How to Avoid Over Spending on Vacation

Part VII of the Credit Card Series: Start at the beginning if you missed a part.

credit cardsThe number one consideration for choosing a vacation destination is affordability. Before you give in to the convenience of paying for everything with your credit card, learn how to stay out of debt.

Three out of four Americans pay for their vacations with credit cards. Of those three credit card vacationers, at least one will take more than three months to repay the charges on the card. Meet John P. Creditcardholder. He is in specific danger of spending more than he can affordHow?

The Package

John found a perfect vacation package: 4 days and 3 nights in a resort and air fare is $1,800. He reserves it with his credit card, knowing he can spend $470 per month for the next four months without straining his budget. Or can he?

The Extras


One for him, one for her, one for me…

To save on cab fare, John rents a car and hands his wife the credit card to shop. He has now spent another $400 before she buys anything.

She has spends $300 on souvenirs and $50 on food and snacks for herself and the children. The family goes out to dinner and a show: $120. Before nightfall, John’s affordable vacation sports a price tag of $2,670.


The next two days inside the resort have a meager price tag of just over $200, spent on food and small purchases, like items the family forgot to pack. The resort has quietly charged his credit card: 12 telephone calls his daughter made back home– $24 plus taxes, booking fees and concierge gratuity of $170.46.

Time to go Home

Before returning the rental car, John takes the family to see some local sights, out to lunch, on a tour and to a museum for $180. He tops up the car with gas for $25 and returns it. He has gone over the mileage limit and pays a $40 fee.

Restful Vacation?

John comes home confident he has pulled off the perfect, budget-minded vacation. When the credit card statement arrives, the total for a $1,800 vacation is $3,400.

He was going to stretch the budget to pay $470 for four months. He can only consistently pay $420. It will take nine months to pay off his vacation plus interest.

Not Me!

Avoid John’s mistakes. Finance your vacation or cut vacation expenses altogether:

  • Negotiate a vacation loan with your bank. Loan rates are significantly lower than credit card interest rates. Many loans have a free debit card, making the funds available like a credit card.
  • Purchase a no-fee credit pre-paid card. Before the vacation, pay each month to increase the balance available. Use this for incidental purchases.
  • Purchase a traveler’s check card. Similar to paper traveler’s checks, you deposit money onto the card to be used as a credit card. Use this for extra expenses.
  • Inclusive packages may seem more expensive at first glance. Add the charges you would spend on food and entertainment to your travel package to gauge the real savings.
Samsung digital camera

Say, “Cheese!”

  • Invest in a digital camera. Create memories and archive the photographs each day rather than buying something in each gift shop. Give photo enlargements or scrapbook photos as souvenirs to friends and family.
  • Cut the distance you travel. Find a destination offering similar attractions closer to where you live. When possible, cut air fare from your vacation.
  • Cut your food budget by packing snacks and water for day trips rather than buying on the fly with a credit card.
  • Travel with friends or family.
  1. Share the expense of subletting a time share, house or condo rather than renting a hotel.
  2. Buy groceries and prepare meals in the house rather than eating out.
  3. Get group discounts when visiting attractions.
  4. Pay with a check or cash when possible.

NEXT: What you should never put on your credit card

What do you do to save money on vacation?


© Red Dwyer 2011
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  1. I feel like I always say something regarding our budget! Here it is again. We have a “vacation budget.” Yes, we have a budget for entertainment, gift-giving, vacation, car repairs, and just about everything. As for as the vacation budget, we PLAN, PLAN, PLAN. We start saving for holiday travels months in advance. Last year, after my hubby received his doctorate, we went on a cruise. I think we saved for that trip for at least a year and a half! We also keep ALL of our receipts when on vacation. This helps reign in our spending and keep us on track. I think it’s all about the budgeting! We have also vacationed with family/friends and that is definitely cheaper.

    • And I love your budget comments!! Great point about saving all year. I have a line item in my budget (right after MAD money and “girly things”) which is “We are outta here!” Even if you just save $100, it makes for $1,200 you can spend when the time comes. If you read Credit Cards Part V (, you can use the “Lump Sum” to help you get to your vacation allowance faster…or to have a grander vacation. Thank you! Red.

  1. How to Avoid Over Spending on Vacation | Finance Made Personal |

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