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Credit card debt at record levels ahead of holidays
Ted Rossman, Senior Industry Analyst at Bankrate, joins LiveNOW's Carel Lajara to discuss how consumers can manage credit card debt ahead of the holiday season.
LOS ANGELES - As the holiday season approaches, inflation continues to impact American wallets — and for many, that means rethinking travel plans. A recent Bankrate survey shows that 83% of holiday travelers are finding ways to cut costs, whether by driving instead of flying, choosing less expensive accommodations, or opting for shorter trips.
Despite economic challenges, people are still eager to celebrate with loved ones. However, the financial strain of recent years has made budget-friendly travel options a priority.
How inflation is reshaping holiday travel in 2024
According to Bankrate’s survey, nearly half (47%) of those planning to travel during Thanksgiving or the December holidays are making changes to their itineraries. Inflation has hit Americans hard in recent years, and while prices are stabilizing, many are still grappling with higher costs for daily essentials. Bankrate Senior Credit Card Analyst Ted Rossman noted, "Prices are still rising, they’re just rising more slowly."
The survey highlights that holiday travelers are getting creative with their plans:
- 32% are cutting down on travel days.
- 30% are picking cheaper destinations or accommodations.
- 28% are driving instead of flying.
Fewer flights and hotel stays for holiday travelers
With high airfare and accommodation costs, fewer Americans are planning to fly this holiday season. Only 8% of respondents plan to fly for Thanksgiving, and 14% intend to take to the skies for the December holidays.
On average, travelers expect to pay around $925 for Thanksgiving flights, while December flights could set them back $1,165. Additionally, more than 1 in 4 travelers (29%) expect to take on debt to fund their holiday plans, either through credit card balances or buy now, pay later services.
Inflation affects travelers across income brackets
Interestingly, households earning less than $100,000 annually are the most likely to alter their travel plans due to inflation, with 86% reporting changes. But even wealthier households aren’t immune — 77% of those earning over $100,000 are also adjusting their holiday travel to accommodate higher costs.
Millennials appear to be the most affected generation, with 86% planning to make changes. Baby boomers, by contrast, are less likely to modify their plans, with 72% saying they will stick to their original travel plans.
How to save on your holiday travel
Despite these challenges, travelers are determined to enjoy the season. Many are using rewards points or loyalty programs to offset costs, while others are opting for less traditional travel schedules to save money. Rossman explained that while travel isn’t off the table, it’s being approached with more strategic planning.
Wherever your plans take you this holiday season, making smart financial decisions and embracing flexibility can help you make the most of your travel without breaking the bank.
The Source:
Information for this article was sourced from a Bankrate survey conducted in September 2024, with data representing a broad cross-section of U.S. adults. Additional commentary was provided by Ted Rossman, Bankrate’s Senior Credit Card Analyst.