Whether heading home to visit family and friends or just fleeing to vacation hot spots, many Americans are planning to pack their bags for the coming winter holidays.
Here’s a look at how many of us will hit the road and how much we’ll spend.
That’s good news for sellers of travel, but what about for the travelers themselves? Well, in addition to holiday memories, many will be left with some debt, too. Of those Americans taking a trip over the holidays, 81.2 million (some 71% of travel spenders) plan to put those expenses on a credit card, charging an average $1,105.
That’s down from about $1,400 in 2018, a dip Kimberly Palmer, personal finance expert at Nerdwallet, said is attributable to consumer skittishness. “In a related study on holiday spending, we asked specifically about feeling about the economy, and we found a significant portion of Americans are concerned about it and may be scaling back spending as a result.”
Regardless of how much they’re actually spending, “Americans are saying it will take them about 2½ months to pay off those balances,” said Palmer. “That means they’ll still be paying off their [charges] into 2020.”
Or longer. Palmer cautioned that, for some, the 2½-month timeframe might be wishful thinking. “Some people underestimate because they don’t realize the expenses coming up,” she said. “We asked about last year’s holiday travel expenses, and 1 in 12 said they’re still in debt” from those expenditures.
It’s never a good idea to charge any expense you can’t pay off as soon as your bill comes due, yet many travelers do have their reasons for using credit cards. First, many who can pay in cash up front are being strategic by using cards, racking up loyalty points and miles for travel expenses they have to make anyway. “We found about one-third of consumers are also leveraging points and miles they earn to cover travel expenses, too,” said Palmer.
Second, those travelers don’t have enough saved up to pay in cash or pay off credit bills in one month have likely decided holiday travel is important enough to them that they’ll absorb the extra costs associated with carrying a balance. That could be because holiday travel often means family travel: trips to see far-off relatives, often with kids in tow, or a long-promised family vacation………..Read more>>