Millennial Money: Young adults traveling on fiscal thin ice

Could this be the year that pandemic-related “revenge travel” turns into “regret travel”?


Apr 18, 2023, 1:42 PM

Updated 453 days ago


Millennial Money: Young adults traveling on fiscal thin ice
Prices for travel remain stubbornly high. The cost of airfare in February was 27% higher than the same month a year earlier, according to U.S. Bureau of Labor Statistics data. And rental car prices - having shot up during the pandemic - remain high today, as they’re 37% pricier in February than they were in the same month in 2019. 
Yet costlier travel is not deterring younger Americans who are eager to hit the road (and the skies) this year. A whopping 87% of 18-to-29-year-olds and 90% of 30-to-44-year-olds intend to travel this summer, according to a March survey by The Vacationer. If the economy is slowing, younger travelers aren’t heeding the memo.
“When I meet with folks, they’re not budgeting,” says Dylan Snowden, a financial coach . “Most will just think about hotels and flight, but not the fact that they need to feed themselves three times a day.”
Ignoring the broader economic trends (like the rising cost of eating out) could mean stormy financial waters ahead for these vacationers. On top of inflation, savings are down, debt is up and the economy could be headed for a recession. Add the potential for student loan payments restarting this year, and a dire picture begins to emerge for those under 40.
Could this be the year that pandemic-related “revenge travel” turns into “regret travel”?


As savings that built up during the pandemic begin to dwindle , vacationers facing high travel costs have two choices: cut costs or turn to debt. And it seems that younger Americans are opting for the latter.
Generation Z accrued 6% more credit card debt between the first and second halves of 2022, according to a January 2023 report from Credit Karma, while millennials racked up 5% more. Baby boomers added only 2% more credit card debt over the same period.
“Since people don’t budget, they underestimate how big their debt will be,” says Snowden. “They don’t leave on those trips expecting to go $7,000 in debt, but then they do.”
And younger Americans are struggling to pay these debts off. The rate of credit card delinquencies has risen significantly for Americans in their 20s and 30s, surpassing pre-pandemic rates, according to a 2023 report from The Federal Reserve Bank of New York. Not so for older Americans, whose delinquency rates have remained relatively flat.


Another potential factor in costlier travel: the rise in popularity of “buy now, pay later” for travel expenses . These services split payments over installments, easing sticker shock for airfare and hotel stays while creating more debt by another name.
“Somebody doesn’t sign up for Klarna just one time,” says Snowden, citing a popular buy now, pay later service. “They’ll do it for multiple purchases, so that debt will grow.”
Buy now, pay later has proven especially attractive among younger consumers. A n August 2022 NerdWallet survey conducted by The Harris Poll found that 50% of millennials and 44% of Gen Z had used one of these services in the last 12 months, compared with 25% of Generation X and merely 14% of baby boomers.
Mounting debt and deferred payments could hit travelers hard, especially as layoffs increase and some economic forecasters predict a recession later in the year. And another $1 trillion shoe could still drop: student loans.


The average student loan debt for borrowers ages 35-49 is $43,280 and $32,750 for the 25-34 age range, according to 2023 data from the U.S. Department of Education’s Federal Student Aid Office. Yet these loans have not had a major impact on finances because the pandemic-era pause on payments remains in effect.
“It’s been so long since people have had to think about it,” says Snowden. “It’s really hard for folks to realize that it might actually start up again.”
Yet those payments could resume soon - possibly by late summer. This could create a perfect storm of financial pressure, as mounting debt mixes with a weak economy and increased student loan payments.


Is it all doom and gloom for young travelers? Not necessarily. Some may still be working through savings surpluses. And the labor market remains strong , buoying incomes.
Experts suggest young travelers take a hard look at their finances before booking another vacation this year and potentially accruing more debt.
“Save now, vacation later,” implores Snowden. “You’ll enjoy every minute of that vacation and not stress when you come home to a big bill. You deserve to feel good about it before you go, when you’re there and when you come back.”
This column was provided to The Associated Press by the personal finance website NerdWallet. Sam Kemmis is a writer at NerdWallet. Email:
This 2023 Summer Travel Survey was conducted by SurveyMonkey on behalf of The Vacationer. In total, 1,017 Americans over the age of 18 were polled on March 1 to March 2. Of those surveyed, 46.02% were male and 53.98% were female. The age breakdown of participants included in this survey was 22.32% in the range 18-29, 26.55% in the range 30-44, 26.35% in the range 45-60, and 24.78% over 60. This survey has a confidence level of 95% and a margin of error of ±3.136%.
The Vacationer. (March, 2023). “Summer Travel Survey & Trends 2023 - Nearly 85% to Travel, 42% to Travel More than Last Summer, More than 54% to Fly on a Plane, 100 Million to Road Trip Over 250 Miles.”
The analysis used the Consumer Credit Panel (CCP), which is based on anonymized credit reports from Equifax. The panel uses a random sample of individuals over the age of 18 to compute nationally representative estimates of the levels and changes in various aspects of individual and household liabilities.
Liberty Street Economics. (February, 2023). “Younger Borrowers Are Struggling with Credit Card and Auto Loan Payments.”
This report drew on 78.2 million Credit Karma users who had been active on the site within the last 36 months. All aggregate data analyzed was pulled on Jan. 6, 2023, and came from members’ TransUnion credit reports. Averages were based on information from the previous 90 days.
Credit Karma (March, 2023). “Credit Karma’s State of Debt and Credit Report.”
This online survey was conducted in the U.S. by The Harris Poll on behalf of NerdWallet from Aug. 4-8, 2022, among 2,065 U.S. adults ages 18 and older. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.8 percentage points using a 95% confidence level.

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