ROCKVILLE, MD - The average summer vacation will cost $2,274, according to a telephone survey sponsored by Myvesta.org, formerly Debt Counselors of America ®. Of the 1,000 people surveyed, 55 percent said they planned to take a vacation this summer.
"Based on the average take home pay of $27,219*, a person will have to work more than a month, or 22 working days, to pay off their summer vacation," said Mike Kidwell, vice president and co-founder of Myvesta.org, a nonprofit financial solutions organization. "Spending $2,274 means that the average person will use more than 8 percent of their annual income on vacation."
"It's no wonder that almost three-quarters of vacationers will use a credit card to pay for their trip," Kidwell said. The survey found that 73.6 percent of respondents will use a credit card to pay for their summer holiday.
"Credit cards have pros and cons," Kidwell said. "They offer tremendous convenience and protection for travelers, but people tend to overspend when they use a credit card."
Of the vacationers using their credit cards, 56.7 percent plan to pay their balance off in full when the bill arrives. "For many people that's wishful thinking," Kidwell said. "Too often people pay just the minimum payment, not realizing how much the interest will add to the total cost of a vacation."
Based on today's average interest rate of 17.99 percent, paying just the minimum payment extends the credit card payments, for this year's vacation alone, to 34 years and adds $5,974 in interest. The 2 percent monthly minimum payment starts at $45.48.
By bumping up the monthly payment to $208 and keeping it there, the debt would be paid off in 12 months with a total interest cost of only $227. Thirty-five percent of those surveyed said they plan to pay off their vacation bills in twelve months or less.
To help everyone save money on vacations, Myvesta.org has created a free, downloadable publication outlining the best cost cutting ideas called "How to Come Back From Vacation With Money in Your Pocket."
Other vacation survey findings:
"Sometimes we all just need to get away for a vacation," Kidwell added. "But vacations can be expensive, and the last thing you want is to come home to a big credit card bill."
(*According to the U.S. Census Bureau, the average income in 1998 was $38,885. We subtracted federal, state, Social Security and Medicare taxes to get an average take-home pay of $27,219.)
Myvesta.org is a national, nonprofit financial solutions organization headquartered in Rockville, Md. Founded in 1994, Myvesta.org has helped more than four million people through its programs and educational resources. The organization is committed to helping people resolve past financial mistakes, manage current financial responsibilities and find financial peace of mind. Myvesta.org's programs and services include debt management, crisis resolution, online bill management, creditor problem resolution, coaching and Financial Recovery tm counseling. Prior to April 2000, Myvesta.org was known as Debt Counselors of America ®.
Copyright © 2000, Myvesta.org. All rights reserved.
