When summer comes, we feel like going on vacation. The sun is shining, the holidays are just around the corner and we’re ready to take a break to recharge our batteries. Unfortunately, the cost of this summer trip is rising fast. According to a recent Bankrate survey, 7 in 10 US adults are changing their summer vacation plans accordingly — traveling less, staying close, and choosing cheaper destinations.
Still, many adults plan to take at least one trip during the summer season, including 75 percent of Gen Z. As Gen Z begins to explore their financial independence, here are a few tips to minimize the cost of your next vacation.
Tip #1: Be open-minded and flexible
You can’t control the economy, especially when it’s drifting in your favor with recent inflation and rising federal interest rates. But you can control how you approach your vacation attitude. Think outside the box. If a beach holiday is too expensive for you, maybe visit a lake this year. If airfares are too high, treat yourself to a road trip. Take a small group of friends to a rental instead of a hotel. There are many ways to vacation and this could be a good time to explore other options.
Best card for flexible tariffs: flat rate cashback
Flat rate cashback cards are great when you want to quickly change your plans. The rewards always arrive, whether you’re catching a flight, going to gas stations, or paying for lodging. You can also use these rewards after the trip to cover some of the expenses on your card, relieving pressure on your balance.
Tip #2: Check out card programs
While people know that credit cards come with travel perks, many are unaware of the variety of travel perks you can get even if you don’t have a premium card. From luggage and car rental insurance to annual free night stays, there’s plenty to look forward to.
Best Card for Travel Plans: Travel Reward Cards
Travel maps will always increase your comfort like home. These cards often have higher award rates for flights, rentals and hotels, as well as other benefits that you can enjoy year after year.
Consider your own travel preferences when choosing a card. If you’re most comfortable driving, look for cards that offer rewards for gas station and grocery store purchases. If you’re in an airport several times a year, a lounge access card can be a good investment.
Tip #3: Plan for new requirements
COVID-19 has changed everything, especially the travel landscape. Depending on where you’re traveling to, there’s a chance you’ll face higher prices, security restrictions, or even mandatory testing before you arrive. Make sure you check your destination’s health guidelines before booking, and double-check before you travel for a refund window to stay prepared.
Best card for new requirements: premium cards
Nobody can prepare for everything. When faced with unexpected expenses, premium cards often have higher spending limits and 0 introductory APR offers that can help keep your debt down. You may also receive benefits such as Global Entry or TSA PreCheck credits, early boarding and travel insurance. With such perks, traveling quickly becomes less stressful and more of an adventure.
Tip #4: Take advantage of a relaxing summer vacation
The best thing about summer is that it includes the low stakes holidays. Although popular, Memorial Day and 4thth July doesn’t have the same urgency as maybe Christmas or Thanksgiving. Therefore, planning trips before or after these days is less of a hassle.
Best card for this: Rotating categories
Frequently changing category cards change throughout the year to 5 percent cashback in select categories that consumers will most likely spend money on during the season. If you’re trying to look ahead, you can review last year’s categories to get an idea of what’s going to be available in the upcoming seasons.
In categories like travel, public transportation, gas stations, restaurants and live entertainment, you’ll see increases in cashback, an easy way to make your next trip worthwhile. Note, however, that you may need to activate the categories every quarter.
- Discover it® Cash Back: 5% Cash Back upon activation for rotating categories each quarter (up to $1,500 on purchases, then 1%), 1% for all other purchases
- Chase Freedom Flex℠: 5% cashback (up to $1,500 on purchases, then 1%) on grocery stores, streaming services, and online purchases with travel insurance benefits
- Citi Custom Cash℠ Card: 5% cashback on purchases in the activated bonus category each quarter (up to $1,500 in purchases, then 1%) and on Chase Ultimate Rewards travel purchases
Knowing when to travel and when to stay home
You may be longing for a change of scenery, but that doesn’t necessarily mean now is the time. When calculating your decision, consider all the pros and cons to make a decision that fits both your budget and personal well-being.
- It is a good opportunity to spend the accumulated points. If you’ve been accumulating rewards points all year and are looking for a way to use them, a vacation is a great option. Not only is this an effective way to cut costs, but it also provides an opportunity to indulge in card perks like hotel or flight upgrades.
- It’s a great way to make money back. Travel categories with credit cards often receive higher rewards, especially if the issuer has its own travel portal such as Chase or Capital One. This is an opportunity to earn a percent or two more cashback while having fun.
- Maybe you need a break. While vacations often seem like a luxury, making time for yourself is a necessity. Burnout doesn’t happen overnight and breaks are important to balance life. Overall, even if it’s a residency, finding time for yourself outside of your normal schedule is beneficial.
Don’t go because…
- It’s still expensive. Sometimes our budgets don’t have room for downtime. It may be better to plan a trip for 6 months or more if your debt is high or you plan to make a big purchase soon. It saves you stress in the long run while giving you something to look forward to.
- It’s easy to overspend. If you tend to spend a lot more on vacation than usual, a vacation could weigh on your budget when you come back. After that, if you have a balance on your card, your card will accrue interest that has recently increased.
The final result
Traveling can be a bit overwhelming these days, but your credit card can be more helpful than you think. When you get a new card, look at the travel perks that will come in handy for you. If you have a card, look for points and cashback opportunities on flights, gas and more.
Either way, there are plenty of ways to explore the world around you, whether local or international. Holidays are meant to be a time to relax, and with a little research, you can have your best time yet. As with anything in the personal finance world, find what makes the most sense for you and go from there.