Travel debt is spiking this summer. Global Google searches for “travel loans” have surged 233% in the past month as holidaymakers stretch their budgets to cover rising flight and hotel costs. With late-summer getaways in full swing, more travellers are looking for ways to spread the cost of trips abroad.
In 2025, nearly one in five American travelers said they plan to use a Buy Now Pay Later (BNPL) service to pay for their summer vacations. with Gen Z and millennial consumers more likely to use BNPL for travel purchases.
What are buy now, pay later payment options?
Buy now, pay later (BNPL) payment options are rapidly increasing in popularity, especially in the travel industry, allowing you to split the full cost of something into smaller payment instalments over a longer period of time.
Typically BNPL options don’t charge interest on your payments on shorter term loans, however, when payments are split over a longer period of time interest rates can surge, as well as fees for any missed or late payments.
But what are the risks?
Online service company Gigacalculator says the buy now pay later options can be really beneficial, convenient and the difference between you having a summer holiday or not. However it’s important to make sure you practice responsible lending, research fully and manage your finances to make sure you can complete the repayment plan comfortably.
A recent Consumer Finance Protection Bureau report found that 63% of BNPL borrowers had more than one loan at a time, also known as “loan stacking”.
Hidden fees are also applied in BNPL. Financial analyst point out many BNPL payment schemes seem like no fees are attached to the repayments, it’s important to fully research this so you are aware. Many schemes market themselves as “no-fee”, but dig deeper and you’ll find penalties for late payments, extra charges for longer repayment periods, and in some cases interest rates higher than traditional loans.
NerdWallet found that 30% of travelers who used credit cards for summer travel in 2024 still haven’t paid off their balances.
