School’s Out: Consumers Will Use Their Credit Cards to Pay for Summer Travel

Summer is just around the corner — and consumers are getting ready to spend big on travel. Roughly half of United States consumers had made travel plans by early April, when PYMNTS Intelligence conducted its latest survey. Generation Z consumers are particularly keen on summer trips, with 58% indicating they will travel. Moreover, many summer travelers say they will spend nearly $200 more on average than last year.

When it comes to paying for summer excursions, consumers widely prefer to use credit cards. More than one-third of those paying for at least part of their summer travel by credit card cite rewards and cash-back programs as the primary reason. Although consumers who pay by credit card generally prefer to pay with a single charge, many plan to use pay later plans, particularly Gen Z and those in lower income brackets.

Here Comes Summer Travel

Consumers are enthusiastic about summer travel, and many plan to increase their travel compared to last year.

As warmer weather arrives and school break nears, 48% of consumers have already made travel plans for the summer. Another 18% remain undecided about traveling, while 34% do not currently plan to do so. Notably, Generation X and younger age groups are more likely to say they will travel. For example, 58% of Gen Z plans to travel, compared to 39% of baby boomers and seniors.

Income plays an even larger role in whether consumers have travel plans. Two-thirds of respondents annually earning more than $100,000 say they will travel this summer. Forty-eight percent of those in the middle bracket and 27% of their peers earning less than $50,000 say the same.

The data also shows that consumers’ credit scores are a strong indicator of their intent to travel. Fifty-seven percent of those with high scores (more than 720) have summer travel plans. Fifty-one percent of those with mid-level scores (between 620 and 720) and 32% of those with low scores (less than 620) say the same. Interestingly, respondents who said they do not know their credit score are even less likely to have travel plans, at 28%. This suggests that consumers who pay little attention to credit scores may have less ability to pay for travel.

These are just some of the findings detailed in “Consumer Credit Economy Monitor: Summer Travel 2024,” a PYMNTS Intelligence and i2c collaboration. This edition examines consumers’ plans for summer travel and their related payment preferences. It draws on insights from a survey of 2,127 U.S. consumers held from March 29 to April 4.

Key Findings

More than one-third of consumers planning summer travel say they will travel more than last year.

Many consumers will travel more heavily this summer than last, reflecting a strong willingness to spend on trips despite persistent elevated inflation and higher prices. Across the sample, 37% of respondents with summer travel plans say they will travel more than they did last year. Fifteen percent say they will travel less. That said, 48% expect to travel about the same. This general trend varies relatively little across demographic groups, though Gen Z is an exception. Half of Gen Z travelers plan to travel more heavily this year than last, compared to 31% to 38% for the other generations.

PYMNTS Intelligence found several key factors driving consumers to travel more this year. Forty-one percent of consumers planning to travel more cite greater interest as an important reason. Twenty-one percent name this as their top motivation. This likely reflects demand normalization as the pandemic and related disruptions move further into the rearview mirror. Having more time for travel is the second-most cited reason, cited by 36% of those planning to travel more. Eighteen percent indicate this as the top reason for ramping up their travel. Improved personal finances follow, at 29%.

Most consumers traveling this summer plan to spend more than they did last year and prefer to use credit cards.

The average consumer who plans to travel this summer will be reaching deeper into their pocket. Across the sample, those with travel plans expect to spend roughly $2,400 on summer trips. This amount is $175 more on average than they spent last year, representing an 8% increase. The most notable shift occurs among middle-income travelers, who plan to spend roughly $500 more this year. This 30% jump contrasts sharply with flat spending for higher-income consumers and a 10% drop for the low-income bracket.

Gen X and baby boomers and seniors drive this higher spending. Baby boomers and seniors will spend an additional $300, and Gen X will spend nearly $400 more. At the same time, younger consumers are budgeting slightly less than last year.

