How to Avoid Vacation Credit Card Debt

Even in today’s economy, when families are cutting back on little luxuries like eating out and cable television, vacations are more important than ever. "Queen of Finance" Suze Orman says taking the time to relax and recharge your batteries is even more important in times like this.

However, that doesn't justify charging thousands of dollars for a one week vacation which will just lead to more stress when you get home. Responsible consumers can relax both on vacation and after if they make credit card debt management plans beforehand.

Set a Vacation Budget to Avoid Credit Card Debt

Once you have made the decision to go on vacation and have some fun, it’s time to a make the not-so-fun decision of setting a budget. According to Dave Ramsey, a financial guru specializing in advising people how to get out of credit card debt, you need to research your destination and the prices of hotel stays, meals, travel expenses, and so forth ahead of time.

Dave suggests dividing the total vacation expenses by the number of paychecks arriving before you leave, and putting cash into an envelope each paycheck. Then, while on vacation, only use that cash instead of racking up credit card debt. You'll return home to fond memories of your vacation, not a sense of dread opening your credit card bill.

That strategy does take some serious planning, and vacations do tend to be full of unexpected (and costly) surprises at every turn. Budget in advance for the necessities.

• Transportation - car rental, place tickets, gas, parking fees, etc.
• Lodging - hotel rooms, park fees, deposits, pet fees, etc.
• Food - breakfast, lunch, dinner, groceries, eating out, travel snacks, water, etc.

If you research restaurant prices ahead of time, you are less likely to be surprised by the high cost of menu items in expensive destinations, and you can create a list of affordable eateries.

Be sure to budget for some souvenirs. Chances are you will want to bring home some keepsake for yourself or others, but if you don't set a budget limit for them you can rack up hundreds of dollars quickly. Finally, don't try to cut your budget too close, because vacation budgets have a tendency to go over. Build in an extra "slush fund" that you can tap into if there is an emergency or if any budget category gets too close to the edge.

Minimize Credit Debt by Staying Closer to Home

Steering clear of incurring vacation credit card debt may require some reevaluation of the destination. Choosing a location closer to home helps to avoid airfare, which requires a credit card to book. Driving to a closer vacation spot can also help prevent credit card debt since driving is often the cheaper transportation option, especially if it's a family vacation.

You can save money on fuel by taking a few small steps. Before you head out, properly inflate your tires to the recommended pressure, as this increases fuel efficiency. Don't put too much stock in those gas-saving devices advertised on late-night television, but definitely get your car a tune-up up before heading out on a long trip. Keep your driving smooth—a lot of accelerating and braking will negatively affect your gas mileage.

The Right Accommodations Can Help Avoid Credit Card Debt

Orman suggests renting a hotel room with a fridge and kitchenette. She estimates that simply buying groceries and eating one meal a day made at the hotel can save a family of four up to $350 a week! You can really maximize your savings by skipping room service and choosing a hotel that includes a continental breakfast in the price. If the hotel doesn't offer free breakfast, it's usually the ideal meal to eat at the hotel if you can cook it.

You may also consider taking an RV or camper and staying at a campsite. These are usually cheaper than hotels, plus having the ability to cook more meals at the campsite will save you money that would be spent on expensive restaurant bills that can easily add up to more credit card debt.

Use Your Connections and Keep the Credit Card in Your Pocket

Have family in another state? Friends close to the beach? Enjoy their hospitality and stay in their house for free! Dave Ramsey urges people to use their connections to save hundreds in lodging costs alone.

Even when you add the cost of buying groceries, you still save money by eating a home cooked meal instead of paying restaurant prices. Dave recommends offering to host their family to offset any awkwardness. That way everyone benefits, and you can avoid a large expense on your credit card bill.

Use the Same Credit Card Debt Strategies You Use at Home

Some money-saving strategies you use at home can be applied to vacations with tremendous results. Clip coupons or check online sites like Groupon to take advantage of specials for attractions, shows, amusement parks and other activities near your destination. Tote around a water bottle and snacks to avoid relying on convenience foods that can add major credit card debt after just one week away. Combine trips if possible. Plan your outings by location to save gas while still enjoying the sites.

Enjoying a relaxing vacation is soul-enriching and energizing, but it should not come at the cost of accumulating a large credit card debt. If you plan ahead, budget, use a measure of discipline and common sense, and follow these guidelines, you could even experience some debt reduction while sticking your toes in the sand. Make a little sunburn the worst thing you bring back home.