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Is it worth paying for a holiday on a credit card?


suitcases piled on top of eachother

At a glance

  • In some circumstances using your credit card to pay for a holiday may mean that you are protected if your travel firm collapses and takes your money with it.
  • 0% cards are a great way to spread the large cost of a holiday – Just make sure you repay it all within the 0% interest period.
  • Get a little of that money back if you have a cashback deal with your credit card.

Booking a holiday using a credit card

There's nothing better than the prospect of jetting off on a much-needed holiday.

Even though many wait for last-minute deals, families with children who are tied to specific holiday dates might prefer to book as far in advance as possible to ensure they get the holiday they've been dreaming of.

Booking a holiday can be an exciting time, but no matter when you choose to take the plunge, it's important not to overlook how you'll pay for it.

Paying with a credit card?

Most purchases made on a credit card benefit from enhanced purchase protection under the terms of the Consumer Credit Act. 

If the travel provider goes bust and you haven't got travel insurance, you can still claim all of your money back from your credit card provider, even if you only paid for the deposit by card and the rest of the balance in cash. This applies where the cost of the holiday you are buying is more than £100 but less than £30,000.

[Note: if you purchase your holiday via a travel agent, you may only get this level of protection if you buy their full suite of travel arrangements, such as a package holiday. If you just buy an airline ticket, for example, credit card protection may not apply, as the agent is only the supplier of the ticket and not of the flight itself.]

There are further benefits, too, particularly if your card offers a generous cashback or reward scheme.

Credit card charges

Credit card surcharges were banned from January 2018, so tour operators are no longer allowed to charge these.

Need to borrow?

Borrowing money to go on holiday is not the ideal solution. However, for many people, spreading the cost of a holiday on a 0% credit card is the only way they can afford a family getaway. If this sounds like you, make sure that you use a credit card offering a long introductory 0% interest period for purchases.

Be sure to set yourself a repayment plan. It's important that you pay off your holiday before the end of the 0% interest period, and preferably before you need to book next year's holiday, otherwise you risk a growing debt that will only become harder to manage. A few credit cards will let you set up a direct debit for a fixed percentage, and many will allow a standing order for a set amount.

Clearing your balance by making these automated payments will go some way to helping you achieve the discipline needed to repay your holiday debt.

Start saving for next year!

The earlier you start saving, the easier things will be when it comes to booking and paying for your holiday.

The first thing to do is to open a new savings account. When comparing savings accounts, remember that you will probably need access to your cash at least twice, first to pay the deposit when you book your holiday, and again to pay the balance (generally around 12 weeks before you're due to depart). An account that allows you to make regular deposits is also a good idea, thereby allowing you to make small regular payments each time you get paid, as opposed to one lump sum. This also means that you're able to build up your holiday fund over the year.

A regular savings account could be a great way to kick-start the savings habit and ensure you squirrel away a bit each month, or if you're planning for a big trip abroad, then a short-term fixed-rate bond may be a good idea.

Bonds that run for six months to a few years offer good returns, with a number allowing early access to funds. It is always worth checking your chosen account's terms and conditions, however, as penalties will often apply for withdrawing funds within the term of the deal.

Moneyfacts tip

Moneyfacts tip Image of Mike Brown

Saving in small weekly or monthly instalments is essentially what you are doing when you make repayments on your credit card, so why not get ahead of the game and open a savings account now? 

Pros and Cons of booking your holiday with a credit card

  • If something goes horribly wrong the cost of your purchases is often covered under your card’s enhanced purchase protection.
  • If you have a cashback or similar reward credit card then you could reap some extra benefits for the cost of your holiday.
  • Spreading the cost of your holiday can be interest free if you pay off the whole amount before the end of any 0% interest period.
  • If you can’t pay off the whole amount before the end of your card’s 0% interest grace period, the total you repay will be a lot more.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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I accept. Read our Cookie Policy will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be ScamSmart. will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be ScamSmart.