Consumers clearly prefer credit cards when paying for travel expenses. Sixty-nine percent of those planning to travel this summer say they will pay for at least part of it by credit card. This share is substantially higher than those who expect to reach for debit cards or cash, at 59% and 57%, respectively. Notably, reward points — which typically come from using credit cards — rank fourth.

The data reveals some notable variations across certain demographics. For example, older consumers and those with higher credit scores tend to favor paying with credit products. This likely reflects these cohorts’ access to quality credit products with higher credit limits. Conversely, Gen Z consumers and those with low credit scores — groups struggling to access credit — both favor debit over credit.

Most consumers prefer to pay for their travel expenses with a single charge.

Credit cards are the go-to way to pay for summer travel. More than 4 in 10 consumers who plan to travel this summer expect to pay primarily with a credit card, with 33% saying they expect to pay for the expenses in a single charge and 11% expecting to use credit card installments. Debit cards come in second, at 32%, with cash far behind, at 9.6%, and substantially lower shares for digital wallet, bank transfer and buy now, pay later (BNPL).

While most travelers prefer paying by credit card with a single charge, a significant portion plan to use pay later plans to pay for at least some of their summer travel. Roughly 34% of consumers plan to use one of these plans, such as credit card installments or BNPL, to pay for at least some of their travel. Younger consumers are the most enthusiastic about using pay later plans for their travel purchases. Among Gen Z travelers, 53% indicate they will use one. On the other hand, just 20% of baby boomers and seniors plan to pay for travel using pay later options.

Looking more closely at the average planned spending reveals that pay later plans are important for lower-income consumers. Overall, respondents who plan to use a pay later plan for some of their summer travel expect to spend less than those who do not. However, the opposite is true for consumers earning less than $50,000. They expect to spend 13% more on average if they use a pay later plan. This indicates that pay later plans help consumers with limited income access travel that otherwise might be out of reach.

Rewards and cash-back programs drive the use of credit cards for travel expenses.

Consumers turn to credit cards for a variety of reasons. When it comes to travel, rewards programs dominate. Thirty-four percent of consumers who plan to use credit cards to pay for travel name rewards or cash-back programs as their primary reason, more than three times as many that name other benefits such as cash flow management and accessibility. These findings confirm that credit card providers should focus on rewards programs to maximize their appeal for travel spending.

Rewards and cash-back programs appeal to older consumers in particular. Among consumers who plan to pay for summer travel expenses by credit card, half of baby boomers and seniors name rewards or cash back as their top reason, and 43% of Gen X say the same. This share drops to 25% for millennials and 8.4% for Gen Z. In fact, cash flow management and quicker access to money rank as more important for Gen Z — an important takeaway for providers targeting younger consumers.

When considering consumer income, rewards and cash back top the list across the board. However, those with high and middle incomes are much more likely to name rewards and cash back as their most important reason, at 38% and 33%, respectively. For consumers in the lowest income bracket, rewards and cash back still lead at 18%, but cash flow management ranks close behind, at 17%, followed by quicker access to money, at 15%.

Conclusion

Consumers are gearing up for a busy summer travel season. They are ready to travel more and spend more on average than last year. Travelers point to credit cards as their favorite way to pay for their travel, with rewards and cash-back programs as the most important reason. Although most consumers who prefer to pay by credit card like to pay with a single charge, the study finds that pay later plans also have substantial appeal. Younger consumers, particularly Gen Z, show especially strong interest in pay later options, as do consumers with lower incomes. Providers should consider these differences as they tailor their offerings to different market segments.

Methodology

“Consumer Credit Economy Monitor: Summer Travel 2024,” a PYMNTS Intelligence and i2c collaboration, is based on a survey of 2,117 U.S. consumers conducted from March 29 to April 4. This report examines consumers’ plans for travel and travel-related spending, focusing on the trips individuals plan to take outside of their area of residence. Our sample was census-balanced to match the U.S. population, with 51% of respondents identifying as female and 38% annually earning more than $100,000. The average respondent’s age was 48.