Survey Findings
— Almost a quarter of respondents plan to spend $500 or less per person for summer travel.
— Nearly 11% plan to use a credit card to cover travel costs but carry a balance.
— When asked how much they’d be willing to pay for a credit card’s annual fee, 30.9% want to stay under $100 and another 15.7% would go up to $199.
— Only 17.1% plan to use their earned credit card rewards to pay for summer trips.
A late April survey from U.S. News & World Report shows that high prices have made Americans rethink how they want to spend their dollars this summer on vacations. Some are reducing the number of trips they plan to take, and others plan to lower their budgets.
When asked if high prices have changed their plans, here’s how they respond:
— Yes, I’m cutting back on the number of trips: 19.4%.
— Yes, I’m reducing my budget for trips: 25.5%.
— Yes, I’m cutting back in other areas to pay for it: 19.7%.
— Yes, in another way: 14%.
— No, I’m not changing my plans or cutting back: 21.5%.
How Much Are Americans Planning to Spend?
Respondents were asked how much they expect to pay per person for summer travel. Nearly a quarter plan to spend $500 or less per person.
Here’s a breakdown of the responses:
— $500 or less: 24.5%.
— $501 to $1,000: 25.6%.
— $1,001 to $2,000: 20.8%.
— $2,001 to $3,000: 14.9%.
— $3,001 to $4,000: 6.3%.
— $4,001 to $5,000: 4.5%.
— $5,001 or more: 3.4%.
[Read: Best 0% APR Credit Cards.]
How Do They Plan to Pay for It?
Respondents were asked how they were going pay for their vacations, and almost four in 10 say they are paying travel expenses with cash. Here are the results:
— Cash: 39.3%.
— Use credit card, but won’t carry a balance: 23%.
— Pay with credit card rewards: 17.1%.
— Use credit card and carry a balance: 10.8%.
— Don’t know: 3.8%.
— Use buy now, pay later: 3.1%.
— Take out a personal loan: 2.9%.
Only a tad over 17% plan to use their earned credit card rewards to pay for summer trips. Respondents were asked how much they earned in credit card rewards over the past year.
The findings:
— $350 or less: 28.1%.
— $351 to $700: 18.3%.
— $701 to $1,050: 15.3%.
— $1,051 to $1,400: 9.7%.
— $1,401 or more: 5.9%.
— Don’t know: 7.8%.
If you earn any credit card rewards, I applaud you. But only 5.9% with a rewards card earned over $1,400 in the past year. With a little strategy, you can double that. Maybe even triple it!
5 Ways to Maximize Credit Card Rewards
If you’re just starting out with rewards cards, all it takes is practice and a little patience to earn enough to save on vacation. I earn thousands of dollars in rewards every year. You can, too, if you learn a few tricks.
Clarify Your Travel Goals
Whether you’re going to travel alone, with a significant other or with a large family, write down down your bucket list of places you want to visit. This exercise also helps you focus on the type of rewards credit cards that will make your travel dreams turn into reality.
And, by the way, nothing is permanent. My travel goals have changed over the years, and yours will, too. This is just a blueprint to help you make the right credit card decisions.
[Read: Best Travel Rewards Credit Cards.]
Earn the Welcome Offer
Don’t underestimate the value of welcome offers. With travel, and airline- and hotel-branded rewards cards, these offers can add up to free flights or hotel stays.
You might get an offer, say, for a bonus of 80,000 points if you spend $4,000 within three months of opening your account. Depending on the rewards program and the value of each point, this could cover the cost of a plane ticket. Not to mention additional benefits some cards have, such as waived baggage fees.
Use the card to pay for your everyday expenses, and it will be easy to meet the spending requirement within three months. But do not use the potential bonus to justify impulsive purchases, because you could end up in debt. That’s the wrong way to use a rewards credit card. These cards have higher interest rates, so you never want to carry a balance.
Use a Combination of Cards
In the survey, respondents were asked how they were getting to their destinations. The most popular choice was by car, with airline travel coming in second.
The findings:
— By car: 58.3%.
— By air: 34.4%.
— By rail: 2%.
— By boat: 2.3%.
— By bus: 3%.
If you know that you’ll take at least one road trip, consider getting a cash back credit card that offers gas rewards. You can use your gas rewards card on your trip as well as when you fill your tank throughout the year.
The key to maximizing rewards? Take a look at your budget and make sure you have a credit card that has rewards that match your spending patterns. With practice, you’ll instinctively know which card to use at the right time.
There are also some opportunities to pool credit card rewards from the same issuer. For example, Chase offers Ultimate Rewards. You can use the Chase Sapphire Preferred Card and Chase Freedom Unlimited and combine earnings.
You do have to spend time understanding the rewards programs of various credit cards, but, trust me, it’s worth the time it takes. However, if you prefer simplicity, I understand that, too. There are plenty of rewards programs that offer across-the-board rewards based on the amount you spend with the card. For example, you spend a dollar and you earn 1 mile.
In the next section, I’ll reveal the amazing trips I’ve taken with credit card rewards.
[Read: Best Gas Credit Cards.]
Use Your Rewards for Travel Expenses
Over the years, I’ve used credit card rewards to fly free to Maui, Kauai, Cancun, Aruba, San Francisco, New York, Miami (to get to Key Largo), Virgin Islands, Cayman Islands, Germany, England and more.
My next credit card rewards adventure? I used credit card rewards to book two first-class tickets to Maui in September. My husband and I were there for our honeymoon 35 years ago. We’re going back the same week we honeymooned there in 1988. While we’re there, we’ll use rewards cards to pay for our activities.
I’ve also used the benefits and perks that come with my cards. For instance, I’ve used a variety of credit cards to waive baggage fees for those in my party, take advantage of car rental insurance, access priority boarding (I’m petite and I like to get on first!), upgrade my seat, get discounts on in-flight purchases and avoid foreign transaction fees.
You can not only travel for free, or at least with deep discounts, but you also can do it in style.
Be Aware of Transfer Opportunities
Many credit cards also have partnerships with other airlines (or hotels) so you can transfer points or miles. Survey respondents were asked if they had ever transferred credit card rewards to one of the program’s partners. For example, airlines often partner with other airlines, which gives you some flexibility.
About 46% say they had transferred points, but 54.2% report that they had not done this. Whether you take advantage of the opportunity is up to you and your travel needs. But be aware that this is an option should you ever want to use it. To really maximize your redemption options, it’s good to know what’s available to you.
More from U.S. News
My Credit Card Rewards Got Me These Amazing Experiences
Start Now to Earn Credit Card Rewards for Holiday Travel
How to Choose a Credit Card: 5 Simple Steps
Survey: Nearly 79% Say Inflation Has Affected Summer Travel Plans originally appeared on usnews.com
