SAN FRANCISCO – A study from Visa USA indicates that Americans are packing their bags and preparing to vacation in record numbers this year. From Jan. 1 through mid-May, car rental spending volume on Visa-branded cards was up 9% compared to last year.

Overall travel and entertainment spending volume on Visa cards grew 15% over the same period in 2004. Visa said it expects the growth trend to continue through the 2005 summer travel season.

"Lower airline and car rental prices are spurring many Americans to take vacations despite increases in interest rates and higher energy prices," said Wayne Best, senior vice president of business and economic analysis for Visa USA. "Consumers are benefiting from the competition taking place within the airline and car rental industries, allowing them to travel more frequently or take extended vacations with the extra savings."

Intense competition has caused the average individual transaction for both airline tickets and car rentals to decline approximately 3 to 7% across the board, Visa said.

Also, the U.S. is seen as a more desirable destination for international travelers. "Travel from overseas to the United States will continue to improve as the dollar softens to the euro and yen," Best said. "This is great news for American businesses and cities that rely on tourism."

Energy prices are expected to decline after the peak summer driving season, giving consumers more room in their budgets for spending on discretionary items, including travel and entertainment. Travel and entertainment spending represents approximately 17% of Visa's overall volume, Visa said. The increase in spending on Visa credit, debit and prepaid cards indicates that consumers are migrating in large numbers from paper forms of payment -- such as cash and checks -– to electronic payments.