I love the late sunsets and warmer weather this time of year. I live in New York, so it's not quite summer yet, but the weather has definitely gotten nicer. And the town pool opens in about a week, so visions of lazy summer days dance in my head.
My wife is also a planner, so our summer vacation plans were made a while ago. But many people are still thinking about their summer itinerary. About one in five Americans (18%) were unsure of their summer vacation plans, according to Bankrate's summer travel survey released last month. Some 53 percent were definitely planning a summer vacation, and 29 percent were not.
If you are still hesitant, my advice is to book as soon as possible, especially if you plan to travel by plane. Last year was a record year for air travel, as measured by TSA Passenger Screening, and this year, it is 6% ahead of this pace (as of May 13). Competition is strong for a still-limited supply of airplane seats, as mechanical shortages and business decisions continue to result in crowded planes.
The cost of summer travel
The good news is that prices have fallen slightly. THE April Consumer Price Index found that car and truck rental costs fell 10 percent over the past year, airfares fell 6 percent, and “other non-home accommodations, including hotels and motels” , fell by about half a percentage point.
Yet with inflation straining many areas of the household budget, many Americans don't have much extra money to spend. Among those who won't travel this summer, 65% of Americans say they can't afford it — by far the most common explanation. That's an increase from 58 percent a year ago.
The second most common response was “I'm not interested in taking a vacation at the moment” with only 24% (happy for them: they may be retired and every day is a vacation). Although everyone should take time to relax, recharge, and enjoy the company of family and friends this summer, fewer than half of Americans are taking advantage of all the paid time off available to them. according to Pew Research.
Of course, it's wise to avoid credit card debt whenever possible, because average credit card rate or a whopping 20.66 percent. Alarmingly, 38 percent of American adults ready to go into debt this year for discretionary purchases such as travel (27%), restaurants (14%) and entertainment (13%).
It is as disturbing as two in three Americans in credit card debt seek rewards. Don't pay 20% or more in interest just to earn 1, 2, or 3 percentage points in cash back or airline miles. If you have credit card debt, give debt repayment strategies – including registration for a balance transfer credit card with a long interest-free period of up to 21 months – a trial.
Travel Tips to Save Money
Remember, credit card rewards are only worth it if you can pay the full amount to avoid interest each month. That said, tapping into your existing stash of rewards points and miles can be a valuable way to maximize your vacation this summer. Here are some ways to save:
Use reward points and miles
About a quarter of rewards credit card holders has not used any rewards in the last year, according to a 2023 survey commissioned by our sister site CreditCards.com. Especially if you haven't redeemed in a while, you could end up with hundreds or even thousands of dollars in free travel. Take stock of your credit card rewards, frequent flyer miles, hotel points and other loyalty programs. You might have a lot more value in sitting still than you think.
Do not forget unused gift cards and travel vouchers, either. About half of us have some lying around, and the average is about $200 per person. I recently cashed in about $200 in airline vouchers for a canceled trip in 2023; they were soon to expire.
Zig when others zag
Another great way to reduce your travel costs is to take the road less traveled. As in, let the deal dictate when and where you go. Flexibility is key. If you want to go to the beach this summer but don't really care which beach, cast your net wide. Traveling to a destination during its shoulder or off-season often adds up to a lot. I've enjoyed phenomenal flight deals to Florida in the summer, while prices tend to be exorbitant during my kids' February school breaks.
Along the same lines, flying midweek is usually cheaper than flying on the weekend, and road trips can be even cheaper than flying somewhere. If hotel prices shock you, try a home rental site like Airbnb or VRBO. The more open-minded and flexible you are with your dates and location, the better. You're much more likely to go over budget if you have your heart set on a specific location at a specific time.
Establish a good budget
I know, budgeting is a dirty word to a lot of people. You know you have to do it, but it seems boring and like it's all about depriving yourself of the good things, right? It doesn't have to be that way. Done right, a budget can free up money for things you care about, including vacations.
Many people don't establish a budget, or if they do, they only consider necessities such as housing and food. Build a line item into your budget for entertainment or travel, if you can. Next, try putting money aside from every paycheck, ideally in a high-yield savings account (some of the best savings accounts yield greater than 5 percent per year).
It's a great way to set aside money for a specific purpose and ensure you have the money you need to finance your travels instead of racking up credit card debt. Bonus points if you create a separate account (like “summer week at the beach” or “Paris 2025”) — some sources suggest that people are more motivated to save and less likely to withdraw from the account when a specific purpose is assigned to the funds.
If all else fails, plan a staycation
It can be fun and rejuvenating to play tourist in your area. We are all busy with our daily lives and don't have enough time to explore our own backyard. You can take this literally and relax or picnic in your backyard, or you can visit that local art museum, hiking trail, or theater (or whatever you always thought would be fun but that you never had time to try).
One in eight Americans are planning a vacation this summer, according to Bankrate's Summer Vacation Survey. I would like to see more people join this group, especially if the alternative works all summer. Don't let the opportunity pass you by.
The essential
There are plenty of ways to have fun this summer, whatever your budget. With a little planning and creativity, I'm confident you can have a great summer getaway, whether you're traveling near or far.
Do you have a question about credit cards? Send me an email at ted.rossman@bankrate.com and I would be happy to help you.
