10 million Brits are prepared to borrow money to pay for their holiday this year, even if it means racking up debts to do so.
One in three UK adults will resort to borrowing with their credit cards, tapping their friends or family for a loan or using a travel agent payment plan to pay for their holiday this year, according to new research.
Over half of these people will not have the money available to pay back their loans in full, so they will be paying interest charges on the borrowed money for months to come. For credit card borrowers alone this could add over £100 to their holiday costs for each month it takes to repay the balance, based on the average holiday costing £1,231 and the average credit card APR of 18.7%.
As it often takes at least two months to pay off holiday credit card debts, this can add a further £200 to the cost of the vacation.
When questioned about why they would be prepared to borrow money to go on holiday, 13% said that they have to take a holiday every year, come what may. Another 13% of respondents said that said they had to be seen by their friends to be taking a holiday every year.
As Roger Edwards, proposition director at Bright Grey, who undertook this research, said:
“Getting away on holiday can be a high point of the year for many people, however with one in three borrowing to pay for their getaway, it is important to make sure they don’t end up with a financial holiday hangover on their return.”
“Planning ahead for the future financially can help avoid using expensive emergency measures to cover them for the short-term and also mean that everyone can enjoy the sun without the grey cloud of debt hanging over their heads.”