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With Memorial Day just around the corner, Washingtonians are getting ready for summer and its blazing heat, suffocating humidity, eager interns, millions of cicadas and, above all, summer vacation plans.
Unfortunately, while vacation plans may vary from the cheesy fun of Dewey Beach to the tasty cheese of France, the end result of most vacations is the same: debt.
Last year, the average summer vacation cost nearly $2,500. With a strong stock market and upbeat economic news, experts predict that number will rise this year. If history is any gauge, about three out of four people will pay for all or part of their getaway with credit cards, and nearly one in three people plan on taking three or more months to pay off their vacation charges.
If every bit of that $2,500 were charged on a credit card with an annual percentage rate of 18 percent, the cost of the vacation would rise to $2,750 if paid back at over the course of a year. If it takes you two years to pay off the debt, you’ll end up paying $500 in interest.
Now, I’m not saying you shouldn’t use a credit card while traveling. Credit cards provide a convenient way to track your spending, make hotel reservations and have financial security while on the road. But a credit card shouldn’t be used to finance a vacation you can’t afford.
If you can’t afford that vacation today, what makes you think you can afford it later when the credit card bill hits — and hits with interest on top.
Here are a few tips for avoiding that vacation hangover this fall:
If you were thinking of going to France, don’t be afraid to switch destinations to another European country, such as Italy, if you can get a great deal. Being flexible on airports can pay off, too. Sometimes it’s 30 percent or more cheaper to fly to an outlying airport and complete the journey by shuttle bus or rental car.
You also should investigate discounts and upgrades. Are you a member of AARP, AAA or — heaven help you — the American Bar Association? Many hotels and car rental agencies give discounts to members of associations.
Even if you’re not a member of a group, ask for a discount or an upgrade at no extra cost. Often businesses will throw in perks such as a hotel room with a better view.
Remember that while everyone needs a vacation from time to time, no one needs a huge bill when they return home. Except maybe the credit card companies.