Vacations with Debt

[nrpofp]

Oh come on - where's your sense of humor? Really? You keep saying how much you LOVE credit cards, I thought it was a natural punch line and was surprised no one else had caught it.

Back to serious discussion though, I'm trying to figure out where you've gotten a credit card with a 3.9%. I've received solicitations for that kind of thing, but on mine that interest rate is usually either only on a balance transfer or is for a short time period only. 3.9 is a SCREAMING deal for credit cards. I'm not exactly a credit card expert, but I'm pretty sure that rate is highly unusual.

I have a Discover card thats at 0% until next summer. Credit card companies always have promotional offers.

 

[GinnyEmma]

Disykat, I thought it was funny. Not in a mean way but a cute way.

 

[Colleen27]

My own take on it is that "I wouldn't go on vacation without a significantly positive net worth an where I couldn't pay for the vacation in liquid assets." I implied a couple of pages ago, that some people adhere to "good debt/bad debt" - My financial decisions are more along the lines of managing "net worth, liquid assets, and cash flow" - along with that all important balance concept. But its a more complicated view.

The more important thing is that your house is an asset. Not lately, but normally, your house is worth more than your mortgage on it. Your house, even with the mortgage on it - is supposed to be "worth something." Your credit card bill supports something that is worth....a couple hundred bucks at a garage sale? This gets to the net worth part of my more complicated view.

I'm curious, would you then refrain from vacationing if like so many people these days you were underwater on the house, even though the payment is fixed and manageable? Like hypothetically - 2007, you have a good LTV ratio so vacation is okay. 2008, housing market tanks, the house loses 40% of its value, and now vacation isn't okay, even though nothing about your income or expenses has changed?

 

[grafxgirl]

We have debt, but do not use credit cards to regularly finance our expenses, and are steadily paying down the debt we have. For the most part it is cash only these days, and do not have trouble paying any of our monthly expenses. We still go on vacations, but we make sure we budget them in so we are not racking up extra debt. We just spent 5 days at the beach and will be doing a week in Disney later this year.

 

[marie1203]

Crisi, I too appreciate your explanation. Very thorough.
Bolded is the point I am trying to make. If those with a mortgage gave up their vacations they could pay off the mortgage quicker and, therefore, be out of debt quicker.



I can see your point. While people need a roof over their head they don't need to assume a 200K mortgage. They don't need a 4 BR house with 1 child. The biggest difference I see btw mortgage and renting is that with a mortgage you are building your own equity and by renting you are building someone else's. Regardless of how you slice and dice it, mortgage is still a debt. That is the point I am trying to make.

I guess then you will consider the same thing either debt? I find it there is a huge difference between secure and unsecure debt, it seem most of the disers agree and the financial world also sees it different. I guess it comes down to will you consider $100,000 of cc debt the same as a $100,000 mortgage?

 

[Bungle]

This seems to come up a lot. And I see all ends of the spectrums from the Dave Ramsey NO DEBT folks to the Disney even if they do not have a job

So my question is do you think it is ok or would you to Disney or any other vacation if you had any credit card debt.

Assuming:

Great retirement plans for both spouses
Some savings
Debt less then $5000 managable payments
Good rates on all debt and well within families means in secure positions with marketable skills and education.

Vacation would be paid in full from cash and would be less then amount to be fully debt free. Vacation is discounted and while it has lots of perks bugeting will limit finaicial impact.

So would you see this as okay or do you think it is foolish?

I haven't read all 14 pages but I'm sure you've gotten a mix of advice. Honestly I would go. While we do live without debt now we did have some at one point and I went on vacation then too. As long as you make sure you can afford it and it will not impact your ability to continue making payments like you are currently I would say go for it. Paying off debt can be a long hard road and sometimes a little vacation can give you the steam to finish what you started.

 

[indimom]

Indimom, I hope your medical stuff settles in a positive manner. Lol, I must admit I hate paying hospitals and doctors when I still feel like crap.

