Paying for your holiday
Holidays, while relaxing, can be expensive. From flights to hotels to insurance, you’re likely to rack up a pretty large bill of expenses before you’ve even taken off.
Tactically using your credit card for certain purchases and making sure you take advantage of the best exchange rates available you can cut down on the costs of your travelling.
In This Guide:
Paying for your flights
Flights can be one of the biggest expenses of all when you go on holiday and so it’s important that you work out whether you’d be better off by using a credit card or by using cash or a debit card to purchase them.
Many airlines will add on a surcharge when you purchase flights with a credit card. This can be small or large depending on the airline but you should be aware of the benefits that you can enjoy when you use your card before you decide not to do so purely because of the added surcharge.
Section 75 of the Consumer Credit Act of 1974 offers you protection in the form of entitlement to a refund if anything goes awry on any purchases worth £100-£30,000 made on a credit card.
Section 75 applies when the retailer refuses to offer a refund themselves. So say you book a flight and then the airline in question goes bust, your credit card issuer should provide you with your money back.
As well as the protection you get after you’ve purchased your flights, you could get a lot of the money off in the first place by using a specialised reward based credit card that earns you points redeemable on international flights.
These cards will earn you points like Avios (previously Airmiles) or Virgin Flying Club Miles, for every pound you spend on them. When you have enough points you can cash them in for airline tickets,
When you do so, the points will only count towards the airline’s fees; you’ll still have to pay any taxes charged by the destination country.
You can also use these points to upgrade your existing flight tickets and sometimes to purchase hotel rooms in your destination country.
Paying for accommodation
As with airlines, hotels will often add a surcharge to any bookings made with a credit card but, again, Section 75 protection can often make this surcharge worth it, depending on how large it is.
Bear in mind though that if you’re renting a private room in a house rather than in a hotel, payment protection can be a bit tricky given the difficulty in working out exactly who is responsible for the money in question.
Spending money abroad
Exchange your pounds into foreign currency can require some work if you’re set on getting the best exchange rates possible.
You might be tempted to visit high street bureaux de changes, but be careful when you do as you’re likely not to get the best rates available, and you’re also likely to be stung by relatively high commission charges if you’re not careful.
Often you can find great exchange rates online. If you do choose to purchase your foreign currency on the internet, you should be sure to do so a little while before you actually go away as it will take at least a few days for the cash to be sent to you.
One of the best ways to exchange your currency is to do so on the fly by taking out a specialised card that offers you a 0% charge on foreign transactions.
You can use these cards to spend money abroad, usually at a decent exchange rate, without paying the typical 2-3% fee that would be charged if you used a conventional credit card.
Often, the best way to spend money abroad is simply to use cash. While almost all establishments nowadays will accept credit cards, some don’t and for those, and things like taxis, cash is invaluable.
When you do withdraw cash abroad, it’s important that you use your debit card rather than your credit card as using the latter will result in very high charges.
One great option when you’re going away is to use a pre-paid cash card that you can load with a foreign currency, or with sterling that with be converted at competitive rates when you withdraw.
Compare cards to use abroad
Whether you’re after a card that rewards you with points redeemable on flights or one with 0% interest on foreign transactions, head over to our credit card comparison page to see what’s on offer.