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It has been a blockbuster summer travel season. From May 26 (the Friday of Memorial Day Weekend) through July 31, the Transportation Security Administration processed 12 percent more air travelers than the same dates a year ago.
Wasn’t 2022 supposed to be the year of “revenge travel?” In some respects, it was, since airline passenger volumes surged 17 percent from 2021 levels, using the same TSA dataset and timeframe. The fact that air travel volume has taken another leap forward this year surprises me.
I thought a lot of people got the pent-up demand out of their system last year, as COVID-19 restrictions and fears eased. This year, the financial conversation has been dominated by high inflation, high interest rates and recession worries. I thought that would lead to discretionary spending cutbacks, yet Americans are still spending aggressively, especially in experiential categories such as travel, dining and live entertainment.
Travelers are setting some limits, however
Earlier this year, we found that 80 percent of summer vacationers changed their plans due to inflation by selecting less expensive accommodations and/or destinations (29 percent), engaging in cheaper activities (28 percent), traveling for fewer days (26 percent), taking fewer trips (26 percent) and driving rather than flying to their destination (also 26 percent).
In other words, people didn’t want to skip the trip entirely, but they were willing to cut some corners to save money.
It’s no wonder that most people who have traveled this year (53 percent) have reported higher prices than they’re accustomed to. I’m actually shocked that figure isn’t higher. High travel demand and limited supply have led to other problems as well, such as long waits (cited by 25 percent of travelers), poor customer service (24 percent), canceled or disrupted plans (23 percent) and hard to find availability (23 percent).
So far, 2023 has been the worst year for U.S. flight delays since 2014, although cancellations are down sharply from last year, according to the Bureau of Transportation Statistics.
Credit cards can help alleviate many of these concerns
Unfortunately, only one out of every five Americans who has traveled or will travel for leisure purposes this year intends to use rewards points or miles more frequently as a way to cut costs, our sister site CreditCards.com reported. Credit card rewards, frequent flyer miles and hotel points can all be great ways to enjoy champagne travel on a beer budget. Just like unused gift cards, these represent real value that you should try to unlock as soon as possible.
Many credit cards also come with valuable travel insurance protections that can help you out if your trip is delayed or canceled, if your luggage is lost or delayed, if you become sick or injured while traveling, if you crash your rental car and so on.
Plenty of travel credit cards can also help you speed through airport security and customs by paying for your TSA PreCheck or Global Entry membership.
And credit cards that offer free concierge services might be able to help you find hard-to-obtain travel bookings, restaurant reservations or event tickets.
These are all great ways to get your credit cards working for you. The one big caveat is that you should make every effort to pay your credit card bills on time and in full every month. The average credit card charges over 20 percent, so carrying a balance erodes the value of your rewards and other perks very quickly.
Spinning it forward to the holidays
While you may not be eager to trade your flip-flops for winter boots just yet, this is actually an ideal time to start thinking about holiday travel, particularly from a credit card rewards perspective.
If you’re planning to use your existing rewards points and miles, the best availability often goes to the early birds. Sadly, almost a quarter of rewards credit cardholders didn’t redeem any of their rewards over the past year. Don’t be a points hoarder — look for opportunities to earn and burn your rewards strategically.
And when it comes to sign-up bonuses, consider paying for all or most of your upcoming holiday travel by adding a new card to your wallet. A holiday getaway may seem far away, but it’s actually getting a little late in the game to employ this strategy for the holidays.
You typically have to spend a certain amount (often a few thousand dollars) within your first few months with the new card, then you might get the points on the statement after that, and then you need to actually book the trip. To get the best availability, today’s credit card sign-up bonuses might be even better suited for Spring Break 2024.
The bottom line
Travel isn’t cheap or easy these days, but demand is high. Using the right credit card strategies can save money and provide you with added peace of mind.
Have a question about credit cards? E-mail me at firstname.lastname@example.org and I’d be happy to help.