Isn't that the truth.... Usually the problem is long solved by the time I get the bill, so it doesn't sting as much to pay it. We've never experienced a 'long-term' medical issue before, so it's kinda freaking me out right now. (Which makes me much more conservative when spending questions come up on the Board. )
We started a new treatment series on Monday that will end in December. It has a pretty good success rate, so hopefully this will take care of the problem.

 

[DisneyCrazyMomma]

I have a Discover card thats at 0% until next summer. Credit card companies always have promotional offers.

They do...but sometimes it's not just promotional. I have a card that is 3.9% fixed forever and also one that was a balance transfer that is 2.9% for the life of the balance... which is all that card is used for. There are good deals....

 

[ccgirl]

Oh come on - where's your sense of humor? Really? You keep saying how much you LOVE credit cards, I thought it was a natural punch line and was surprised no one else had caught it.

Back to serious discussion though, I'm trying to figure out where you've gotten a credit card with a 3.9%. I've received solicitations for that kind of thing, but on mine that interest rate is usually either only on a balance transfer or is for a short time period only. 3.9 is a SCREAMING deal for credit cards. I'm not exactly a credit card expert, but I'm pretty sure that rate is highly unusual.

Sorry, normally I get jokes. Just missed this one. BTW, I never said I LOVE credit cards. I just can see a purpose for them. Some credit card companies will lower the interest rate if you call and ask. Especially if you are never late, like I am, and carry a balance. I have a few 0% balance transfer cards as well.

I say go!!!!!
My thoughts are live and enjoy your life with vacation if you are doing all you can to provide for your family and have steady income! I sat beside my Aunt in her hospital bed at age 40 2days before she died of cancer and her regrets were not taking her 4yr and 9yr old on trips and spending more time together away from day to day. She and my Uncle were hard workers and were debt free and none of that made a difference in that moment but her tears. I decided on that day 11 years ago that I would make sure I devoted time to take the kids annually and have FAMILY adventures. Because of that commitment I even took my mom with us on her first trip to Disney World one year and on 2 special Disney Cruises that I payed for even though it could have been used towards my debt. Yes I have credit card debt and a mortgage and student loan however I would NEVER give back the memories I was able to share with my Mom before she suddenly died at age 54. I will continue to work full time and pay on my debts but I will continue to take one week a year to make magical memories for my family. When I close my eyes I can feel my mom hugging me and crying that night at Magic Kingdom during the fireworks.... THAT IS PRICELESS!!!!!!! And my 4yr old DD coloring pictures with Belle on the Mickey Mouse boat is still huge topic of conversation that has put stars in her eyes even though it has been 7 months ago.....

Aww...this post put tears in my eyes. So sorry for your losses but very happy you were able to make happy memories. This is how I choose to live too. Another poster put it so well earlier in this thread....Plan for the future but live for today. I think that's my new motto.

I guess then you will consider the same thing either debt? I find it there is a huge difference between secure and unsecure debt, it seem most of the disers agree and the financial world also sees it different. I guess it comes down to will you consider $100,000 of cc debt the same as a $100,000 mortgage?

Perhaps I am over simplifying??? In your scenario above I guess it would depend on a few things. First, which one has the lowest interest rate? Second, how much is the house worth relative to the mortgage? If the house isn't worth the $100,000 mortgage I don't see it any better than the credit card debt. When it comes down to it - debt is debt. If a person has a mortgage they are not debt free.

 

[SnowWhite607]

I say go!!!!!
My thoughts are live and enjoy your life with vacation if you are doing all you can to provide for your family and have steady income! I sat beside my Aunt in her hospital bed at age 40 2days before she died of cancer and her regrets were not taking her 4yr and 9yr old on trips and spending more time together away from day to day. She and my Uncle were hard workers and were debt free and none of that made a difference in that moment but her tears. I decided on that day 11 years ago that I would make sure I devoted time to take the kids annually and have FAMILY adventures. Because of that commitment I even took my mom with us on her first trip to Disney World one year and on 2 special Disney Cruises that I payed for even though it could have been used towards my debt. Yes I have credit card debt and a mortgage and student loan however I would NEVER give back the memories I was able to share with my Mom before she suddenly died at age 54. I will continue to work full time and pay on my debts but I will continue to take one week a year to make magical memories for my family. When I close my eyes I can feel my mom hugging me and crying that night at Magic Kingdom during the fireworks.... THAT IS PRICELESS!!!!!!! And my 4yr old DD coloring pictures with Belle on the Mickey Mouse boat is still huge topic of conversation that has put stars in her eyes even though it has been 7 months ago.....

