Travelers Turn To Debit, Not Credit, When Paying For Vacations
When you’re booking a trip, how do you prefer to pay for it? If you said debit card or cash rather than credit card, you’re not alone.
A recent survey found that the majority of Americans avoid using credit cards to pay for vacations—even though doing so means missing out on potentially huge rewards from travel credit cards. Finance startup Affirm surveyed 1,039 people ages 18 through 72, asking them about their preferred payment methods when planning vacations.
Finances can make vacations stressful
Forty-seven percent of survey respondents said that planning travel stresses them out, although a similar number—nearly half—say the reason for taking a vacation in the first place is to “rest and relax.” The source of that stress, said 57 percent of respondents, is figuring out how they’ll afford the trip.
Fifty-five percent said they prefer to have the entire cost of the trip paid off before they leave; this is presumably the reason some folks avoid using a credit card. A debit card or prepaid card allows people to pay for things up front and never risk getting into debt over their heads.
The expense of a vacation can sometimes outweigh the fun; 32 percent of those surveyed said they regretted taking a vacation afterward because of lingering anxiety over the cost. And 57 percent of all those surveyed said they’ve canceled a trip they wanted to take because of money concerns.
Co-branded rewards cards offer benefits that debit cards can’t
Young people, in particular, are missing out of the rewards that co-branded travel credit cards offer. Sixty-five percent of people under age 35 don’t use credit cards at all, the survey revealed. When paying for travel, 34 percent of all respondents will use a debit card and 21 percent said they would rely on cash.
The problem with using cash, debit cards, or prepaid cards to pay for vacations is that those consumers miss out on rewards like frequent flyer miles, free hotel reward points, and cash back. They also don’t get things like free bag check on airplanes, discounts on in-flight purchases, access to airport lounges, and priority boarding.
The survey was conducted online by research firm Qualtrics between May 25 and May 29, 2018.