If you’re dreaming of a white, sandy beach and a cocktail in hand, you might be thinking about booking a holiday.
But before you put your deposit down or pay it off in full upfront, make sure you have your credit card at the ready.
Book with your credit card…
If you have a credit card, you’ll find it’s a valuable tool when you’re planning a holiday. One of the main advantages is that when you book, your trip should be covered by Section 75.
This is a law that means that any single purchase worth between £100 and £30,000 you make using your credit card is protected. This means that if you book flights that cost £500, for example, and then the airline goes bust, your credit card provider is responsible for giving you a refund.
One thing to keep in mind is that Section 75 covers you for single purchases made on your credit card. So if you book a holiday that costs £500 in total but each component of it – accommodation, travel, entertainment, etc. – costs less than £100, you won’t be covered for this. The partial exception to this rule is if you have paid for part of a package holiday by putting a deposit down. In this case, if your holiday is cancelled and the travel provider can’t refund you, your credit card provider will be liable, as long as your deposit was over £100.
… and pack your credit card too
Your credit card not only offers you financial protection when you book your holiday, but when you go on holiday too. If you lose your card while you’re away, or it’s stolen, you can contact your credit card provider and cancel it. This gives you the peace of mind that your money is safe in your account.
Another benefit is that if your card is stolen on holiday and the thief attempts to make a purchase with it, you will be able to get a refund on this. It’s reassuring to know that you won’t be left paying a debt someone else created if you’re unlucky enough to have this happen to you!
What to watch out for
There are some things you need to be aware of when using your card abroad. One is that when your lender notices that cash is being splashed in Barcelona or Paris when the card is registered to an address in Southampton, they may mark it as ‘abnormal’ activity. To avoid this happening, it’s worth letting your credit card provider know before you travel.
You should also keep in mind that there may be fees involved in using your card abroad. While it’s normal to face a charge when you use your credit card to withdraw cash, be prepared that this could rise when you’re overseas. You might also be charged for using your card to pay directly, and it’s usually the same case when you use your debit card.
There are cards designed specifically for spending abroad that you could consider if you’re planning your holiday. Pre-paid cards are available for you to load with the currency of your choice, and you can then use them as you would a debit card – and there’s often zero charge when you use it.