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Many Americans Plan to Charge $5,000 on Credit Cards to Vacation this Summer

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Enjoy Summer Travels Without Sacrificing Financial Stability

Summer vacations are a time to relax and recharge, but for many Americans, the financial aftermath can be a source of stress. According to a recent Fox Business article, a significant number of vacationers are racking up substantial credit card debt, with some planning to charge $5,000 or more. This article addresses the reality of vacation credit card debt and offers practical strategies for managing and reducing it, with insights from Money Fit, a nonprofit credit counseling organization.

The Reality of Vacation Debt

The Fox Business article highlights the growing trend of vacationers relying heavily on credit cards to fund their trips. Statistics reveal that 83% of travelers use credit cards for vacation expenses, and about 30% plan to finance at least $5,000. Shockingly, 7% anticipate charging $15,000 or more. This reliance on credit can lead to high-interest debt that becomes increasingly difficult to manage.

Did You Know?

According to the Federal Reserve, as of 2023, the average credit card interest rate in the U.S. is around 20%. This means that if you charge $5,000 on your credit card for a vacation and only make minimum payments, you could end up paying nearly $2,000 in interest over time.

The Consequences of High-Interest Debt

Carrying a balance on high-interest credit cards can have long-term financial repercussions. Interest charges accumulate quickly, leading to a snowball effect where debt grows faster than it can be paid off. This situation not only impacts one’s financial health but also contributes to stress and anxiety.

Money Fit’s Approach to Debt Management

Money Fit, with 28 years of experience in credit counseling, offers various services to help individuals tackle credit card debt. These services include Debt Management Plans (DMPs), personalized credit counseling sessions, and a wealth of financial education resources. Money Fit’s approach is designed to provide tailored solutions that meet each individual’s unique financial needs.

Money Fit’s Debt Management Solutions:

  • Debt Management Plans (DMPs): Reduce interest rates and consolidate payments.
  • Personalized Credit Counseling: Develop a tailored plan for your unique situation.
  • Financial Education: Learn how to budget, save, and make informed financial decisions.

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Practical Tips for Managing Vacation Spending

To avoid falling into the trap of vacation debt, consider these practical tips:

  • Plan and Budget: Create a realistic budget that accounts for all potential expenses, including travel, accommodation, food, and activities.
  • Use Rewards Wisely: Utilize cashback and reward points to offset costs, but aim to pay off balances in full each month to avoid interest charges.
  • Consider Local Destinations: Opt for closer-to-home destinations to reduce travel expenses.
  • Flexible Travel Plans: Use fare comparison tools and set alerts for the best travel deals, allowing flexibility in your travel dates.

Dealing with Existing Debt

For those already struggling with vacation-related debt, here are some strategies to consider:

  • Debt Consolidation: Consolidate high-interest credit card debt into a lower-interest personal loan to make repayment more manageable.
  • Debt Management Plans: Enroll in a DMP through Money Fit to benefit from reduced interest rates and a structured repayment plan.
  • Credit Counseling: Seek credit counseling from Money Fit to develop a personalized plan for managing and reducing debt.
  • Automate Payments: Set up automatic payments to ensure timely bill payments and avoid late fees.
  • Negotiate with Creditors: Contact creditors to discuss possible reductions in interest rates or payment plans that fit your budget.

Enjoying a vacation shouldn’t come at the cost of financial stability. By planning ahead, using credit wisely, and seeking support from organizations like Money Fit, consumers can enjoy their travels without compromising their financial health. Taking proactive steps towards managing debt not only relieves financial stress but also sets the foundation for a more secure and enjoyable future.

Remember, every small step towards managing your debt makes a difference. Whether it’s creating a budget, seeking professional help, or simply being more mindful of your spending, you have the power to take control of your financial journey. Your financial well-being is within reach, and with the right strategies and support, you can achieve the freedom and peace of mind you deserve.

Expert Assistance is Just a Call Away

For those looking for personalized assistance, Money Fit offers expert credit card debt relief and management services. Our team of experienced counselors is ready to help you develop a tailored plan that suits your financial needs. Whether you’re dealing with vacation debt or other financial challenges, we are here to support you every step of the way.

