How to get out of travel debt
Suffering from debt lag?
You've returned from your holiday with delightful travel
memories but have you also lugged back a travel debt nightmare? If
you are suffering from a serious case of 'debt lag', don't just
ignore it. Debt can easily snowball. The longer you leave it, the
bigger it will get.
Get out of debt and back in control of your finances with our
simple money tips.
Have a plan to pay down your
If your debt is on a credit card, work out how much extra you
can put towards your card and crunch the numbers using our credit
card calculator. You will be surprised how fast you can pay it off
with small extra repayments over a year, and how much interest you
Work out how you can pay off your card faster.
Credit card calculator
To work out how much you can afford to put towards your debts
create a budget using our budget planner. Once you put in all your
expenses, see if you can cut back on any unnecessary spending so
you can have even more to put towards your debts.
See if you can find some savings.
If you need help staying on track and managing your day-to-day
spending, try using our TrackMySpend app.
Keep track of cash.
Paying off more than one
If you have more than one credit card to pay off, pay the card
with the highest interest rate first. Remember to continue paying
at least the minimum amount on the other outstanding balances
Take a look at our page on how to pay off
multiple cards credit cards for more tips.
Make your credit card repayments
Avoid unnecessary late payments by asking your credit provider
to send you SMS or email alerts just before your repayments are
due. You can usually set these up online.
You don't want to add fees to your already high debt bill.
Case study: Kate pays off her travel debt in 8 months
Kate went travelling for 6 months to Europe and
South America. She took $18,000 of savings with her to pay for the
trip plus she had already prepaid some flights and tours.
She had an amazing time overseas and did some things that she
had been dreaming about for years. She went to some music
festivals, hiked in the Pyrenees and even did a surf camp in
When she had been away for 5 months Kate started to run out of
money. So she had a choice. She could either go home a month early
or start paying for the rest of her trip with her credit card. By
the time she came home, Kate had around $10,000 of travel debt on
She quickly got a new job and made a plan to clear the debt.
First she did a budget to see how much money she had left after
paying her expenses each fortnight. She then used
MoneySmart's credit card calculator to
work out how much her monthly repayments would be if she were to
pay the debt off over 8 months. They worked out to be $1,250 per
It took a strict routine of bringing lunches in to work, not
buying any clothes and staying in rather than going out, but Kate
managed to clear all of her travel debt in 8 months.
Talk to your lender if you can't
If you're struggling to make your repayments, don't just stop
making them. This will only prolong the debt pain and will affect
Contact your lender and let them know you are experiencing
financial hardship. Find out how to talk to your credit provider
and apply for a hardship variation.
You can also speak to a free financial counsellor if you are
struggling with your debts.
Travel debt free on your next
Prevention is better than cure. If you follow these holiday
savings tips you can avoid debt on your next trip.
Get a holiday savings plan
Work out how much money you need for the holiday and how long it
will take you to save that amount. See our saving for a
holiday webpage for more details. Paying for your trip with
savings rather than credit makes a lot of sense.
Saving early means you can book early too. You can enjoy
early-bird discounts by booking your flights and accommodation
months in advance.
Go your own way
Don't follow the crowds. Avoid the peak season. Be a
non-conformist and head to the mountains and lakes when everyone
else is flocking to the islands and beaches. If you can travel in
winter and avoid festive and school holiday periods, you're off to
a great start.
Check your transaction fees
If you're going overseas, check the transaction fees your bank
will charge you on your debit or credit cards before you go. You
could be charged a foreign currency conversion fee, an overseas
transaction charge or an additional cash advance fee (for credit
Carefully research and compare your options well before you go.
Find out more about prepaid cards you can use while
Australians and travel insurance
Our Australians and travel
insurance infographic explains why Australians travel, where
they go, what is covered and isn't covered by travel insurance and
how to get the best policy for you.
Avoid debt lag by setting yourself a spending
limit and paying for your trip with savings.
Last updated: 19 Mar 2018