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The holidays are upon us and many Americans are getting 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 $1,582, on average. That’s over 113 million holiday travelers, spending nearly $180 billion on travel expenses, according to NerdWallet analysis.
A new NerdWallet survey of more than 2,000 U.S. adults — 891 of whom plan to spend money on flights or hotel stays during the 2022 holiday season — conducted online by The Harris Poll asked Americans how much they’re spending on holiday travel this year, and how much of it they’ll charge to credit cards. We also asked holiday travelers how they’re cutting costs to pay for travel in light of high inflation.
Most will put holiday travel expenses on a credit card: Around two-thirds of 2022 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, on average. That’s more than $106 billion in credit card spending on holiday travel this year.
Some 2021 holiday travelers still have debt: According to the survey, around 1 in 14 Americans who put 2021 holiday travel expenses on a credit card (7%) still haven’t paid off those balances.
Current airline issues and fuel costs will impact how many choose to travel: Close to 3 in 10 holiday travelers in 2022 (29%) say they’ll drive this year rather than fly due to current airline issues, like lost baggage and canceled flights. On the other hand, 1 in 5 2022 holiday travelers (20%) plan to fly rather than drive due to fuel costs.
Inflation is a concern for travel costs this year: Nearly 2 in 5 holiday travelers in 2022 (37%) are worried about how much more it will cost them for holiday travel this year due to inflation.
Some cutting back on everyday spending, gifts to pay for holiday travel: More than a third of 2022 holiday travelers (36%) are reducing everyday spending in order to save money to pay for upcoming holiday travel expenses. More than a quarter of 2022 holiday travelers (27%) plan to spend less on holiday gifts this year in order to save money for upcoming holiday travel expenses.
“Between inflation, rising demand in travel and ongoing staffing shortages within the travel industry, high travel costs are set to put a strain on many budgets this year,” says Sally French, a NerdWallet travel expert. “So many people are turned off by airport chaos and are opting to drive. But with rental car and gas prices so high, a road trip might not necessarily be much better.”
Most holiday travelers using credit cards in 2022
According to the survey, around two-thirds of 2022 holiday travelers (66%) plan to put some or all of their travel expenses on a credit card, charging $1,417, on average. Of these travelers, just 1 in 5 (20%) say they’ll pay off the balance with the first billing statement. On average, 2022 holiday travelers who plan to put travel expenses on a credit card think it will take 3 months to pay them off.
Around 1 in 7 holiday travelers in 2022 (15%) say they’ve applied for a new credit card to get a sign-up bonus to help pay for upcoming holiday travel expenses. Using a credit card isn’t an inherently bad idea; credit cards can provide consumers with valuable rewards and travel benefits, like 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: Make a plan to pay off holiday travel debt. Of 2022 holiday travelers who plan to put travel expenses on a credit card, 12% aren’t sure when they’ll pay off the debt. Even if you can’t wipe out the balance with the first statement, it’s important to have a plan for paying it off. Otherwise, the expenses could linger on your credit card until next holiday season and beyond.
If you decide to get a new card, look beyond the sign-up bonus. Ideally, you don’t want to carry a balance from month to month, but if you know you’re going to, it makes more sense to look for a credit card with a 0% introductory APR. If you go this route, make 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 to support them,” French says. “If you know you’re going to take on debt to pay for holiday season expenses, prioritize low interest rates over rewards, as any rewards earned will almost never be negated by the money you’ll owe in interest.”
For holiday travelers with international travel plans — like the 16% of 2022 holiday travelers who plan to travel abroad — credit cards with no foreign transaction fees can cut down on extra costs.
Some still paying off last year’s travel expenses
During the 2021 holiday season, nearly 4 in 5 holiday travelers (79%) put at least some of their travel expenses on a credit card, but not all of them paid off these balances. Just 16% of those who charged 2021 holiday travel expenses to a credit card paid them off with the first statement. And 7% still haven’t paid off these expenses.
