Should you pay for your holiday using a credit card?

Taking a break is something we all need to do from time to time, but this can be an expensive business. At this time of year, it may also feel like everyone is jetting off on holiday, making you more likely to start thinking of booking something yourself. If you don’t have the money to lay out for this, then deciding to apply for a credit card with somewhere like SoFi, can help you to cover any costs you may be required to pay when you want to take a holiday. That being said, it’s always worth weighing up the pros and cons before making a decision, so here are the two sides to the argument.

Reasons why a credit card is worth using

Perhaps one of the most obvious reasons people use credit cards is to avoid putting a large dent in their current account balance – something that might make life more difficult in the short term. Paying back the total over the course of a couple of months can make it feel far easier to manage.

Another good reason to book your holiday using plastic is the extra protection it affords on your outlay. Section 75 of the Consumer Credit Act means any purchases made over 100 and up to 30,000 will be covered. So if for any reason the firm you booked your break with goes out of business – as others have in recent years – you won’t lose your cash.

Depending on the type of credit card you use, you could even earn rewards or points depending on your purchases. So spending on a holiday could ultimately provide you with the chance to enjoy some other treats.

Reasons why using a credit card might not be so good

There are relatively few cons to using a credit card in this situation, but the most obvious would be the risk of getting in to debt issues. If you fail to plan a repayment schedule then interest rates can quickly add to the amount you owe, potentially causing a spiral. Always make yourself fully aware of the terms and conditions of your card to avoid being stung.

Those wanting to dodge interest should compare credit cards offering 0 per cent interest for a certain amount of time. These are available from most lenders and can give you the extra breathing space you need to get organised and cover your balance in full before the period ends.

 

About the Author

Leave a Reply

*