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The holidays are upon us and many Americans are heading out of town. This year, more than 2 in 5 Americans (44%) plan to spend money on flights or hotel stays during the holiday season, spending an average of $1,582. There are over 113 million vacation travelers, spending nearly $180 billion on travel expenses, according to NerdWallet analysis.

A new NerdWallet survey of more than 2,000 American adults — 891 of whom plan to spend on flights or hotel stays during the 2022 holiday season — conducted online by The Harris Poll asked Americans how much they’re spending on vacation travel this year, and how much of what they will charge the credit card. We also asked holidaymakers how they are cutting costs to pay for travel in light of high inflation.

Key findings

Most will put holiday travel expenses on a credit card: About two-thirds of 2,022 holiday travelers (66%) – defined as Americans who plan to spend money on flights/hotels this holiday season – plan to put some or all of their travel expenses on a credit card, charging $1,417 in average. To see also : New UCR travel and fee system launched. That’s more than $106 billion in credit card spending on vacation travel this year.

Some 2021 vacationers still have debt: According to the survey, about 1 in 14 Americans who put 2021 vacation travel expenses on a credit card (7%) still haven’t paid off those balances.

Current airline issues and fuel costs will affect how many choose to travel: Nearly 3 in 10 vacationers in 2022 (29%) say they will drive this year instead of flying because of current airline issues, such as lost luggage and canceled flights. On the other hand, 1 in 5 2022 holidaymakers (20%) plan to fly rather than drive due to fuel costs.

Inflation is a travel cost concern this year: Nearly 2 in 5 vacationers in 2022 (37%) are concerned about how much more it will cost them to vacation this year because of inflation.

Some cut back on everyday expenses, gifts to pay for vacation travel: More than a third of 2022 vacationers (36%) are cutting back on everyday expenses to save money to pay for upcoming vacation travel expenses. More than a quarter of 2022 holiday travelers (27%) plan to spend less on holiday gifts this year to save money for upcoming holiday travel expenses.

“Between inflation, rising demand for travel and ongoing travel industry staffing shortages, high travel costs will put a strain on many budgets this year,” says Sally French, a travel expert at NerdWallet. “So many people are put off by airport chaos and choose to drive. But with such high rental car and gas prices, a car trip isn’t necessarily much better.”

Most holidaymakers use credit cards in 2022

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Most holiday travelers using credit cards in 2022

According to the survey, about two-thirds of 2022 vacationers (66%) plan to put some or all of their travel expenses on a credit card, charging $1,417 on average. Of these travelers, only 1 in 5 (20%) say they pay the balance with the first invoice printout. This may interest you : Vacations with a side of travel anxiety? Trouble is good, but here’s a solution: Francoise Adan. On average, 2022 vacationers who plan to put travel expenses on a credit card think it will take 3 months to pay them off.

About 1 in 7 vacation travelers in 2022 (15%) say they applied for a new credit card to get a sign-up bonus to pay for upcoming vacation travel expenses. Using a credit card isn’t an inherently bad idea; Credit cards can provide consumers with valuable rewards and travel benefits, such as airport lounge access. But it can be an expensive move if you carry a balance instead of paying it off right away.

Holiday travel tip: Create a plan for paying off holiday travel debt. Of the 2,022 vacationers who plan to put travel expenses on a credit card, 12% are not sure when they will pay off the debt. Even if you can’t wipe out the balance with the first statement, it’s important to have a plan to pay it off. Otherwise, the expenses may hang on your credit card until the next holiday and beyond.

If you decide to get a new card, look past the sign-up bonus. Ideally, you won’t want to carry a balance from month to month, but if you know you will, it makes more sense to look for a credit card with a 0% introductory APR. If you go this route, be sure to make at least the minimum monthly payment and make a plan to pay off the balance in full before the introductory rate expires.

“When applying for a credit card, understand your goals and choose a credit card that helps them,” says French. “If you know you’ll be taking on debt to pay for holiday expenses, prioritize low interest rates over rewards, as any rewards earned will almost never be negated by the money you owe in interest.”

For vacationers with international travel plans—like the 16% of 2022 vacationers who plan to travel abroad—credit cards with no foreign transaction fees can cut down on extra costs.

Some are still paying off last year’s travel expenses

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Some still paying off last year’s travel expenses

During the 2021 holiday season, nearly 4 in 5 vacationers (79%) put at least some of their travel expenses on a credit card, but not all paid off those balances. Only 16% of those who charged a credit card for vacation travel for 2021 paid them off with the first assignment. This may interest you : POAC’s Arts & Crafts Fair celebrates its 50th anniversary. And 7% have still not paid off these expenses.