Holiday travel tip: Aim to pay off holiday travel debt quickly to save on interest. For Americans who put 2021 holiday travel expenses on a credit card, it took them 2.5 months, on average, to pay them off. When you don’t pay off your credit card in full by the due date, you’ll accrue interest on your average daily balance for the month. This can be costly, especially if you’re still carrying part of the balance a year later.
Holiday travel plans are indicative of the times
Many Americans’ 2022 holiday travel plans seem to take 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 transitioned to hybrid or fully remote work, which may allow for more flexibility in travel dates. The survey found that nearly 2 in 5 holiday travelers in 2022 (38%) plan to avoid busy travel days — like the Sunday after Thanksgiving — by extending the duration of their holiday trips.
Airline issues and fuel costs are impacting how travelers plan to get to their holiday destinations. About 3 in 10 holiday travelers in 2022 (29%) say they’re driving rather than flying due to current airline issues, like lost baggage and canceled flights. On the flip side, 1 in 5 holiday travelers in 2022 (20%) are flying rather than driving due to fuel costs.
According to the survey, 16% of 2022 holiday travelers plan on buying 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 travel tip: Consider whether travel insurance is right for you. Insuring your trip could be a good idea if the travel is otherwise nonrefundable and something comes up that makes it necessary to cancel your plans (like testing positive for COVID-19 prior to travel). But make sure you understand the limitations of a potential policy to determine if travel insurance is worth it.
“Travel insurance can be great when it works, but just understand the scenarios where it’ll work,” French says. “Unless you’ve got the more expensive Cancel For Any Reason coverage, most policies will only reimburse you for covered reasons. Deciding you’re too busy to travel, or fear of traveling should COVID-19 cases spike, are otherwise not commonly covered reasons.”
Travel insurance can save you hundreds of dollars should you have to pay for extra expenses out-of-pocket due to travel disruptions. And it may be able to reimburse you if you cancel nonrefundable reservations.
“Covered reasons vary by policy, and they typically require documentation. That said, weather delays are often a covered reason, as is a doctor’s recommendation to not travel,” French says.
Costs are up, and holiday travelers are taking steps to save
Most Americans who travel for the holidays (72%) save ahead of time for travel expenses, but possibly not far enough in advance. While holiday travelers save for 8.9 weeks on average prior to travel, 26% of Americans who travel for the holidays save for their expenses for 5 weeks or fewer in advance of their trip.
Annual inflation is up 8.2% as of September 2022, and holiday travelers are concerned about how it will impact their trip plans. Nearly 2 in 5 holiday travelers in 2022 (37%) are worried about how much more holiday travel will cost them this year due to inflation.
And most 2022 holiday travelers (91%) are taking action to save money on their holiday travel-related expenses this year. The most popular money-saving moves are choosing a flight based on price instead of convenience (39%) and choosing a hotel/motel based on price instead of amenities (38%).
Some holiday travelers are taking other steps to help cover travel expenses. More than a third of 2022 holiday travelers (36%) are reducing everyday spending in order 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 in order to save money for upcoming holiday travel expenses.
Holiday travel tip: Start saving for travel early. Saving for irregular, but expected, spending — like holiday travel — is easiest if you do it year-round. But if you haven’t yet begun saving for your holiday travel plans, start now to avoid carrying credit card debt into the new year.
“Especially because prices for holiday travel are up by nearly every metric, travelers are wise to take money-saving actions,” French says. “Waking up at 4 a.m. for a flight might not feel ideal on vacation, but it can be well worth it. Not checking bags is my favorite tip. Not only does it save you the bag drop fee, but it affords you more flexibility should you need to change your flight last minute. And given the unpredictability of travel this year, that might be more likely than ever.”
This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from Sept. 8-12, 2022 among 2,013 U.S. adults ages 18 and older, among whom 891 plan to spend money on flights/hotels this upcoming holiday season. The sampling precision of Harris online polls is measured by 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 complete survey methodology, including weighting variables and subgroup sample sizes, please contact Mauricio Guitron at [email protected].
The 2022 holiday season is defined as Nov. 17, 2022, to Jan. 4, 2023, for the purposes of this study.
We used 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 overall, 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.
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