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If you happen to plan to spend money on travel because the days get longer, sunnier and warmer, watch out: It could leave you with high-interest debt you’ll still be paying off through the autumn and winter.
Almost half (45%) of Americans plan to take a summer trip requiring a flight or hotel stay, and so they expect to spend a median $3,594, in accordance with NerdWallet’s 2024 summer travel report.
Nearly all of travelers, 83%, can pay for a part of their vacation costs with a bank card. But 20% won’t repay the balance in full throughout the first billing statement, NerdWallet found. The report polled 2,092 U.S. adults from Jan. 30 to Feb. 1, 2024.
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“Travel expenditure shouldn’t be slowing down,” said Hayley Berg, lead economist at Hopper.
The summer wedding season may contribute to travel debt. About 31% of recent wedding guests took on debt, in accordance with a latest study by LendingTree. Of those that paid with credit, the price of travel (32%) and accommodations (27%) racked up the very best bills, LendingTree found.
‘More bang for his or her buck’
Three quarters of Hopper users said they plan to spend the identical or much more on their travels this summer, the 2024 Travel Outlook by Hopper found.
“But they are attempting to get more bang for his or her buck,” she said, by getting more trips out of the larger or same-size budget.
About 86.6% of Hopper users expect to travel this summer, but 72.5% haven’t booked their trips yet, in accordance with the outlook.
“It never surprises me how many individuals wait until the last minute to book their vacation,” Berg said.
Fortunately for travelers, airfares are down 5.8% from a 12 months ago, in accordance with the consumer price index.
Domestic airfare for the months of June, July and August cost around $305 on average, down 6% from this time last 12 months, in accordance with Hopper. Prices are expected to peak at $315 per ticket at the tip of May and early June, per Hopper data.
“That could be a vast improvement over the costs increases that we’ve got been seeing every 12 months,” Berg said.
![EasyJet sees 'positive momentum' going into the summer travel season, CEO says](https://image.cnbcfm.com/api/v1/image/107415730-17158415121715841509-34546097869-1080pnbcnews.jpg?v=1715841511&w=750&h=422&vtcrop=y)
But other costs related to air travel have gone up. As an example, many major airlines like United Airlines, American Airlines and JetBlue Airways increased their checked baggage fees this 12 months.
“Most airlines raised their fees by five dollars,” said Sally French, travel rewards expert at NerdWallet.”That typically means something like 35 dollars now becomes 40 dollars … That is an extra 40 dollars there for a round trip.”
Some cardholders may imagine that carrying a balance while they repay a vacation or other big-ticket purchase is sweet since it helps to indicate they’re using the cardboard, said French.
That is a typical misconception. In 2022, about 46% of Americans believed that leaving a balance on their bank card is best for his or her rating than paying it off entirely, in accordance with NerdWallet data.
“There are a lot of myths about bank cards,” French said. “Leaving a balance in your bank card shouldn’t be necessarily good on your credit rating.”
The truth is, carrying a balance can increase your credit utilization ratio, which has the potential to ding your rating. Plus you are adding to the expense of that purchase, with average bank card rates of interest topping 20%.
Cardholders already owe $1.12 trillion in bank card debt, with a median balance of $6,218 per consumer, in accordance with a latest report by the Federal Reserve Bank of Latest York.
‘If you’ve got not booked, book now’
Smart planning and budgeting can enable you cut travel costs and make it easier to avoid carrying a balance. Listed below are three strategies to try:
1. Book summer travel plans soon: The earlier you book your travel plans, the lower the upfront cost will are inclined to be. Prices for domestic flights within the U.S. are inclined to spike the weekend before 4th of July week, Memorial Day weekend and Labor Day weekend, per Hopper data.
“If you’ve got not booked, book now,” Berg said.
“The sweet spot” for international trips is three to 5 months upfront; when you plan on taking a visit in August, now’s the time. For domestic flights, about two to 3 months upfront is best for summertime trips. You may still have time to book late summer, early fall trips, she explained.
2. Be as flexible as you possibly can: If you happen to are able, avoid departing on Thursday or Friday nights; try booking flights on Tuesdays or Wednesdays. Flying in the midst of the week can save about $50 per ticket on domestic airfare, and “a complete lot more” on international, Berg said.
If you happen to’re flexible in your trip dates, booking vacations for September and even early October can prevent 30% off hotel and airfare prices. And “the weather is often just nearly as good, fewer crowds in lots of destinations,” Berg said. “Easy solution to lower your expenses and now have just a little bit less of a tourist experience.”
2. Save on food costs: When budgeting for a vacation, travelers give attention to hotel and flight costs because they typically book and pay for those upfront, said French. Restaurant prices are sometimes a surprise when travelers review their spending and “are shocked by how high it’s,” she said.
Search for options to avoid wasting on food costs by going to counter-service options over table service. Or go to an area farmers market or supermarket and cook something on your personal for a meal or two.
“Dining out is a large a part of a number of people’s trips, so you may not wish to skip that entirely,” French said.
3. Leverage bank card rewards: Some bank cards offer advantages and rewards on dining and travel expenses similar to checked bag fees. They may also extend those perks to other people you are traveling with, French said.
But this is not a last-minute move: It takes time to use after which receive your latest card. “Many individuals get tripped up since you do must apply for this bank card ahead of time,” she said.