At a Glance

After the year-plus that wasn’t, you might be itching to hop on a plane, bus, train, boat, or in a car and get away. If you’re in the middle of a debt repayment plan, how should you balance debt payoff with that wanderlust? Or, if traveling would put a damper on your debt-free life, should you schedule that trip anyway?

In this article, we’ll cover:

Going into debt to travel

According to our 2021 summer travel survey, 45% of millennials have taken on debt for summer travel in the past and would do it again. Another 23% of millennials surveyed say they have never taken on debt for travel but would be open to doing it.

With the world opening back up amid COVID-19 vaccinations, people are more eager to travel than ever. In fact, 58% of millennials say they’re more likely to book travel even if it puts them in debt. Maybe you haven’t seen your family in a while, maybe you just need a vacation, or maybe after seeing a Nike ad for the millionth time it finally clicked and you were like, “I should just do it.”

Regardless of your reasoning, you might be keen on not letting debt stop you from doing the things you want. However, that doesn’t mean your jet-setting lifestyle won’t get you into trouble. If you need a reminder, look at the numbers we outlined above: About 68% of millennials have gone into debt to travel or are willing to do so—and, as your parents likely taught you, just because most people are doing something doesn’t make it right.

So, while other types of debt (like mortgages and student loans) might make up more of the total debt for millennials, that innocent summer trip could make your credit card debt even tougher to dig out of.

Can you travel while in debt?

I don’t know, can you?

Technically, as long as you can pay for the trip somehow (even via credit), you could travel while already in debt. The real question, perhaps, is: Should you travel while in debt?

And the answer to that question is a bit more complicated. To be honest, whether or not you should travel while in debt depends on a variety of factors, including:

  • How much debt you have. Do you have a solid debt payoff plan? Would you be able to stick to it even with the financial burden of this trip?
  • What types of debt you have. Credit cards, student loans, mortgage payments. If you have to list them out to remember them all, traveling might not be the move right now.
  • How expensive your trip will be/how much it will add to your debt. Decide what an acceptable amount of debt would be for your trip. Is there somewhere cheaper you can go? Is there a cheaper way to get there or place to stay?
  • How you plan to pay for your trip. If you’re going to put the trip on your credit card, are you confident you can pay it off before accruing an unreasonable amount of interest?
  • How badly the trip would set back your payoff plan. Sure, you want to allow yourself to have fun and enjoy life. But if you’re super close to being debt-free, consider pushing off travel another few months or even a year. (You already went a year or so without going anywhere, right?)

Generally, if you plan to travel while paying off debt, you should make sure you have a plan to pay off your travel expenses as fast as possible—especially if you’re using a high-interest payment method like a credit card.

Understanding different types of debt

One of the factors that should help you determine whether to travel while in debt is the types of debt you have. Here’s a quick explanation of good debt vs. bad debt:

What is good debt? What is bad debt?
Improves your quality of life or net worth Does not improve your financial situation
Examples: mortgage, student loan, business loan Examples: credit cards, personal loans, auto loans

It’s also important to understand the difference between secured vs. unsecured debt. Secured debt—i.e., mortgage or auto loan—is guaranteed to your lender via collateral, like your house or car. Unsecured debt—i.e., credit cards, personal loans, medical bills—is solely based on your creditworthiness. If you’re going to risk missing payments on your mortgage and potentially lose your house to be able to pay for a vacation, maybe traveling isn’t such a good idea.

Don’t travel while in debt if you’re going to miss other debt payments.

How to travel on a budget

Let’s be real: One article you read on the interwebs is not going to make you put your travel plans on pause, regardless of the financial pickle it might put you in. So, if you’re going read about the consequences and do the thing anyway, here are some tips for how to travel while in debt.

  • Create a travel budget.

    Break it down by category: transportation, lodging, activities, food/drink, souvenirs, miscellaneous. Break your budget down day by day if you have to. With a set daily spending limit, you should be able to stick to your overall budget for the trip.

  • Research deals and local prices.

    How can you budget effectively if you don’t know what stuff is going to cost at your destination? Know what you’re getting into, and be sure to look for ways to save on how you get there, where you stay, and must-see attractions. You can also use savvy travel apps to help you plot out your journey.

  • Use travel rewards if you can.

    If you have a high credit card balance, please tell me you’ve at least been earning points as you spend. Plenty of credit cards reward you for spending, and you can use those points or miles to help fund your trip—and sometimes your points are worth more when you redeem them for travel. (I just used my points for a wedding in Minneapolis and didn’t pay a cent for my flights. 10/10 would recommend.)

  • Be open-minded.

    If you’re ballin’ on a budget, you need to stay realistic about what’s doable and what’s not. When you’re trying to spend as little as possible, you can’t be too picky when it comes to flight times, airlines, or even hotels/rentals. Sometimes, the cheapest option is best—and you may have to sacrifice comfort/luxury for financial peace of mind. These thrifty travel blogs can help you find creative ways to save money.

Plan way ahead, save wherever you can, and be flexible.

To travel or pay off debt? That is the question

Traveling should not put you in debt (or further in debt). But I know you might not be able to resist the temptation to book a trip for a change of scenery. So, the best you can do is build a budget to see if your plans are realistic and make sure your travel spending won’t get in the way of your debt repayment plan.

If your trip sets you back months in your debt snowball or if you’re going to miss payments on a debt consolidation loan, it’s best to postpone your travel plans. Though, if you can find ways to save up that don’t interfere with your debt payments, you might be able to travel and pay off debt—truly having your cake and eating it, too.