Winter 2025 travel plans may hurt your wallet

While the weather may not be as pleasant during winter months, many people still prioritize traveling from December to March. The American Automobile Association (AAA) estimates that 115 Americans took local trips of 50 miles or more, and over 7.5 million traveled on an airplane during the ten days between December 23rd and January 1st last year.

Though travel prices continue to rise, many are unwilling to compromise on travel, a trend that continues into the colder months. Gen Z and Millennials prefer spending on travel and experiences over material items despite having lower disposable income.

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Wallet Hub recently released its Winter Travel Survey, finding that Americans prioritize travel, but it’s hurting their wallet.

Almost 75% of Americans anticipate inflation impacting their upcoming winter travel plans, and 52% even believe winter travel is worth going into debt for.

Americans are traveling more, despite financial concerns

Despite many Americans battling inflation and credit card debt, almost half of consumers expect to spend more on travel this winter than they did last year. Many are even willing to take on debt to pay for a trip, even though 49% of Americans are still carrying debt from last year’s travel.

This trend may be attributed to a post-COVID cultural shift where frequent travel has become commonplace, but present bias may also play a role. Younger consumers are more likely to prioritize leisure in the present moment, but this could create detrimental impacts on their retirement planning down the road.

More on travel:

If younger generations take on travel debt at an early age, it will be far more difficult to contribute to 401(k)s and IRAs and accrue long-term compounded interest. Temporarily pausing retirement contributions, even briefly, could impact your retirement cash reserve.

Experts recommend starting a travel savings fund to pay for trips instead of taking on debt or reducing retirement allocations.

A traveler wanders through an airport with a suitcase in tow.
TheStreet

Tips for cost-effective travel this holiday season

Although vacations can be pricey, there are ways to travel within your budget. Winter travel is a great time to book a trip, as it is typically off-season and, therefore, cheaper than summer rates.

Here’s how you can travel cost-effectively this holiday season:

Shop online deals, especially Travel Tuesday. Travel Tuesday—the travel equivalent to Black Friday—takes place the Tuesday after Thanksgiving, which is December 3rd this year. You can find great deals on flights, hotels, and car rentals to lessen the impact on your wallet.
Book shorter, local trips. Domestic travel is typically cheaper and allows you to spend less time getting to the destination, allowing for less expensive weekend trips. It’s an efficient use of your money and time off of work.
Find the travel rewards credit card that works for you. 54% of people plan to apply for a new travel-rewards credit card this winter, likely to accrue points and redeem rewards ahead of travel plans. As long as you can pay off your balances relatively quickly, using rewards points is a great way to save money on travel.

John Kiernan, Managing Editor at WalletHub, highlights the benefits of travel credit cards for frequent travelers.

“Americans are cash strapped and debt laden, yet many of us are going to travel this winter,” he said. “That’s inevitable, but borrowing to do it shouldn’t be a foregone conclusion.”

“Applying for the right card now and using it to book your trip and pay for everyday expenses can get you $750+ in bonus rewards, which you can put toward covering the cost of your travels," he added. "Some cards have perks like airport lounge access and trip cancellation insurance, which can come in handy during the holidays.”

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