How to Avoid Vacation Credit Hangover

Written by The Credit People
How to Avoid Vacation Credit Hangover

By The Credit People

It’s summertime and for most that means vacation. Getting away on vacation can be great, but if you’re not careful you can suffer from the dreaded vacation credit hangover. A vacation credit hangover is overspending while on vacation so much that taking care of the debt that follows afterward can become a real financial burden.


There are times of the year, like during the holidays, when we know we will be spending more than regular day-to-day living expenses. And if we’re careful and plan for this higher level of spending we reduce the risk of having it come back to us later in a way that’s difficult for us to manage.


The primary area of concern when looking to avoid vacation credit hangover is accumulating debt during your travels. Having too much debt can potentially hurt your credit in two primary ways:



  • If your debt to available credit percentage gets too high.
  • The additional debt makes it more difficult for you to make your monthly payments.


Your level of debt and payment history are huge factors in determining your credit score. Here are a few ways you can ensure your vacation doesn’t lead to a credit hangover.


Have a budget


Well in advance of the vacation trip you should work out roughly what activities and purchases you would like to make during that time. It’s easy enough to estimate most of this with a little Internet research about hotel, travel, and destination event expenses. On top of that estimate your daily expense for food, parking, and general miscellaneous costs you’re likely to incur. This is your budget that you’ll want to stick to while on vacation.  


Try to develop this budget as far in advance as possible. That way you can begin saving for the vacation early. One of the best things you can do for vacation planning to avoid a credit hangover is to base your spending on the savings you’ve done for the vacation. The problems with a vacation credit hangover come with the excessive use of credit – which is essentially borrowing money from a lender. You can avoid all of that if you limit your spending to what you’ve saved, and not incur expenses that lead to an accumulation of debt.


Look for deals


Finding good deals on travel, events, food, can substantially reduce your overall vacation expense. With the budget you’ve established above you’ve got a good idea of the type of expense you will be incurring. Go through the discounts sites online, like a Groupon, to see if you can find deals on any of those items where you’ll be. And there are many travel sites these days that specialize in finding discounted flights, hotel room and rental cars. And often when you bundle them together you can increase the total discount.


Watch out for hidden expenses


The other side of the coin from discounts are hidden expenses. Definitely want to be conscious of where those can pop-up and avoid them where possible.  Some instances of hidden expenses can be with cost of exchanging money when traveling abroad. Many services at the airport, and our own credit cards, can charge a premium for changing our dollars to pounds. Look for credit cards that with no charge and it can save a great deal of money on your trip.


Also it’s generally a good idea to avoid the use of room service whenever possible and eat out instead. A room service meal can often be twice as expensive as that same meal at a nearby restaurant.


Do things for free


Not every activity on a vacation has to have an expense associated with it. In fact, some of the best things you can do in a vacation destination cost nothing. Things like parks, some museums, or just getting to meet others while on a walk can be the most fun, and cost nothing. Try to schedule time for activates that don’t have an expense can add enjoyment and will definitely help with your vacation budget.


Use your credit card wisely


It can be a good idea to just use cash to pay for your expenses while on vacation. Unlike the use of a credit card, you reallyfeel the expense you’re paying for when you use cash. This effect can reduce the temptation to spend more freely – which would reduce your overall expenses. But these days it’s just not that convenient to use cash for everything. If that is the case for you, then try to use your credit card as if it is cash. Keep in mind this is an expense that you will have to pay back, and has the same financial impact as those dollars from your wallet.


One real advantage for using a credit card when on vacation are the points you can accumulate. In fact, many cards will increase the points they give for travel related expenses. The points gained from those charges when applied against your credit card bill can reduce your total vacation expense.


Vacations are a time we all look forward to each year which allows us to be together and having fun with those closest to us. If we do some planning in advance we can ensure we have a great time, and definitely avoid vacation credit hangover afterward.



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