Holidaymakers could save £millions with the right credit card

15 July 2008 / by Daniela Gieseler
Nearly 20million Brits will go on self-planned holidays this summer spending £6.2billion on flights and £1.9billion on accommodation, figures from comparison website uSwitch revealed.

However, they should make sure they are adequately protected in case their bookings are cancelled or their holiday provider goes bust because in contrast to package holidays they don't benefit from ATOL (Air Travel Organisers' Licensing) Protection.

With many holiday companies having a hard time due to the credit crunch, protection should be on top of every holidaymaker's priority list. If a company goes bankrupt, they will then get a full refund of the money paid.

The research shows that the number of travellers protected by ATOL has shrunk from 98 per cent in 1998 to 61 per cent this year as more and more Brits have taken advantage of cheap flight and hotel deals offered via the internet and put together a self-planned holiday.

When booking a 'DIY holiday' consumers should make sure they use their credit card, in order not to be left out of pocket, uSwitch says. In contrast to credit cards, debit cards do not offer section 75 cover which protects purchases between £100 and £30,000 made in the UK or abroad.

In addition, credit cards could save holidaymakers up to £859million in interest if they use zero per cent best buy credit cards with reward points to pay for their holiday.

Some cards offer zero per cent on purchases for up to six months, and others such as the American Express Blue Sky credit card or airline cards offer great rewards for every pound their owners spend on them.

Those planning to use their debit or credit cards abroad should ensure they know what charges to expect from their bank or credit card provider in order to avoid nasty surprises on their return.

Some providers charge up to £1.50 for every single purchase made on the card, or cardholders might incur fees of 2.5 per cent or a minimum charge on cash withdrawals. The Nationwide debit card is a good option for those who want to use their cards abroad as no fees on either cash withdrawals or purchases are changed.

Simeon Linstead, Personal Finance at comments: "Choosing the wrong credit card to pay for a holiday could be a costly mistake. It is possible for people to reduce the amount they will pay in fees, or avoid paying them altogether, if they take a little time to research the credit card market before going away and make sure that they are packing the right plastic."

"As a nation, we now prefer to pay with our plastic rather than use cash," Mr Linstead continued. "However, at the very least consumers should make sure that they are fully aware of the additional charges involved when they use their card overseas. The holiday blues could kick in very quickly when unwelcome fees appear on their next statement."

© Fair Investment Company Ltd