Poll: 71% say rising costs have impacted summer vacation plans | credit cards
A recent survey by US News & World Report shows that nearly three-quarters of Americans who are ready to travel again but face a shaky economy and high prices have either changed their behavior or their travel budget to accommodate the summer vacation to make it a reality.
About 22% have cut their vacation budgets, and nearly 21% of survey respondents say they are reducing the number of vacations they take this year.
And another 16.9% say they are cutting back in other areas to fund their summer vacation plans. Only 28.8% say they haven’t changed their behavior or budgets to accommodate travel plans.
How much do Americans spend on summer vacations?
The survey shows that almost three quarters are planning one or even two vacations this year. When asked how much they expect to spend per person on their summer trip, respondents say:
- $500 or less: 26.9%.
- $501 to $1,000: 27.3%.
- $1,001 to $2,000: 22%.
- $2,001 to $3,000: 11.5%.
- $3,001 to $4,000: 6%.
- $4,001 or more: 6.3%.
While some Americans plan an expensive getaway, more than 54% have a $1,000 per person limit.
How Americans pay for summer vacations
The majority of respondents say they have the money for their vacation. But others have made some risky payment decisions.
And nearly 7% say they don’t know how to pay for their vacation. If you don’t know how to pay for a trip to the beach, you probably shouldn’t go there. Wait until you are sure you have the funds to cover the costs.
Among survey participants who know how to pay for their vacation, these are the payment methods that identify them:
- Immersion in savings/cash: 65.7%.
- With a credit card and then with a balance: 13.9%.
- Credit card reward redemption: 11.3%.
- If using a Buy Now, Pay Later plan: 6%.
- Taking out a personal loan: 3.1%.
It’s a bit alarming that almost one in four intends to borrow money for a holiday, for example using a credit card and carrying a balance with you. Carrying a credit card balance is never a good idea. You’ll be paying compound interest on your balance and your debt will grow rapidly.
Buy now, pay later plans are popular. The name alone makes it attractive. Most of these plans include a “Pay in 4” option, meaning you make four equal payments on the balance to pay it off, typically over a six-week period.
BNPL plans are considered installment loans and many do not charge interest. But others apply both interest and late fees. If your account defaults, it could end up on your credit report and that will lower your credit score. It may not feel like it, but when you agree to a BNPL plan, you take on debt.
How to plan a debt-free vacation
I know it’s been stressful dealing with inflation and the volatile stock market, but you really don’t want to travel if it’s making your financial situation worse. Here are some strategies you can use to give yourself some relaxation without going into debt.
Plan off-peak travel
This could mean taking your trip in the off-season or flying on days when tickets are cheaper. The best times to travel depend on your destination, so do your research and see the price differences for different times of the year.
If you are flexible and fly during the week, you can get cheaper fares. Increased fuel prices have affected the price of an airline ticket, and prices are high. Do everything you can to reduce airfare costs. An excellent way to do this is by using rewards credit cards.
Use Rewards credit cards strategically
The survey shows that almost 14% plan to use a credit card and carry some credit. That’s a bad idea!
It’s okay to use rewards credit cards to pay for vacations as long as you follow my rule: don’t carry credit. Pay the bill in full and on time.
By doing so, you can use cards strategically to maximize the rewards earned. By strategic, I mean using the credit card that offers the best rewards in a given situation.
The survey shows that almost 64% plan to hit the highway this summer. Using a credit card that gives you points or cashback on gas purchases can pay off. Seriously, gas is so expensive now every little help counts.
Over 30% of respondents plan to fly to their destination. This is an opportunity to use travel rewards you’ve earned to pay for the ticket. Some issuers offer ways to increase the value of your points, e.g. B. the use of a travel portal. If this is the case, take advantage of it and book your itinerary through the portal.
Among respondents who use travel rewards credit cards, 56% made $700 or less. More than 10% don’t even know how much they’ve earned in rewards. It is possible to make thousands of dollars a year. I use a combination of travel award cards and cashback credit cards. Last year I made over $4,300 in rewards by using my cards strategically with little effort. You can too.
And don’t forget that rewards credit cards often have benefits that help you save more when you travel. When asked which benefit is most important to them, nearly 41% of respondents choose free checked baggage. That alone can save you hundreds of dollars, depending on the specific card and the weight or number of bags you need to check.
Create (and stick to) a vacation budget
You probably have an idea of how much your trip will cost. But have you thought about stopping on the way to the mountains and buying some snacks for the whole family? Prevent this expensive scenario by packing vacation bags.
You can also save money by renting a condo that has a kitchen. Treat yourself a few times, but also spend family evenings at home with dinner and a movie (brought from home too).
Think about all the expenses you’ll have, then decide where to go and how long you can stay before you end up spending more than you can repay.
Try a group vacation
If you are friends with another family and your children get along well, this is an opportunity to share the cost. I just explained why you need a budget. When going on a group holiday, it is important that you have a budget.
Meet with the other parents to set your shared budget. If there is an activity that the other family would like to do that you cannot afford, schedule separate activities for that day. Do not try to negotiate this in front of the children. It won’t end well. Find out what you’re paying and what you’re paying for before heading to your shared destination.
Save now for next summer
I know that’s not what you want to hear. But if you’re among the nearly 7% who don’t know how they’re going to pay for their vacation this summer, step back and think about it.
Are you sure you still want to pay for your vacation when the holidays come? No you do not. Postpone the big trip, but plan a few short weekend getaways this summer to escape the crowds.
By next summer, open a savings account solely for family vacations, such as family vacations high interest savings account with low minimum deposits. Contribute as much as you can to this account each week.