Rising inflation rates have forced travellers to stick to budgets while planning road trips. (iStock)
Summer travel is booming along with the weather, but consumers are cutting back on spending: About 71% of consumers believe inflation is affecting their road trip plans. According to a survey by Experian.
The majority of survey respondents planned to spend an average of $1,000 on travel this summer, with road trippers planning to spend the most on gas and lodging.
Car insurance costs are also affecting travelers: Three in four people who responded to Experian’s survey are worried that their premiums will go up in the next year. This fear of higher premiums has led one-third of respondents to shop around for car insurance.
States with higher insurance rates have the highest percentage of drivers looking to switch: About 14% of drivers looking to switch live in Texas, and 11% live in Florida.
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Many consumers plan to use credit cards to pay for travel this summer.
Most travelers won’t be paying for their trips this summer with cash, with credit cards being the most preferred payment method. According to a PYMNTS survey:.
About 69% of people planning to travel will use a credit card for at least a portion of their lodging expenses. Rewards and cash back programs offered through credit cards are the most common reason consumers choose credit cards over other payment methods. The other two main reasons travelers choose credit cards are cash flow control and ease of access.
The majority of travelers choose to pay for their trips with a credit card, while 59% use a debit card and 57% opt for cash.
PYMNT’s data also highlights travelers’ financial circumstances: the higher the credit score, the more motivated they are to travel: About 57% of borrowers with high credit scores are planning a summer trip, slightly more than the 51% of borrowers with medium or low credit scores.
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Credit card usage is on the rise as inflation continues
Younger generations are more willing to travel and spend more on live events
While travelers of all generations are looking to save more on their travel plans this summer, millennials and Gen Z are more willing to spend money on live events, with Gen Z especially willing to spend money on concerts, sporting events, and other live events. AAA and Bread Financial Reporting Discovered.
About 65% of Gen Z and 58% of Millennials have traveled or plan to travel for in-person entertainment at least 50 miles away from home in the next 12 months, indicating a willingness to spend extra on travel, while only 43% of Gen Xers and 27% of Baby Boomers are willing to do the same.
Many Gen Zers are even willing to travel more than 1,500 miles to attend these events: In the survey, twice as many Gen Zers said they would be willing to travel that far compared to just 9% of Baby Boomers.
“Younger generations are leading the way when it comes to changing consumer spending habits when it comes to live event travel,” explained Paula Twidale, senior vice president at AAA Travel. “Gen Z and millennial travelers are taking travel to the next level by traveling farther and spending more than other generations for live events. They don’t want to miss out, so they’ll do anything to see their favorite artists, sports teams, and other live events in person,” Twidale said.
Younger generations are more willing to spend money not just on the trip, but on the tickets themselves. Nearly two in five Gen Z and millennial travelers paid anywhere from $500 to more than $5,000 for tickets alone. Dipping into savings is no problem for this generation, especially when it comes to live events. Some may even consider starting a side hustle to help pay for concerts and shows they’re interested in.
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