Back from summer vacation with debt: delete it before the winter holidays

If you’re like millions of Americans, you recently returned from a much needed vacation. TransUnion’s 2023 Spring and Summer Travel Report found that 46% of survey respondents planned to travel more this spring and summer than they did last year. As for how people would pay for their trips, 57% said they’d be using their credit cards.

[Read: Best Travel Rewards Credit Cards.]

With the traditionally expensive winter holidays on the horizon, eliminating summer travel debt will free you up for holiday spending. Quick deletion will also prevent excess financing fees from escalating the final cost, too.

Here’s how to delete summer vacation debt from your balance sheet in three months or fewer.

Know Your True Balance

To develop a realistic repayment plan, find out exactly how much you owe. The information on your most recent credit card statements may not reflect all of your activity if you just returned from your trip.

The typical credit card billing cycle is between 28 and 31 days. When it ends, your credit card issuer sends or emails you your statement listing your transactions during that time frame.

However, if the billing cycle ended on the 10th and you were still on vacation making charges until you returned on the 29th, your latest statement is out of date. Your actual debt may be higher or lower depending on what you did after the billing cycle ended.

Some of your transactions may still be pending, so log in to your accounts online or call your creditors to get your real balance.

“It’s like dieting when you want to lose five pounds quickly,” says Tara Alderete, director of enterprise learning at Money Management International, a nonprofit that provices financial counseling and education. “You want to know what the scale says today, not what it was a month ago.”

This is also your opportunity to ensure accuracy.

“When you’re on vacation you’re usually spending in unfamiliar places, so mistakes may not immediately jump out at you,” Alderete says. “Look at the details carefully. All the charges should have been made by you, and they should be in the right amount.”

This is especially important if you were in a different country because currency conversion can be confusing. In addition, it can be very difficult to dispute foreign charges with the merchant.

[Related:How to Dispute a Credit Card Charge]

Lillian Armstrong, a rising senior at University California, Davis went to Italy and Croatia for six weeks over the summer. She returned to the Bay Area in early August and was surprised by her credit card balance when she got home. “I didn’t owe anything before I left, and came back owing $1,500,” Armstrong says.

“I was only bringing a small amount of euros with me and didn’t want to take more out with my debit card because of the fees,” Armstrong says. “I knew I was going to charge up my credit card when I was there, but I definitely spent more than expected, having fun, going out, taking little trips, spending on trains and buses.”

Apply Credit Card Rewards

If you were using a credit card with a rewards program, you accumulated cash, points or miles as you were charging. You will find your most updated rewards balance on the issuer’s app or online when you log into your account.

With a cash back card, you can easily use the money you earned to pay down your most recent purchases.

If your credit card offers rewards as points and miles, you still may be able to redeem them as a statement credit. Log in to your online account to see if you can. You won’t get the same redemption value as if you were to use them for purchases like travel but if your intention is to drive down debt, it can work to your advantage.

So, if your credit card balance was $1,500 but you earned $200 or the equivalent, once your rewards are applied you’ll owe $1,300.

Use Liquid Low-Interest Savings

It doesn’t make any sense to hang onto credit card debt when the interest rates are high and the interest you earn on savings is low.

“Credit cards will always have higher interest rates than savings accounts,” says Bob Haegele, a freelance personal finance writer. “If you came home to that kind of debt, for sure use the money in savings. It’s always a good idea to have emergency funds, but if that’s in place and you have extra, knocking your vacation debt down makes sense.”

If you’re reluctant to dip in, check your statement to see how much you’re paying in interest to keep the balance going. A $1,500 balance with a 25% APR will cost $22.50 in financing fees for the first month alone.

The contrast between how much the cash you have set aside in a savings account earns as compared to how much your vacation debt will cost if you let it linger can help you make the decision to dip in, says Haegele.

Know How Much It Will Take to Pay Off in Three Months or Less

Once you have the final number for your vacation debt, strategize for rapid repayment. Becoming debt-free in three months is ambitious, but you can do it.

“My plan is to work as much as possible to pay it off by the end of September,” Armstrong says, who is finishing the summer by working at a juice bar.

“Each paycheck I get will go to my checking account and then I will send it over to my credit card. I get paid about $500 weekly. Right now my expenses are very low because I’m staying with my parents before I go back to school. I think I’ll meet my target,” she adds.

Or, divide your summer vacation debt into three even increments, Alderete says. By starting in September you can complete your debt repayment goal by the beginning of December.

For example, if you’re dealing with a balance of $1,200 and the APR is 25%, it would take three payments of $400 (and cost $37.27 in total interest) to meet your goal.

Modify Your Budget for the Payment

So, can you afford the payments that will delete your vacation debt in record time? That depends on your resolve and financial circumstances. Review your expenses and decide what you can eliminate or reduce before turning the calendar over to December.

“Flex your budget around your goal,” Alderete says. “It needs to be realistic, so go back to the budget and see where you can save a lot of money. This is temporary. In the long term, three months is not a big deal. Can your haircut wait, can you do your own nails at home? Don’t dine out, be really careful at the grocery store by shopping with a list.”

[Read: How to Make a Budget — and Stick to It.]

If reducing expenses isn’t enough to meet your goal, scan your home and yard to find things you can sell. You may have everything from unused gift cards to gaming gear, old cell phones and laptops, clothes, sporting equipment and more. While the weather is still nice you may want to have a yard sale, but you can sell almost anything online with an app too.

Apply the proceeds of your sale to your credit card balance and shift as much of your income as you can toward your payments.

Suspend Charging Until You’re Debt-Free

“Don’t use your credit card to make any purchases while you are in repayment mode,” Alderete says. “Use your debit card instead. Charging during this time will only make the process more complicated.”

Assuming all works according to plan, you’ll have paid your vacation debt off before sweater-weather starts and will be financially ready for the holidays.

More from U.S. News

What to Do When You’re Deep in Debt

How to Adopt a Better Money Mindset

How to Negotiate With Debt Collectors

Back from summer vacation with debt: delete it before the winter holidays originally appeared on

Federal News Network Logo

More from WTOP

Log in to your WTOP account for notifications and alerts customized for you.

Sign up