With the holiday season coming up, millions of people in the UK will be turning to the internet to book their yearly fix of sun, sea and sand. With the falling pound hiking up the cost of family holidays by several hundreds of pounds putting together your own DIY break is one way to save money.
Whilst booking low cost flights and separately booked hotels online can cut the cost of a holiday many travel experts warn that doing this does not give the consumer the same protection as the traditional holiday package deals that are covered by ATOL (Air Travel Organisers Licensing).
Using your credit card is a way of protecting yourself. The use of your credit card makes the credit card company jointly liable for any breeches of contract or misrepresentations by the travel firm. Your credit card could also protect you if the company you booked your holiday through suddenly goes bust. As long as the sum of the holiday was more than one hundred pounds but less than twenty-five thousand pounds your card could cover you.
Introductory purchase offers on credit cards are also a good way to pay for a holiday if money is tight ahead of pay day. If you use the card during the financial buffer zone it could give you a cost free way to pay for a holiday, however you must pay the debt off within the fixed time period in order to avoid the interest.
Another way to save some money whilst paying for your holiday is to use a cash back credit card. This type of card is supposed to pay you back a percentage of your purchases every time you use the card. On average you can earn around 1% back on your spending however there are some cards that may offer you about 5% but that offer of 5%, is usually only an introductory offer. However there are other cards that let you collect points which can be redeemed for rewards such as flights and holidays.
Whilst credit cards can turn out to be a holidaymaker’s best friend when it comes to booking a holiday, you do need to watch out for the charges which can be a sting in overseas spending. As using travellers cheques is becoming rather old fashioned, more people are resorting to using their credit or debit card when they go abroad, but what many people forget that there are additional charges for using their cards in a foreign country.
Taking the wrong debit and on your holiday can leave you around £100 in fees out of pocket. It is estimated that banks make around £500million in extra charges from the £20 billion customers spend when using cards abroad. Cardholders are typically charged a foreign loading fee of 2.75% plus a cash withdrawal fee of between 2.5-3%. Banks such Abbey, Nationwide and the Post Office are the exceptions, as they have no foreign loading fees on credit card transactions abroad, although they do charge for cash withdrawals.
Withdrawing cash on any credit card should always be a last resort. As many banks will charge a 2.75% fee or a minimum charge for withdrawing money out of a cash machine on your debit and credit card, while there other banks who charge their customers a fee regardless of the size of the withdrawal made.
It’s not just cash machines that hit holidaymaker's wallets. Some banks have started charging a fee when a credit card is used at a retailer's till, as always when using your card always make sure you are aware of how much it will cost you to use.
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