Taking credit for holidays should be in best interest
BRITONS are still determined to enjoy a foreign break this summer despite the cost-of-living crisis.
Two thirds of us are planning a holiday abroad, new research from AllClear Travel Insurance shows, while travel companies like Tui are reporting bumper sales
Worryingly, one in five plan to pay using their credit card, according to a Go.Compare survey.
Putting a holiday on credit can be dangerous if you cannot afford it any other way but there are good reasons to pay by plastic, said Go.Compare travel insurance expert Ceri McMillan: “It gives you further protection if your travel firm collapses.”
Section 75 of the Consumer Credit Act guarantees you a refund on any purchase costing £100 to £30,000, if something goes wrong and you cannot otherwise get redress. This does not apply to debit or charge cards though. If you pay for your holiday using a rewards credit card then you could receive more benefits, such as Air Miles. McMillan added: “A credit card also allows you to spread the cost of the holiday across more months.”
The downside is that with credit cards charging APRs of 21.7 per cent or more, using one could increase the overall cost of your holiday unless you repay the debt quickly. “Some providers may add fees for using your credit cards or not accept them as a means of payment,” McMillan said.
Foreign exchange rates tend to be good when spending on a credit card abroad, but watch out for overseas transaction charges and fees when withdrawing.
There is still time to take out for a credit card that has no overseas charges, now offered as an option by most banks.