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this article is reprinted with permission from NerdWallet.
According to travel booking app Hopper, in 2022, holiday travel is expected to continue to climb back towards its pre-Covid-19 level. That means more of us on the road, at the airport, and huddled around plates of overcooked turkey and mashed potatoes. For many Americans, that trip comes at a high price, often paid for with a credit card.
A new NerdWallet survey found that 44% of Americans plan to spend money on flights or hotels during the 2022 holiday season. Of those vacation travelers, nearly two-thirds (66%) plan to put some or all of their card bills on of credit
If you’re planning to join the ranks of holiday travelers, here are some tips to get you through the season with as little financial stress as possible.
The keys to take
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Compare the cost and hassle of travel methods, as the way you’ve always done it may not be the best.
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Find ways to reduce what you spend on your credit card or ways to pay off your balance faster in 2023.
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The best time to look at cards with better rates and benefits is before you start buying plane tickets and booking hotels.
1. Compare travel options
The way you always travel doesn’t have to be the way you always travel. As creatures of habit, we tend to take the same familiar paths to get from point A to point B, even though other routes may be faster, cheaper, or more efficient.
According to the US Energy Information Administration, the price of gas increased by 16.7% from September 2021 to September 2022. If you used to save $100 on your trip to grandma’s house by driving, you could be saving a lot less now , if applicable. Our survey found that 20% of holiday travelers plan to fly rather than drive due to fuel prices.
Instead, maybe you’ve always flown. As airports begin to restock with travelers, more flights are being delayed or canceled. As of July this year, 21% of flights were delayed 15 minutes or more and 3% were canceled, according to the Department of Transportation. The survey found that 29% of holiday travelers now plan to drive due to current issues with airlines.
Whether it’s to lower costs or avoid headaches, rethinking the usual calculation of flying versus driving can be a helpful first step toward stress-free vacation travel.
read: More ways to save gas, and you might not like some of them
2. Start saving and plan for repayments
No matter how you get there, traveling during the holidays is an expensive proposition for many Americans. While 66% of vacation travelers plan to put some or all of their vacation travel costs on a credit card, many also expect to save to pay for their plans, according to our survey. Among vacation travelers, just over a third (36%) say they are cutting back on daily spending to save money to pay for that trip.
With interest rates expected to continue rising through 2023, according to a Federal Reserve survey, the cost of credit card loans is likely to continue to rise as well. By setting aside money for cash purchases, you can avoid adding to your debt obligations after the holidays.
Read: 8 Signs You Need a New Credit Card
However, if you’re going to break out the plastic for your vacation trip, you should at least have a plan for how much you’ll spend and how you’ll pay off that debt in 2023. Of those who put part of their vacations on credit card travel in 2021, 7% reported in our survey that they still haven’t paid off those expenses, and another 14% told us it took 5 to 12 months to pay off their debt.
To avoid your flights or gas bills approaching the Fourth of July next year, set up a repayment plan. You can start with NerdWallet’s credit card repayment calculator to figure out how much you’ll need to repay. Then roll that payment into a monthly plan so you can pay off your debt and start saving for your 2023 vacation.
Read more: You work hard to pay off debt. Here’s the surprising secret that keeps you from going backwards while the economy slows down
3. Review your credit card options
According to our survey, vacation travelers who say they will use their credit cards to pay for vacation travel-related expenses plan to spend $1,417 on those cards, on average.
Spending that much in a short period of time can give you new options when it comes to card rewards or offers. Many credit card companies offer bonuses if you spend a certain amount in the first few months of having a card. If you’re already shelling out, you might as well get a profit where you can.
You can also get benefits that reduce your travel headaches. Many travel cards offer extra points when you book travel, annual statement credits for travel purchases, or reimbursement for the cost of programs that let you get through airport security faster or easier (like Global Entry or TSA PreCheck).
see: The best and worst days to fly for Thanksgiving
You may also find that your current card has an APR that’s less attractive when you’re carrying a $1,400 balance from the holidays. In that case, it might be worth considering a new balance transfer card to carry your travel spend into the new year. These cards offer a 0% APR on balance transfers, giving you more time to pay off your debt without having to pay interest.
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Andrew Marder writes for NerdWallet. Email: [email protected].
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