Couldnt have said it better myself!

 

[amberdburke]

We do have debt. We have a lot of credit card debt and I absolutely hate it. We are working hard to pay it off. I scrimp and save all year to afford our one week of vacation. We usually spend less than $800 for our vacation. This year we are going to Disney and are spending quite a bit of money. However, we are paying cash for all of it. I'm not going to let debt keep me from vacationing, but I won't go into further debt to go on vacation. If we can't afford to pay for it in cash, we won't go.

 

[The Pluto People]

Originally Posted by RabbitFood
We don't carry credit card debt. The card gets paid off every month--period. If taking a vacation meant we carried a credit card balance--we'd stay home.

For you folks who do this, Im just curious as to why you don't just save a "months worth of credit card debt" up and do away with your credit cards? If you can pay it off in one month, why do you even need them? If you can pay your balance every month then you can pay cash lol. Skip a month of purchases and viola! Now you have cash to pay for everything and no longer need that trusty old credit card......

...or do you?

We pay our Starwood AmEx in total every month. In March we used the points from that card to stay for FREE at the Dolphin!!

 

[marie1203]

Perhaps I am over simplifying??? In your scenario above I guess it would depend on a few things. First, which one has the lowest interest rate? Second, how much is the house worth relative to the mortgage? If the house isn't worth the $100,000 mortgage I don't see it any better than the credit card debt. When it comes down to it - debt is debt. If a person has a mortgage they are not debt free.

Even if both had the same rate there is nothing backing up cc debt. Even if the house is worth $100,000 they can sell the house tomorrow and have 0 debt. Even if they had to pay for the realtor they might end up with $10,000 in debt, but with cc they do not have the means to pay the $100,000 even if they sold everything they bought.
Creditors will look at such high amount of cc and run the other way. If someone has a mortgage they will go ahead an allow more credit. Having a lot of cc will reduce your credit score which a mortgage won't do. Yes I agree if you have a mortgage you are in debt, but I do think there is big difference between secure and unsecure debt.

 

[perfectparanoia]

I don't have credit card debt. I have a line of credit with a low interest rate. When we planned our last trip, it was payable in cash out of money we had on hand.

But life has handed us several expenses we didn't know about in the last few months and now we are a little in the red.

I am not cancelling the trip. We are tightening spending in other areas and will be out of it in a couple of months.

Mind you, if this were more than a temporary setback and we had huge debts that we were barely keeping up with? I wouldn't go to Disney. Even though it is a big thing for me (my only hobby is keeping up with all things Disney World), it is not worth the our families future for a trip.

 

[babyrich]

go on vacation. You are not creating more debt since you say you will use cash.

We all manage our finances in our own way. If you are comfortable carrying this debt and comfortable knowing it can be paid, than why not enjoy a vacation.

 

[nowellsl]

Even if the house is worth $100,000 they can sell the house tomorrow

Not in my neighborhood

 

[ccgirl]

Even if both had the same rate there is nothing backing up cc debt. Even if the house is worth $100,000 they can sell the house tomorrow and have 0 debt. Even if they had to pay for the realtor they might end up with $10,000 in debt, but with cc they do not have the means to pay the $100,000 even if they sold everything they bought.
Creditors will look at such high amount of cc and run the other way. If someone has a mortgage they will go ahead an allow more credit. Having a lot of cc will reduce your credit score which a mortgage won't do. Yes I agree if you have a mortgage you are in debt, but I do think there is big difference between secure and unsecure debt.

