The One Way Gen Z Is Able To Pay For All That Traveling They Do (And Is It A Good Idea?)

Open any social media app and you'll probably scroll past photos of young people... everywhere. From backpacking Southeast Asia to country hopping across Europe, Gen Z — those born between 1997 and 2012 — are traveling more than ever, and with their changing travel styles and habits, are changing the travel industry.

But how is this young generation just beginning adulthood affording lavish trips? The answer lies in a very complicated method: "buy now, pay later" services. These companies, such as Klarna, Afterpay, and Affirm, and newer travel-specific ones like Uplift and Fly Now Pay Later, have made it possible to book flights, hotels, and vacation packages with just a fraction of the total cost, and let users pay for their trips over time in monthly installments. No more hefty bills before your trip. Travelers can now enjoy their trips and worry about the cost later.

Klarna reported a 50% increase in travel bookings in the past year, and Affirm reported a 38% increase (per CNBC). Though using this method is becoming increasingly popular, and this sounds like a great idea, it may be too good to be true. These companies could work in theory, but only if you never missed a payment. However, using these types of companies can be a bad idea and lead to debt, stress, and other consequences that may not be top of mind when you're dreaming of tanning on the best beaches in Mexico or skiing in the Alps.

Major companies have begun to take notice of how much Gen Z uses these services for clothing, tech gadgets, and other big purchases, and have spread it to the travel industry. Major airlines, hotel chains, and travel agencies now partner with these companies. As Gen Z continues to dominate the cruise market, it means their $2,000 cruise around the Caribbean may only cost a fraction now. For example, Southwest Airlines partners with FlexPay, Expedia partners with PayPal Pay Later, and Delta Airlines uses Affirm,  an enticing offer as flights keep getting more expensive. Some companies won't even perform a credit check or do a "soft" credit inquiry, which doesn't affect your credit score. But as you're paying back the loan, you also need to be aware that not making the payments can negatively affect your credit score.

But is using this method to pay for travel even a good idea? Well, probably not, but it depends. Remember, these are loans. If you don't make every payment on time, you could be facing late fees and interest charges. These may be attractive offers and so easy to click on as you're checking out, but if you're not careful, the trip could end up costing you a lot more than you thought. If you are using a "buy now, pay later" option for travel, try to make sure you already have most of the money to cover the cost. That way, you don't get caught on a slippery slope.