Holiday travel tip: Aim to pay off your holiday travel debt quickly to save on interest. For Americans putting 2021 travel expenses on a credit card, it took them an average of 2.5 months to pay them off. When you don’t pay off your credit card in full by the due date, you’ll accrue interest on the average daily balance for the month. This can be costly, especially if you still have a portion of the balance a year later.

Holiday travel plans are indicative for the times

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Holiday travel plans are indicative of the times

Many Americans’ holiday plans for 2022 appear to be taking into account the year’s current events and issues, namely airline woes, high fuel prices and work flexibility as the pandemic continues.

In recent years, many Americans have moved to hybrid or completely remote work, which can provide more flexibility in travel dates. The survey found that nearly 2 in 5 vacationers in 2022 (38%) plan to avoid busy travel days—like the Sunday after Thanksgiving—by extending the duration of their vacation trips.

Airline issues and fuel costs affect how travelers plan to get to their vacation destinations. About 3 in 10 holiday travelers in 2022 (29%) say they drive instead of fly because of current airline issues, such as lost luggage and canceled flights. On the flip side, 1 in 5 vacationers by 2022 (20%) will fly instead of drive due to fuel costs.

According to the survey, 16% of holiday travelers in 2022 plan to buy or have bought travel insurance for their holiday trips. Over the past few years, many Americans have had to change their travel plans, so some may want to insure themselves.

Holiday tip: Consider whether travel insurance is right for you. Insuring your trip can be a good idea if your trip is otherwise non-refundable and something comes up that makes it necessary to cancel your plans (like testing positive for COVID-19 before you travel). But make sure you understand the limitations of a potential policy to decide whether travel insurance is worth it.

“Travel insurance can be great when it works, but just understand the scenarios where it will work,” says French. “Unless you have the more expensive cancellation for any reason cover, most policies will only reimburse you for covered reasons. Deciding you’re too busy to travel, or fearing travel if COVID-19 cases increase , are otherwise not usually covered causes.”

Travel insurance can save you hundreds of dollars if you have to pay for extra expenses due to travel disruptions. And it may be able to refund you if you cancel non-refundable reservations.

“The reasons covered vary by policy, and they usually require documentation. That said, weather delays are often a covered reason, as is a doctor’s recommendation not to travel,” says French.

Costs are rising, and vacationers are taking steps to save

Costs are up, and holiday travelers are taking steps to save

Most Americans who go on vacation (72%) save in advance for travel expenses, but possibly not far enough in advance. While vacationers save for an average of 8.9 weeks before they travel, 26% of Americans who travel on vacation save for their expenses for 5 weeks or less before their trip.

Annual inflation is up 8.2% from September 2022 and holidaymakers are worried about how it will affect their travel plans. Almost 2 in 5 vacationers in 2022 (37%) are concerned about how much more vacation travel will cost them this year due to inflation.

And most vacationers in 2022 (91%) are taking steps to save money on vacation travel-related expenses this year. The most popular money-saving measures are choosing a flight based on price rather than convenience (39%) and choosing a hotel/motel based on price rather than amenities (38%).

Some vacationers take other steps to cover travel expenses. More than a third of holiday travelers in 2022 (36%) are reducing daily spending to save money to pay for upcoming holiday travel expenses, and more than a quarter (27%) plan to spend less on holiday gifts this year to save money for upcoming holiday travel expenses .

Holiday tip: Start saving for your trip early. Saving for irregular but expected expenses – such as holiday travel – is easiest if you do it throughout the year. But if you haven’t yet started saving for your holiday travel plans, start now to avoid carrying credit card debt into the new year.

“Especially because vacation travel prices are increasing by almost every metric, travelers are wise to take money to save,” says French. “Waking up at 4am for a flight may not feel ideal on holiday, but it can be well worth it. Not checking luggage is my favorite tip. Not only does it save you baggage fees, but it gives you more flexibility should you have to change your flight at the last minute. And given the unpredictability of travel this year, that may be more likely than ever.”

Methodology

This survey was conducted online in the US by The Harris Poll on behalf of NerdWallet from September 8-12, 2022 among 2,013 US adults aged 18 and over, of whom 891 plan to spend on flights/hotels this upcoming holiday season. The sampling precision of Harris online polls is measured using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.8 percentage points using a 95% confidence level. For full survey methodology, including weighting variables and subgroup sample sizes, please contact Mauricio Guitron at [email protected].

The 2022 holiday is defined as November 17, 2022 to January 4, 2023, for the purposes of this study.

We used the U.S. Census population estimates and survey responses to calculate the total number of Americans who plan to spend money on flights/hotels this holiday season, as well as the total travel expenses in total, and the total travel expenses charged to credit cards.

We used the most recent average annual percentage rate data from the Federal Reserve of St. Louis (18.43% as of August 2022) to calculate credit card interest rates.

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