Taking on debt to finance a more expensive lifestyle was something unheard of in previous generations. Most people were actually raised to live below their means and save up for retirement. The Gen Z crowd is living for today, and one of the things that they want to do while they’re still young is travel. Taking that perspective, it may actually make a lot more sense to take on debt to travel. There are certain experiences that people of a certain age are going to be able to take part in, but they won’t be the same once their 50s and 60s roll around.
According to a survey conducted by Bank of America, around 20% of all Gen Z participants are planning an international trip this summer. That percentage is considerably higher than the next highest generations. Only 10% of millennials said that they were willing to go abroad this summer. The numbers go downhill from there with Gen X, Baby Boomers, and traditionalists. There’s not even an uptick with the retired crowd in the Baby Boomer generation that could be more active at their particular ages.
Gen Zers are also taking more vacations and going on longer trips than years prior. Around 15% of them also say that they are willing to spend more on their vacations. That could be a situation where they don’t have much of a choice. With travel getting more expensive, it’s certainly harder to stay on the same budget and try to travel more than years prior. When it comes to how they’re going to pay for their vacations, many Gen Zers and Millennials are willing to go into debt to afford this luxury.
According to another survey, this one from Bankrate, up to 42% of those traveling are willing to go into debt to afford their trip. The number actually increases to 47% amongst millennials. They are the generation that’s, in essence, more willing to take risks to be able to live out their travel dreams. Ted Rossman senior analyst at Bankrate, who conducted the survey, mentioned,
“I don’t want to tell people they can’t have any fun, but I do worry about taking on debt for discretionary purchases such as vacations, especially with credit card balances and rates at record highs,”
Speaking of credit, most people plan to pay for their vacations with credit cards. Up to 26% of the people willing to go into debt for a trip will be doing so by paying with their credit cards and dealing with the payments later. Around 8% of those polled will be enrolled in buy now pay later schemes. These are seemingly run through a third party, not necessarily a credit card company. Perhaps the most concerning of the bunch is the 5% of people who mentioned they are willing to take out personal loans to go on a trip. Borrowing money from family was another popular answer. Technically, that wouldn’t necessarily put people in “actual” debt that could compromise their financial futures. The thrill of travel is pushing young people toward making perhaps unwise financial decisions.
