Poll: 71% say rising costs have affected summer vacation plans | Credit card
A recent US News & World Report survey shows that nearly three-quarters of Americans, ready to travel again but faced with a shaky economy and high prices, have changed either their behavior or their travel budget to take a summer vacation. been a reality.
About 22% have reduced their vacation budget and nearly 21% of survey respondents say they are reducing the number of vacations they take this year.
And a further 16.9% say they are cutting back on spending in other areas to fund summer vacation plans. Only 28.8% say they have made no changes to their behavior or budget to accommodate their travel plans.
How much do Americans spend on summer vacation?
The survey shows that almost three-quarters plan to take one or even two holidays this year. When asked how much they plan to spend per person on their summer trip, respondents answered:
- $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 are planning an expensive getaway, more than 54% have a limit of $1,000 per person.
How Americans pay for summer vacation
The majority of respondents say they have the necessary funds for their vacation. But others made risky payment choices.
And nearly 7% say they don’t know how they pay for their holidays. If you don’t know how you’re going to pay for a trip to the beach, you probably shouldn’t go. Wait until you are sure you have the necessary funds to cover the expenses.
Among survey respondents who know how they pay for their vacation, here are the payment methods they identify:
- Dipping into savings/cash: 65.7%.
- Using a credit card and then carrying a balance: 13.9%.
- Use of credit card rewards: 11.3%.
- Using a buy it now, pay later plan: 6%.
- Take out a personal loan: 3.1%.
It is somewhat alarming that almost one in four intend to borrow money for a holiday, for example by using a credit card and carrying a balance. Carrying a credit card balance is never a good idea. You will pay compound interest on your balance and your debt will grow rapidly.
Buy now, pay later plans are popular. The name alone makes it appealing. Most of these plans include a “Pay in 4” option, which means you make four equal payments on the balance to pay it off, usually over a six-week period.
BNPL plans are considered installment loans, and many do not charge interest. But others apply interest as well as late fees. If your account becomes delinquent, it could end up on your credit report, lowering your credit score. It may not seem like it, but when you accept an BNPL plan, you go into debt.
How to plan a debt-free vacation
I know it’s been stressful dealing with inflation and stock market volatility, but you really don’t want to go on a trip if it’s making your financial situation worse. Here are some strategies you can use to relax without going into debt.
Plan to travel during off-peak hours
This could mean making your trip out of season or flying on days when tickets are cheaper. The best times to travel depend on where you’re going, so do some research and see the price difference between seasons.
If you can be flexible and fly during the week, you can get lower prices on airfares. The increase in gasoline prices has affected the price of a plane ticket, and the prices are high. Do everything you can to reduce flight costs. A great way to do this is to use rewards credit cards.
Use rewards credit cards strategically
The survey shows that nearly 14% plan to use a credit card and carry a balance. It’s a bad idea !
It’s fine to use rewards credit cards to pay for vacations as long as you follow my rule: don’t carry a balance. Pay the invoice in full and on the due date.
If you do this, you can use the cards strategically to maximize the rewards you earn. By strategy, I mean using the credit card that offers the best rewards in a specific situation.
The survey reveals that nearly 64% plan to use the highways this summer. There may be a charge for using a credit card that gives you points or cash back on gas purchases. Seriously, gas is so expensive, every little help counts right now.
Over 30% of respondents plan to fly to their destination. This is your chance to use the travel rewards you’ve earned to pay for the ticket. Some issuers offer ways to increase the value of your points, such as using a travel portal. If so, take advantage and book your itinerary through the portal.
Among respondents who use travel rewards credit cards, 56% earned $700 or less. Over 10% don’t even know how much they’ve earned in rewards. It is possible to earn thousands of dollars a year. I use a combination of travel rewards cards and cash back credit cards. Last year I earned over $4,300 in rewards by using my cards strategically with just a little effort. You can do that too.
And don’t forget that rewards credit cards often come with perks that help you save more on your travels. When asked which benefit is most important to them, nearly 41% of survey respondents choose free checked baggage. This alone can save you hundreds of dollars, depending on the specific card and the weight or number of bags you need to check in.
Create a vacation budget (and stick to it)
You probably have an idea of the price of your trip. But have you thought about stopping on the way up the mountain and buying some snacks for the whole family? Avoid this costly scenario by wrapping holiday gift bags.
You can also save money by renting a condo with a kitchen. Treat yourself a few times, but also host family nights at home with dinner and a movie (also brought from home).
Think about all the expenses you will encounter, then decide where you will go and how long you can stay before spending more money 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 costs. I just explained why you need a budget. When vacationing with a group, it is essential that you have a budget.
Meet with the other parents to determine your joint budget. If there’s an activity the other family wants to do but you can’t afford it, plan to do separate activities that day. Don’t try to negotiate this in front of the children. It won’t end well. Know what you’re paying and what they’re paying before heading to your shared destination.
Start saving now for next summer
I know that’s not what you want to hear. But if you’re one of the nearly 7% who don’t know how they’re going to pay for their vacation this summer, take a step back and think about it.
Do you really want to keep paying for your vacation when the vacation comes? No, you don’t. Postpone the big trip, but plan a few short weekends this summer to get away from the routine.
By next summer, open a savings account exclusively for family vacations, like a high interest savings account with low minimum deposits. Contribute to this account as much as you can each week.