Saturday, October 8, 2022

Money Matters: Rate Hikes and Travel Plans

 


With some of the year’s busiest travel dates fast approaching, the personal-finance website WalletHub today announced the results of its 2022 Winter Travel Survey, along with its updated list of the Best Credit Cards for Winter Travel and key money-saving tips for domestic and international travelers. Applying for the right card now will give people enough time to earn up to $750 in free travel.

Please find key takeaways below, followed by commentary from WalletHub experts (audio and video files included).
  • Rate Hikes Deflating Travel Plans: 40% of people say the Federal Reserve’s rate hikes will affect their travel plans this winter.
     
  • Inflation Spooking Travelers: 69% of people are worried about inflation when it comes to travel.
     
  • Credit-Fueled Travel is Common: More than 1 in 4 people plan to apply for a new credit card to save on winter travel.
     
  • Travelers Paying with Points, Miles & Cash Back: 55% of people plan to redeem rewards to help with winter holiday expenses.
     
  • Gas Prices Put the Brakes on Road Trips: Nearly 60% of people say gas is too expensive for a road trip this winter.
     
  • 2022’s Best Travel Credit Card: Capital One Venture Rewards Credit Card is the best credit card for winter travel because it offers an initial bonus worth $750 in travel, along with double miles on all purchases and a reasonable annual fee.


Q&A with WalletHub

Are the Federal Reserve’s rate hikes impacting travel plans this winter?

“Forty percent of people say the Federal Reserve’s rate hikes will affect their travel plans this winter, according to WalletHub’s 2022 Winter Travel Survey,” said Jill Gonzalez, WalletHub analyst. “The average household has around $8,558 in credit card debt, and people’s balances are getting more and more expensive thanks to recent Fed rate hikes, leaving travel budgets bare. People with credit card debt are expected to pay $20.9 billion more than they would have absent any Fed hikes.” 
 
Is inflation affecting people’s travel plans?
 
“WalletHub’s 2022 Winter Travel Survey found that 69% of people are worried about inflation when it comes to travel. People simply have less money left to spare for luxuries like travel when the prices of everyday items are inflated,” said Jill Gonzalez, WalletHub analyst. “Even trying to economize by taking a road trip rather than flying is unlikely to provide much relief. Nearly 60% of people say that gas is too expensive for a road trip this winter.”
 
Are people planning to use credit card rewards to pay for winter travel?
 
“A new WalletHub survey found that 55% of people are planning to use credit card rewards to help pay for a trip this winter. Using rewards you have saved up is a great way to keep your new expenses to a minimum, but it’s important to make sure you’re not sacrificing value by redeeming for travel,” said Jill Gonzalez, WalletHub analyst. “You should be able to easily determine the value of your rewards with each redemption method available to you via your online account.”
 
Is it common for people to apply for new credit cards just to save on one trip?

“More than 1 in 4 people plan to apply for a new credit card to save on travel this winter, according to WalletHub’s 2022 Winter Travel Survey. The best travel credit cards can save winter travelers $750+, so taking advantage of the latest deals can be a very effective strategy,” said Jill Gonzalez, WalletHub analyst.
 
What tips do you have for people trying to take advantage of credit cards this winter?

“People looking to take advantage of credit card perks this winter should definitely consider applying for a new card,” said Jill Gonzalez, WalletHub analyst. "There are a few different reasons why getting a new credit card is a money-saving move:
  • Credit cards are currently offering very attractive initial rewards bonuses, which could subsidize or completely pay for winter travel and other seasonal expenses.
  • If you anticipate having trouble paying off holiday expenses in a single billing period, taking advantage of 0% introductory APR credit card offers while they last could save you a bundle on interest.
  • If you’re headed abroad for the holidays, bringing a credit card with no foreign transaction fees is a must. It could save you up to 9% compared to exchanging hard currency.  
  • If the economy takes a turn for the worse, credit card offers are likely to get much less attractive.”

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