More than one in five Australians (22.2%) are risking debt lag by relying on credit cards, loans and ‘Buy Now, Pay Later’ services to fund their holidays, according to new research from Compare the Market.*

The latest statistics show that while the majority of Aussies surveyed (61.8%) prefer to save and pay for a holiday in full at the time of booking, many may unintentionally be putting their finances at risk by booking their trips on credit.

More than one in 10 Australians surveyed (11.6%) said they planned to book their next holiday on a credit card, while 6.1% would use ‘Buy Now, Pay Later’ services to fund their vacation.

A smaller percentage (2.7%) said they’d rely on their friends, family or travel companion for an I-O-U, while 1.8% said they would take out a personal loan.

And it’s our younger generations who are more likely to fall into the debt lag trap, with 26.3% of Gen Z and 25.5% of Millennials using some type of credit or loan to pay for a holiday.

Compare the Market’s analysis shows Australians will budget an average of $6,168 for their next holiday.

Compare the Market’s Phillip Portman said certain types of payments could end up costing you more in the long run.

“There are some extremely attractive holiday packages on the market right now, but the last thing we want to see is anyone booking a holiday on a credit card or by taking out a loan if they haven’t done the proper research.

“Credit cards and loans can attract huge interest rates. On paper, putting a few grand on the credit card for a holiday might seem harmless, but it may attract thousands of dollars in interest that you could be paying back for years if you’re not careful.

“No one likes the fear of missing out, but is a couple of weeks jet-setting across Europe really worth being in debt for years to come?”

Financing a $6,168 getaway on a credit card with a 20% interest rate would take 54 years and six months to pay off, assuming you only made minimum repayments on the credit card, according to Compare the Market analysis. You’d be forking out $33,176 in interest – more than five times the amount of the $6,168 holiday.

“People need to cross their ‘T’s and dot their ‘I’s if they are planning on using a credit card or loan to book their next holiday,” Mr Portman said. “These financial services can be useful if utilised correctly, but could leave you drowning in debt if you’re not careful.

“Thankfully, our research shows an overwhelming majority of Australians will save and pay for their holiday in full at the time of booking. Others will put down an initial deposit and pay off the holiday before taking off, while some will utilise their airline membership points.

“Whatever way you plan on paying for your trip, travel insurance is worth considering at the time of booking. This may come in handy if an unforeseen circumstance occurs before your departure date that prevents your trip from going ahead as planned. It may help reimburse you for flights, tours, accommodation and other holiday expenses you’ve already paid.”

*Survey of 1,016 Australian adults, conducted September 2025.

For more information, please contact:  

Phillip Portman | 0437 384 471 | [email protected]

Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, and home loans products from a range of providers. Our easy-to-use comparison tool helps you look for a range of products that may suit your needs and benefit your back pocket.