Category: Holidays

Holidays

Should a Holiday ever be paid for on a Credit Card?

A holiday can be something that many people really look forward to; a chance to completely get away from all the stresses of home and work and to really enjoy themselves. It can be really healthy to get rid of that stress and also a great way to have lots of time with family and friends. However, they can be very expensive and so it can be difficult for some people to afford them. It can therefore be tempting to borrow money so that you can afford to go and a credit card can be an easy way to do that.

It is wise to consider first, whether it is a good idea to borrow money for a holiday. Although the holiday may be a great opportunity to destress, having those repayments to make and that debt hanging over you, meaning you have to work harder and go without things to pay for it, may reverse the effect of the holiday. Only you will know if you think that it will be worth it, but if you can, think about your previous experiences and consider what might be best.

It can also be good to see whether you can keep your holiday costs down. This means that if you do borrow money you will not have to borrow so much and your repayments as well as borrowing costs will be lower. Compare some different types of holidays and think about what might suit you and the family and whether you can get what you want at a lower price. It can be hard if you have children as term time holidays are cheaper, but the weather is better in the school summer holidays so you may feel that is worth the extra money and other expensive holidays are at times where there are bank holidays where you can have time off work without using up your annual leave, which also has its advantages. There are other ways of reducing costs as well, such as self-catering rather than staying in a hotel, not going abroad, camping or caravanning or just finding the cheapest accommodation in the type that you want.

Once you have decided on the holiday then you will need to pay for it. Usually you have to pay a deposit and then pay the rest before you go. You will therefore have to think about where both of those chunks of money will come from. You may have managed to save up enough money to be able to pay for it without borrowing, but many people will have to borrow. A credit card can therefore be an easy option to choose. Most companies will accept them and if you already have one then it can be really easy to use it. There are good and bad reasons for using a credit card for purchases like this.

Some companies will charge you to use a credit card and so it is important to check this. You may find that you end up paying quite a fee for using it, perhaps a flat charge or a percentage and this will increase the cost of your holiday. However, you do get some protection when using a credit card as if for any reason, you don’t get what you paid for, they may be able to recoup the costs for you. This will depend on the credit card company and so it is best to check their terms before assuming that this will definitely be the case.

The cost of using a credit card can be a lot more than the fee for paying with it though. It all depends on whether you pay it all off at once or only pay back the minimum each month. If you pay off the full balance each month before any interest gets charged then you will just get interest free credit until the bill is paid. However, when you buy something big like a holiday, you may not be able to afford to do this and so choose to pay off less; perhaps even the minimum. If you do this, you will be charged monthly interest and this will happen every month until you are able to pay off all of the money that is owed. It is possible for a debt like this to take a very long time to be paid off. It could stretch across a lot of years and if you keep spending on the card it could just seem to be endless.