Millions of Americans can't go on vacation this winter due to debt

It will be a long winter for millions of Americans who cannot afford to ski on the snowy slopes or lie on a sunny beach during their winter holidays.

Фото: Depositphotos

About 33 million Americans, many of them millennials (born between 1981 and 1996), will stay home this winter due to financial stress, according to a new WalletHub survey. Writes about this New York Post.

“It should come as no surprise that 33 million Americans cannot afford to travel this winter,” said WalletHub CEO Odysseus Papadimitriou. “Even with the unemployment rate near record lows and the stock market at record highs, many factors are putting financial pressure on consumers.”

Papadimitriou said many Americans are "accumulating credit card debt at a pace reminiscent of the lead-up to the Great Recession" - referring to the global economic crisis of 2008, when millions of credit card holders, many of whom suddenly found themselves unemployed, were unable to pay their bills.

“And student debt is clearly an issue,” he added.

On the subject: The total debt of Americans reached a record level

Another study by NerdWallet showed that many of those Americans who still hope to go on vacation this holiday season still pay off last year’s debts.

“One in 12 Americans who paid for their travel expenses in 2018 with a credit card are still paying them off,” says Kimberly Palmer, personal finance expert at NerdWallet.

“Nearly two-thirds of people who spent money on airfare and hotels during the 2018 holiday season spent more than they planned, with some taking the money from their savings or using their credit card to cover additional expenses,” she added.

Part of the problem is that about 40% of Americans “would rather go into debt paying for a vacation than spend the holidays with their family.”

The report indicates that average vacation costs paid with credit cards amounted to 1105 dollars.

According to Charles Hughes, a financial adviser in Bayshore, NY, cardholders, especially young ones, should "understand how destructive credit card interest is and how it will harm them in achieving long-term goals."

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There is also a generation gap that affects the use of credit cards.

Amanda Templeton, a professor of business at the University of Southern Utah, noted the difference in income and expenses between generations. According to her, this is one of the reasons why many millennials will not be able to travel this holiday season. But if they do decide, then often trips will be paid in debt.

According to Templeton, baby boomers (born between 1946 and 1964 years) usually pay for trips in cash, while millennials often use credit cards to finance trips.

And millennials are “more likely to pamper themselves.”

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