Whether you’re trekking the Alps, sunning yourself silly in Dubai or cruising across America, your credit card could be the most important thing you can pack for your holiday this year, if used correctly.
Thanks to a combination of factors – from the Consumer Credit Act, which can protect your transactions, to rewards and incentives from providers vying for your trade - credit cards can be an invaluable tool for every stage of your holiday.
This doesn’t mean going hell-for-leather and accumulating debt which you can’t afford to repay. Using your card within your means and spending only what you are confident – really confident - you can easily pay back is the key to getting the most out of it in the long run.
Making an informed choice on the card you choose can really help your holiday, too. Thankfully, Gocompare.com offers a quick and easy way to compare travel-focused credit cards to scour the market for a great deal.
Read on for a few reasons why your credit card should be the first thing you pack – even before your suncream or swimwear…
Holidays generally require a fair bit of money upfront - especially if you’re making a booking for a large party of people.
This is where 0% credit cards can come into their own. They allow you to spread the cost of your holiday without having to pay any interest for a certain amount of time – anything from nine to 20 months.
If you’re the responsible one who’s making a group booking, make sure that you get the rest of the party to pay what they owe you as soon as they can. Thanks to online bank transfers, there’s no excuse for dawdling any more.
Flights and accommodation
Fate has conspired to disrupt the travel plans of thousands of holidaymakers over the past few years – whether it’s a volcanic eruptions, political turmoil or airlines going bust, flight-related chaos has never been too far away.
Booking your holiday with your credit card can help in situations like this - particularly if you're doing a 'DIY' holiday and not booking with an ATOL-registered travel agent - as your credit card company is obligated to help you get home or get accommodation for a cancelled flight under the Consumer Credit Act.
If you’ve spotted something you like for yourself or the folks back home - like this fetching sombrero as sported by the gentleman above - then buying it with your credit card may make sense. If you get back home and find that it’s faulty, then it will be covered under the Consumer Credit Act – that is, if the value was between £100 and £30,000.
Just remember that using your card abroad may involve paying a fee on transactions, so check what they are before you go. Or, better still, consider a credit card which doesn’t have any fees for transactions abroad – at time of going to press, Post Office, M&S and Saga all offer cards with these sorts of terms.
Credit cards at the premium end of the market often throw in a raft of bonuses – like annual travel insurance, for instance– to card users who have to pay an annual fee to use them.
However, this doesn’t mean that you should avoid buying separate travel insurance altogether – it’s worth checking the terms and conditions of your credit card’s travel insurance to see whether you enjoy a level of cover comparable to a standalone policy.
Then there's always cashback, rewards and air miles cards. It's really imperative that you stay regular with your payments for these to work - otherwise you may not be eligible for rewards and end up paying for more than you anticipated for what you've bought.
After your holiday
Credit cards can even help alleviate a post-holiday financial hangover.
If you’ve racked up more debt than you anticipate, then a 0% balance transfer card can help you dramatically reduce what you’ll pay in interest – for as long as the 0% terms last, that is.
It’s easy to switch your balance – but there’s usually a fee involved – usually around 2-3% of the debt you’re looking to shift. You’ll need to calculate whether it’s worth your while to shift the balance or pay the interest.