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:
- Start by asking yourself how much can you afford to spend on a vacation. If you still have them, dig out the credit card bills from last year. Those bills might shock you into taking a lower-cost vacation this year. Really add up how much you spent. How long did it take to pay off your vacation? You may need a vacation, but ask yourself: Is racking up more debt going to stress me out more when I return?
- Look to cut transportation costs. Take the time to hunt for good bargains on low-cost flights. If you're flying, call the different airlines directly and, of course, check travel Web sites, such as Orbitz and Expedia. Consider traveling during non-peak times.
- Be flexible. You can save money if you have leeway on when you can travel or don't have your heart set on a particular spot.
- Hit ‘em where they ain't. Visit spots in the off-season and reap savings as businesses lower their prices to attract vacationers. Right now is a surprisingly good time to go to the Caribbean. They have some of the best weather there in May and June.
- Shave your lodging costs. For many travelers, lodging accounts for one quarter of their vacation costs. Instead of the four-star hotel, maybe you can stay at a family member or friend's home. Also, use the Internet to check out classified ads for time-share property for rent in the local newspaper.
- Go easy on the entertainment. I'm always amazed at people who attempt to jam in as many activities into a vacation as possible. Relax. Don't try to do too much while you're on vacation. Enjoy some down time. Stay away from the malls. Keep your visits to the theme parks to a minimum. Instead, opt for free or low-cost outdoor activities.
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.