Book now, pay later vacations are on the rise.
As more people set off on adventures around the world, they’re realizing that travel can be expensive. However, there are a growing number of options to pay for those getaways, including travel payment plans.
Here’s what would-be travelers need to know about this travel hack and payment option and how to decide if it’s right for them before they take off in a plane, train, or automobile.
What a Payment Plan Vacation Really Means
Buy now, pay later vacation plans work in a similar way to traditional layaway options at stores. Travelers pay a little upfront and pay off the rest over an agreed-upon timeline. However, unlike traditional layaway, where a person can pick up their item only when payments are complete, travelers get their item — their trip — upfront.
There are several book now, pay later payment options on the market including Afterpay, Affirm, Klarna, and Uplift. When booking a vacation using a payment plan option, you’re actually paying the financing company rather than the travel company itself.
For example, if you book a Carnival cruise (one of the companies offering this as an option), you’ll pay via Uplift. Uplift will then pay Carnival directly for the vacation in full. When you make payments, you’ll be paying Uplift, not Carnival.
Payments can be made over weeks or months, depending on the trip you’re taking, how much it costs, and which payment option you choose. Before signing on the dotted line, you’ll be assigned an interest rate based on data including your credit score, much like you would when applying for a credit card or loan. The rate will always be displayed before you click “book,” but reading the fine print is important so you are aware of all the terms of the agreement, not just the interest rate.
💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. SoFi personal loans come with no-fee options, and no surprises.
Companies That Offer Buy Now, Pay Later Vacations
The love for vacation payment plans is growing across the travel industry. Here are a few of the major players that are in the game.
Expedia: Expedia offers book now, pay later vacations through Affirm. At checkout, travelers can choose whether to make four interest-free payments every two weeks or monthly installments.
Priceline: Like Expedia, Priceline also offers book now, pay later vacation payment plan options with Affirm, with similar payment options.
Hotels.com: Hotels.com is offering payment plan options with Zip. Customers can split their payments into four installments over six weeks.
VRBO: VRBO is also getting in on the book now, pay later vacation option with Affirm. Customers can pay the total cost of the trip in three, six, or 12 monthly installments. Fixed payments come with interest rates ranging from 10% to 30% APR based on your credit profile.
Airlines: Airlines are also offering a book now, pay later option for those looking to fly to their destination. American Airlines, Delta, United, Southwest, Alaska Airlines, Air Canada, and Allegiant are some of the 16 airlines offering this option.
Cruise lines: Cruise lines are also getting into the act. Carnival, Norwegian, and Royal Caribbean are all offering vacation payment plan options to cruise lovers looking to stretch their vacation budgets out over months.
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The Pros and Cons of Book Now, Pay Later Vacations
There are benefits to the book now, pay later vacations. Most obviously, you can book a vacation now and pay for it later. That could allow you to lock in your plans — and maybe even take advantage of a good deal or favorable rate — instead of having to wait until you’ve saved enough cash.
But there are potential drawbacks, too.
For starters, travelers may run the risk of overextending themselves financially if they book a vacation but can’t make the payments on it. According to a 2023 report by the Consumer Financial Protection Bureau, book now, pay later travelers are more likely to be highly indebted or have a balance or delinquencies on their credit cards compared to non-book now, pay later travelers.
There’s also the potential impact on your credit score. Though not all companies run a credit check when you choose the book now, pay later option, some do. And this could affect your credit score. Likewise, the service may report late payments to the national credit bureaus, which could also negatively impact your score. To find out if a credit check will be run before booking, reach out to the service directly.
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Personal Loan as an Alternative to Buy Now, Pay Later
If you want to take a vacation without having to save the money to pay for it first, you may want to consider an unsecured personal loan.
Taking out a personal loan is still taking on debt. But an unsecured personal loan allows a borrower to take out the amount needed to pay for a vacation with fixed interest rates that are generally lower than credit card rates and possibly lower rates than those offered by buy now, pay later financing options. Shop around and compare rates and terms to see what makes the most sense for your financial situation.
💡 Quick Tip: Generally, the larger the personal loan, the bigger the risk for the lender — and the higher the interest rate. So one way to lower your interest rate is to try downsizing your loan amount.
Many travel retailers, airlines, and cruise companies are now allowing travelers to book their vacations upfront and then pay them off over time. While this could allow travelers to lock in a good deal, there are possible drawbacks to consider, including potentially high interest rates upon repayment. Travelers should look at all their payment options when deciding how to finance a trip.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.
Photo credit: iStock/hudiemm
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