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Got debt after vacation? 4 steps to get back on track

What we'll cover

  • How to pay down travel-related debt

  • Tips for paying off debt faster

  • How to save for future travel

You're back from vacation and ready to dive back into your everyday life — including facing your bank account balance. Whether travel simply cost more than you budgeted for or unforeseen circumstances drove up the price, overspending on vacation happens. Take control and begin your next journey toward financial recovery.

1. Determine your total spending

To make a plan to pay off debt, you have to know exactly how much you owe. When you return, wait a few days to ensure all charges have been processed. Then log into all your accounts and take a close look at all transactions, including those that may have been paid before the trip like airfare or hotel.

It's also a good time to scrutinize all charges for accuracy. If you find an errant charge, dispute it immediately with your bank or credit card issuer.

2. Find the right repayment plan

How you should approach paying down your debt depends on your overall financial goals and personal preferences. Some common debt payoff strategies include the snowball method , the avalanche method, debt consolidation and debt management.

Whichever strategy you choose, you can utilize smart tools like Ally Bank's buckets and boosters as part of your Savings and Spending Accounts to help you get back on track.

3. Use rewards

Be sure to redeem any cash, points or miles you accumulated while using a rewards credit card during vacation. If you have a cash back card, you can use the earned money to pay down recent purchases. Or if you accrued points and miles instead, you might be able to redeem them as a credit toward your account balance. You won't get the same redemption value, but it can help you pay off debt faster.

4. Avoid accruing more debt

If your getaway caused you to accumulate a balance that you can't pay in full, it's a good idea to give your credit card a vacation. Adding onto your outstanding total could mean more in interest charges and even more debt to pay off. Use your debit card or pay for everything in cash while you work to pay down your debt.

It's also a good time to reevaluate your overall budget and everyday spending. Are there areas where you could cut back to avoid overspending? Budgeting is not one size fits all, so find the budgeting style that works best for you.

The good news is you can always learn from the past to build a better budget for a future trip.

Plan for your next getaway

The good news is you can always learn from the past to build a better budget for a future trip. Did your meals cost more than you anticipated, for example? Build in some extra cushion in your vacation savings bucket when you plan your next vacation. Or, alternatively, look for ways to save on food like cooking some meals or eating at more fast casual places during your trip.

Put vacation debt behind you

We all go overboard from time to time. Whether it was travel delays, unexpected hotel fees or too many souvenirs, overspending on vacation happens. But you can find your financial footing again by making a plan to pay off any travel-related debt.

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