According to NerdWallet's 2024 Summer Travel Report, nearly half (45%) of Americans are planning a summer trip that requires a flight or hotel stay, with the average spend expected to be $3,594. While most travelers plan to cover some of the cost of their trip with debt, some don't plan on paying it off anytime soon. Here are some things to consider for summer travel in 2024 and ways to cut costs.
If you're planning on spending money on travel as the days get longer, sunnier and warmer, be careful. You may find yourself continuing to pay off high-interest debt throughout the fall and winter.
According to NerdWallet's Summer 2024 Travel Report, nearly half (45%) of Americans are planning a summer trip that involves a flight or hotel stay, and the average spend is expected to be $3,594. Masu.
The majority of travelers (83%) will pay for a portion of their vacation with a credit card. However, NerdWallet found that 20% won't allow you to pay off the balance in full within the first billing statement. The report surveyed 2,092 U.S. adults from January 30 to February 1, 2024.
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“Travel spending is not slowing down,” said Haley Berg, lead economist at Hopper.
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“It’s even more cost-effective.”
According to Hopper's 2024 Travel Outlook, three-quarters of Hopper users say they plan to spend the same amount or more on travel this summer.
“But they're trying to make more money by getting more trips out of a bigger budget or the same size budget,” she says.
According to the outlook, approximately 86.6% of Hopper users are planning to travel this summer, while 72.5% have not yet booked a trip.
“It never ceases to amaze me how many people wait until the last minute to book their vacation,” Berg said.
Fortunately for travelers, airfares are down 5.8% year over year, according to the Consumer Price Index.
Domestic airfares averaged about $305 in June, July and August, down 6% from the same period last year, Hopper said. According to Hopper data, prices are expected to peak at $315 per ticket from the end of May to early June.
“This is a significant improvement over the price increases we have seen year after year,” Berg said.
But other costs associated with air travel are also rising. For example, many major airlines, including United Airlines, American Airlines, and JetBlue Airways, have increased their checked baggage fees this year.
“Most airlines have increased their fares by $5,” said NerdWallet's travel rewards expert Sally French, adding, “That usually means around $35 becomes $40… an extra $40 round trip. It will be done,” he said.
Some cardholders may think that carrying a balance with them when going on vacation or paying for large purchases is a good thing, as it helps show that they are using the card. Mr. French says.
That's a common misconception. According to data from NerdWallet, as of 2022, about 46% of Americans believed that carrying a balance on a credit card would be better for their score than paying it off in full.
“There are a lot of misconceptions about credit cards,” French said. “Carrying a balance on your credit card isn't necessarily good for your credit score.”
Carrying a balance can actually increase your credit utilization ratio and hurt your score. Additionally, the average interest rate on credit cards is over 20%, further increasing the cost of that purchase.
Cardholders already carry $1.12 trillion in credit card debt, with an average balance of $6,218 per consumer, according to a new report from the Federal Reserve Bank of New York.
“If you haven't made a reservation yet, please make one now.”
By planning and budgeting wisely, you can easily reduce your travel expenses and avoid carrying a balance. Here are his three strategies for you to try.
1. Book your summer travel plans now: The earlier you book your travel plans, the lower the initial cost tends to be. Domestic ticket prices in the U.S. tend to rise the weekend before Independence Day week, Memorial Day weekend, and Labor Day weekend, according to Hopper data.
“If you haven’t made a reservation, please do so now,” Berg said.
The “sweet spot” for international travel is 3 to 5 months in advance. If you're planning a trip in August, now is the time. For domestic flights, the best time to book is about 2 to 3 months in advance if you are traveling in the summer. There may still be time to book a trip for late summer or early fall, she explained.
2. Be as flexible as possible. If possible, avoid departures on Thursday or Friday nights. Try booking a flight for Tuesday or Wednesday. If you fly midweek, you can save about $50 per domestic ticket and “much more” on international flights, Berg said.
If your travel dates are flexible, book your vacation in early October instead of just September and get a 30% discount on hotel and airfare. And, “weather is generally as good and crowds are light in many destinations,” Berg said. “It's an easy way to save money and enjoy the tourist experience a little bit more.”
2. Save money on food: When budgeting for a trip, travelers typically focus on the cost of hotels and flights, which are typically booked and paid for in advance, French said. When travelers review their spending, she says, they are often surprised by restaurant prices and are “shocked by how high they are.”
Look for options to save money on food by taking advantage of counter service options rather than table service. Alternatively, you can go to your local farmers' market or supermarket and make something yourself so he can eat a meal or two.
“For many people, eating out is a big part of their trip, so you may not want to skip it completely,” French says.
3. Take advantage of credit card benefits: Some credit cards offer perks and perks on dining and travel expenses, including checked baggage fees. French said the benefit could also extend to others traveling with you.
But this is not a last-minute measure. It takes some time between applying and receiving your new card. “You have to apply for this credit card in advance, which is where a lot of people get stuck,” she says.