For more information and resources on managing credit card debt, visit Money Fit’s website. Explore our comprehensive range of services designed to help you take control of your finances and achieve financial freedom. From debt management plans to educational resources, Money Fit provides the tools and guidance you need to overcome debt and build a brighter financial future.

Don’t let vacation debt hold you back. Take action today and discover how Money Fit can help you regain control of your finances. Contact us to schedule a free consultation with one of our experienced credit counselors. Together, we can create a path to financial wellness and ensure that your vacations are filled with joy, not debt.

Additional Resources

For further assistance and tools to help you manage your credit card debt and plan your vacations responsibly, check out the following resources from Money Fit:

About the Author

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Rick Munster

Rick Munster is a personal finance expert and author with over 21 years of experience in the credit counseling industry. He currently serves on the board of directors for the Financial Counseling Association of America and has written over 200 articles on personal finance. Rick's expertise has been recognized by several prominent online organizations, which have quoted him on issues related to credit counseling, debt management, and financial education. With more than 20 years of experience at Money Fit, a non-profit credit counseling organization, Rick has established himself as a trusted authority in the field of personal finance.
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NOTE: This sheet is to inform new or returning clients about our services, records, fees, and limitations that may affect you as a consumer of our services. This form also discloses how we might release your information to other agencies and/or regulators. If you do not understand a statement, please ask a Debt Reduction Services (DRS) counselor for assistance.

Debt Reduction Services, Inc. (DRS) has put into place policies and procedures to protect the security and confidentiality of your nonpublic personal information. This notice explains our online information practices and how we use and maintain your information to conduct our financial education and credit counseling sessions and to fulfill information and question requests. This privacy policy complies with federal laws and regulations.

To provide our financial education and credit counseling services, we collect nonpublic personal information about you as follows: 1) Information we receive from you, 2) Information about your transactions with us or others, and 3) Information we receive from your creditors or a consumer reporting agency. We do not share this information with outside parties.

We use non-identifying and aggregate information to better design our website and services, but we do not disclose anything that could be used to identify you as an individual.

You hereby authorize DRS, when necessary, to share your nonpublic personal, financial, credit, and any information that you provided (including any computations and assessments produced) with the following entities in order to help DRS provide you with appropriate counseling or guide you to appropriate services: third parties such as government agencies, your lender(s), your creditor(s), and nonprofit housing-related and other financial agencies as permitted by law, including the U.S. Department of Housing and Urban Development.

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Debt Reduction Services, Inc. complies with the privacy requirements set forth in the HUD housing counseling agency handbook 7610.1 (05/2010), including the sections 2-2 Mc, 3-1 H(2), 3-3, 5-3 F, and Attachment A.5. At all times, we will comply with all additional laws and regulations to which we are subject regarding the collection, use, and disclosure of individually identifiable information.

  1. Services: DRS provides the following housing-related services: counseling that includes Homeless Assistance, Rental Topics, Pre-purchase/Homebuying, and Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase); Education courses that include Financial literacy (including home affordability, budgeting, and understanding use of credit), Predatory lending, loan scam or other fraud prevention, Fair housing, Rental topics, Pre-purchase homebuyer education, Non-delinquency post-purchase workshop (including home maintenance and/or financial management for homeowners), and other workshops not listed above.

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  1. Limits: Our services are limited to our normal weekday business hours. We do not provide individual counseling or education services after hours or on weekends, although our education courses are available 24/7.
  2. Fees: We do not charge fees for our financial management counseling and education. However, if you use them, you may have to pay for our Debt Management Program, Student Loan Counseling, Bankruptcy Certificate Services or certain financial education courses (homebuyer education, rental topics, fair housing, predatory lending, and post-purchase-non-delinquency including home maintenance and/or financial management for homeowners).
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Disclosure to Client for HUD Housing Counseling Services

