83% of Americans planning an upcoming trip intend to claim at least a portion of the trip cost
In early 2024, U.S. household debt reached a record high of $17.3 trillion, largely due to increased credit card debt, according to data from the New York Fed. At the time the data was collected, one-third of Americans expected to go into debt during 2023, despite the fact that one-quarter had unpaid debts from the 2022 holiday season. It became clear that this was expected to happen. holiday shopping season.
Thus, according to NerdWallet's summer travel survey of 2,000 American adults conducted by Harris Poll, nearly half (45%) of Americans plan to take a trip that involves a flight or hotel stay. No wonder they answered yes. This summer, 83% said they plan to use a credit card for at least some of their upcoming travel. Additionally, 20% (or 1 in 5) of these travelers use a credit card to pay for their travel expenses, but do not pay off the balance within their first billing statement and the balance is carried over. He said there is a risk of high costs. Instead, interest will be charged.
To really put things into perspective, those same travelers say they're likely to spend somewhere in the region of $3,594 on average during their trip. That's more than 118 million Americans spending a total of more than $424 billion on flights and hotel stays this summer. I'm no mathematician, but I have a lot of credit card debt, mainly for travel.
Now, using credit cards for travel is nothing new, and it's not all bad. On the contrary, there are actually many benefits to be gained by using the card of your choice (i.e. miles) for your travels, which should be taken into account when analyzing such data.
That said, this study does show a few things. The first is that Americans are comfortable borrowing money, primarily because household spending continues to grow faster than income. (However, it's worth noting that this was probably done out of necessity.)
Second, the price of travel has increased rapidly in recent years due to certain factors such as inflation. A separate analysis by NerdWallet compiled last spring of Consumer Price Index data from the U.S. Bureau of Labor Statistics showed that travel costs increased 9% over the past year and 20% compared to 2019. This is an indisputable fact. If you're planning a trip abroad in 2024, it's going to be expensive.
Finally, and perhaps most pertinently, this is it. More than ever, Americans are prioritizing travel, even at personal expense. In what could be described as a side effect of the pandemic, people are taking longer trips at an unprecedented pace (taking more time off from work) and spending more on those trips. And who can blame them? Although quarantine is long over, the possibility of being locked down at home still exists. Credit card debt isn't ideal, but clearly for many people it outweighs the risk of not being able to travel at all.
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