But, good luck selling your house at all, let alone tomorrow. If someone has a $200,000 mortgage on a house that is worth only $100,000 that would be the same thing (to me) as someone with no mortgage but $100,000 credit card. They are still in debt. I get secured vs. unsecured. My point is there are posters saying they could never go on vacation with debt that they only have a mortgage. The mortgage is still a debt, it is just a secured debt. And, depending on the value of the house, it could be worth less than the actual mortgage amount.

 

[lakelandgal70]

OP, I have learned a few things during my tenure on the DIS....

The DIS population seems to have lots of rich folks with hundreds of thousands of dollars in various types of savings

The DIS population seems to have a lot of wealthy people who never make bad financial choices or splurge

The DIS population seems to be made up primarily of people who never take a vacation if they have any debt

The DIS population seems to be primarily made up of perfect people who never make mistakes, break a rule, or do any wrong

The DIS population seems to consist of many people who feel entitled to everything, including being entitled... to being entitled

Its like everyone who is wealthy, perfect and debt free flocked to the DIS and made their own little community. Therefore....

The DIS population does not represent me or my household.

If you can afford a vacation then YOU know it. Not someone on a message board who may or may not be from the advice giving background they claim. If people waited until they had no debt to take a vacation, travel services and tourist locations would be non-existent because there would be no one to bring in revenue.

Sharing your household finances here will only bring out the Desperate Housewife types who would scold you for going on vacation if you owed $10 on a bill that wasn't even due yet.

Take your vacation and enjoy it while others sit here and bicker back and forth about why you shouldn't.

Totally agree and couldn't have said any better.

 

[tyniknate]

op, i have learned a few things during my tenure on the dis....

The dis population seems to have lots of rich folks with hundreds of thousands of dollars in various types of savings

the dis population seems to have a lot of wealthy people who never make bad financial choices or splurge

the dis population seems to be made up primarily of people who never take a vacation if they have any debt

the dis population seems to be primarily made up of perfect people who never make mistakes, break a rule, or do any wrong

the dis population seems to consist of many people who feel entitled to everything, including being entitled... To being entitled

its like everyone who is wealthy, perfect and debt free flocked to the dis and made their own little community. Therefore....

The dis population does not represent me or my household.

If you can afford a vacation then you know it. Not someone on a message board who may or may not be from the advice giving background they claim. If people waited until they had no debt to take a vacation, travel services and tourist locations would be non-existent because there would be no one to bring in revenue.

Sharing your household finances here will only bring out the desperate housewife types who would scold you for going on vacation if you owed $10 on a bill that wasn't even due yet.

Take your vacation and enjoy it while others sit here and bicker back and forth about why you shouldn't.

amen!

 

[dvcgirl]

If you can afford a vacation then YOU know it. Not someone on a message board who may or may not be from the advice giving background they claim. If people waited until they had no debt to take a vacation, travel services and tourist locations would be non-existent because there would be no one to bring in revenue.

And your point is exactly why our country is in the position that it is in today. Last time we were at Disney was in 2009 with my entire family. Of course, it was crowded as always....and someone in my family made the comment, "it sure doesn't look like that recession has hit here". And someone else in my family said..."you'd be assuming that everyone you see can actually afford to be here....and many of them can't".

The world seems to still spin on its axis in the 1960s before every family had thousands of dollars in credit card debt and had to save up for things before they actually purchased things. Now....everyone is in "life is too short mode". And as we get through the next 20 years we're going to see the consequences of living life in that mode.

It's not going to be pretty.

Everyone who agrees with your post is just living like most Americans....living paycheck to paycheck, living with debt while trying to save as much as they can (which is likely not enough). Every single piece of data out there backs up this statement.

To the OP, If the consumer debt is so small and the income is good with savings and great retirement plans....why not just pay off the debt, and then save for a year and take a vacation while being completely debt free? Carrying any credit card balance implies that there may be some overspending going on.

Maybe you have the 5K in CC debt at zero percent and are just playing the "we're using the CC company's money" game.... but it's so much cleaner and simpler to just pay it off monthly and be done with it. It's just one less thing to deal with.

And as we're all learning as we go along in this country.....there are no rock-solid pensions and absolute recession-proof jobs these days.