In the previous article, we talked about some recent surveys of people going into debt to be able to afford a vacation. That’s all really abstract, so now let’s look at what it would mean to put your summer 2026 vacation on a credit card and not fully paying it off by summer 2027.

According to NerdWallet, the average vacationer will spend just under $4000 for their summer 2026 travel plans. According to Forbes Magazine, the average interest rate on a credit card in July 2026 is just over 25%.

Now let’s consider three scenarios. We like round numbers, so let’s say a family spent $4000 on their summer 2026 vacation and traveled in July.

In the first scenario, the family put the entire cost of the vacation on their credit card that has an average interest rate. They will make minimum monthly payments until that vacation is paid in full.

What will those monthly payments amount to, how long will it take to pay the vacation off, and how much in total will they end up paying?

In the second scenario, the family will make equal payments for an entire year and pay off the vacation debt by July 2027. How much would they be paying a month and how much in total would they end up paying for their vacation?

In the third scenario, the family set aside money in a special savings account at a local credit union a year in advance to save up for their summer 2026 vacation.

What has their summer 2026 vacation actually cost in each of these three scenarios?

First Scenario: Minimum Monthly Payments
In the first scenario, the family has $4000 in credit card vacation debt with the average interest rate of 25%, making the minimum monthly payments each month. Here are the results using the Credit Card Minimum Payment Calculator from Forbes Magazine:

According to Forbes, the family would have to make 265 monthly payments, starting at just over $123 per month. After more than 22 years paying off the vacation, the family will have paid $7652.69 in interest. That vacation will have cost $11,652.69 in total.

Second Scenario: Paying It Off in One Year
In the second scenario, the family put the entire $4000 vacation on their credit card, which had the average interest rate of 25%. For this scenario, we’re using the Credit Card Payoff Calculator at Bankrate.

Here the family is going to end up making monthly payments of about $380 and pay off the debt in 12 months. They would end up paying roughly $562 in interest, for a total of $4562 on their summer vacation. That’s certainly better than the first scenario!

But it’s still an extra $562, and that’s if the family manages to pay it off in a year. And as we saw in the previous article, there’s no guarantee that 12 months is all it will take.

Third Scenario: Vacation Savings Account at a Local Credit Union
In this third scenario, the family opened a special savings account at a local credit union back in the summer of 2025. The account is specifically to save money to pay for a vacation. The family decided to set aside just over $333 per month, so they would have $4000 for their summer 2026 vacation.

When it came time to book their vacation, they withdrew just enough of the money to pay for a deposit. Then they paid the rest the rest of it when the final payment was due. They still put the vacation on a credit card, specifically one that earns reward points on their favorite airline.

They immediately paid off their credit card bill because they were able to save enough money the year before. So they still got all the points and will put those points towards the flights on their next vacation.

The family in the third scenario set aside $333 per month for a year, while the family in the second scenario ended up paying $380 per month for a year. The family in the first scenario only had to pay $123 per month, but they ended up having to make 265 monthly payments!

Which of these scenarios would you prefer? We hope you say #3. That’s the one we like best.

In the next article, we’re going to talk about some of the accounts at local credit unions that offer ways to help people save money for vacations. The bigger challenge is actually being able to save money.

We love vacations, and helping other people explore the world. It’s literally what we do! Let’s explore together! Here’s to a vacation debt-free 2027!