Debt Reduction Services, Inc. and its financial education arm, Money Fit by DRS, offer the following housing counseling and educational services related to housing, personal finance, and bankruptcy certificates to consumers:
  • Housing Education Courses: DRS offers many online self-guided education programs classified as Financial, Budgeting, and Credit Workshops (FBC), Fair Housing Pre-Purchase Education Workshops (FHW), Homelessness Prevention Workshops (HMW), Non-Delinquency Post Purchase Workshops (NDW), Predatory Lending Education Workshops (PLW), Pre-purchase Homebuyer Education Workshops (PPW), and Rental Housing Workshops (RHW). These courses help participants increase their knowledge of and skills in personal finance, including home affordability, budgeting, and understanding the use of credit, as well as predatory lending, loan scams, and other fraud prevention topics, fair housing, rental topics, pre-purchase homebuyer education, non-delinquency post-purchase topics including home maintenance and/or financial management for homeowners, homeless prevention workshop, and other workshops not listed above relating to personal finance and housing. Course details are found below under “Housing Workshops.”
  • Home Equity Conversation Mortgage (HECM) Counseling (RMC): Via telephone and virtual platforms, we offer the required HECM counseling nationwide in addition to in-person counseling in Boise, Idaho. We also offer in-home counseling options in thirty counties across southern Idaho for an additional fee to cover our travel and additional staff time costs.
  • Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase) (FBC): Clients receive counseling and materials on the proper maintenance of their home and mortgage refinancing. Clients can find help and resources by phone, in our Boise office, or virtually on all topics related to stabilizing their long-term homeownership.
  • Services for Homeless Counseling (HMC): Clients receive phone, virtual, or in-person (Boise) counseling to evaluate their current housing needs, identify barriers to and goals for housing stability, establish a path to self-sufficiency, and connect with emergency shelters, income-appropriate housing, and/or other community resources (e.g. mental healthcare, job training, transportation, etc.).
  • Pre-Purchase Counseling (PPC): Clients receive counseling through the entire homebuying process. Assistance may involve creating a sustainable household budget, understanding mortgage options, building their credit rating, and putting together a realistic action plan to set and achieve homeownership goals.  Additionally, clients will receive materials and resources about home inspections and other homeownership topics relevant to successfully maintaining a home.
  • Rental Housing Counseling (RHC): Via phone, in-person appointments (Boise, ID), or virtual platforms, clients receive housing counseling relevant to renting, including rent subsidies from HUD or other government and assistance programs. Topics can also address issues and concerns having to do with fair housing, landlord and tenant laws, lease terms, rent delinquency, household budgeting, and finding alternate housing.
DRS also offers the following services:
  • A Debt Management Program (DMP) for consumers struggling to pay their credit cards, collections, medical debts, personal loans, old utility bills, and past-due cell phone accounts;
  • The Budget Briefing and Debtor Education Certificates that are required during the Bankruptcy filing process;
  • A Student Loan Repayment Plan Counseling and application service.

Relationships with Industry Partners

Through such services, DRS has established financial relationships with hundreds of banks, credit unions, and creditors such as American Express, Bank of America, Barclays, Capital One, Chase, Citibank, Credit One, Discover, Synchrony, US Bank, USAA, Wells Fargo, and others.

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The client is not obligated to receive, purchase or utilize any other services offered by DRS or its exclusive partners to receive financial education or housing counseling services. Alternatives: As a condition of our counseling services, in alignment with meeting our client services goals, and in compliance with HUD’s Housing Counseling Program requirements, we may provide information on alternative services, programs, and products available to you, if applicable and known by our staff. Alternative DMP services include negotiating better repayment terms directly with your individual creditors, paying your debts as agreed, or, in extreme cases, filing for personal bankruptcy. Alternative credit and education services can be found through MyMoney.gov or the Jump$tart Clearinghouse of online financial education resources. Housing counseling alternatives can be found through HUD at www.hud.gov/findacounselor.
Finally, you understand that you may revoke consent to these disclosures by notifying DRS in writing.
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Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

Rental, Fair Housing, Predatory Lending / HOEPA, Post-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. credit, budgeting, homeless prevention, debt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).

Close

Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

Rental, Fair Housing, Predatory Lending / HOEPA, Post-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. credit, budgeting, homeless prevention, debt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).