacation in advance, you can start building a sinking fund to help you pay for vacation with cash. Here are a few ways to make it happen:  

  • Set a savings target for your trip, including the full cost of flights, ground transportation, lodging, food and activities.   
  • Divide your savings goal by the number of paychecks you’ll receive before your trip.  
  • Set up an automatic, recurring deposit to your sinking fund from each paycheck, even if it’s only a portion of the total amount you need to hit your savings target.  
  • Keep the funds in a high-yield savings account (HYSA) or another account that earns interest without fees.  
  • Review your credit card and bank statements to find costs you can cut between now and your vacation, then divert the extra money to your sinking fund.   
  • For family vacations, ask the kids to make small contributions from their allowances or money earned for odd jobs.  

Apply for a vacation loan  

A vacation loan is a personal loan that’s used for the purpose of travel. While taking on debt isn’t ideal, using a loan instead of a credit card could save you money since the interest rates are often much lower on loans. 

By comparison, the average APR on credit cards is nearly 22%, but the average APR on a 24-month personal loan is around 12%. 

Make your dream vacation a reality 

Going on vacation doesn’t have to be a luxury that only a few can afford. Whether you use credit card rewards, book early or travel during the off-season, there are plenty of ways to financially prepare for your next trip and cut the cost of travel. 

Remember, with a little planning and budgeting, you can enjoy a memorable vacation without worrying about the financial burden. 

Written by Sarah Brady | Edited by Rose Wheeler

Sarah Brady is a financial writer and speaker who’s written for Forbes Advisor, Investopedia, Experian and more. She is also a former Housing Counselor (HUD) and Certified Credit Counselor (NFCC).

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