Using Credit Cards For Holidays

Yes, you read that right! Though many financial experts usually suggest that you limit the use of your credit cards, there are still some advantages to using your credit card on your holiday. With the summer holidays fast approaching, I am sure that many of you have plans to take a break from the mundane activities that you engage in all year round. However, with the economic crisis hovering above everyone's heads, there are more to consider when it comes to planning your holidays.

For one, statistics show that more and more people are breaking away from the custom of patronising travel agencies and their packages. Instead, they are coming up with their own holiday plans - DIY holidays, I guess we can call them. With the various options available to us, this activity comes as no surprise. Budget airlines, online bookings, and so on - these could really cut down on our holiday costs. Yet this also has a downside to it, namely, the fact that travel protection is not always included in DIY bookings. If you book holiday packages through a licensed travel agency, you are guaranteed cover by the Air Travel Organisers' Licensing (Atol). If you plan your own trip, however, you may not be covered.

Is there a way out of this dilemma? You bet! Use your credit card!

Using your credit card to purchase airplane tickets, hotel accommodations, and other purchases for your holiday is a good idea because if you suffer from "misrepresentation" by the travel firms that you deal with, the credit card company will be jointly responsible to cover the cost. That is, if your purchase is more than Ј100 and less than Ј25,000.

More than this, you can actually find good deals for credit cards when it comes to travel related purchase. For example, look for introductory card deals wherein you wouldn't have to pay interest for a specific period of time. There are many of these promos going on. What happens is that you make a purchase and you do not pay interest on your purchase for say, 10 months. Of course, after this period, you would have to pay for the full APR. Also, it is important to note that you have to pay your bill in FULL in order to avoid additional charges.

Another thing to look for are cash back cards. Using these cards will actually put some money back in your hands every time you make a purchase. Considering that relatively large amount of money that you will probably be spending on your holiday, it is a good idea to use cash back credit cards.

More so, there are cards which operate jointly with specific airlines and hotel bookings. If you use these cards, you can get perks such as discounts, rebates, and the like.

You can also use your credit card for purchases while on the trip. In most cases, it is a good idea since you will be sure to get a better exchange rate. However, you have to make sure that your credit card company does not charge extra for international use. Many cards actually do charge a fee although there are some that do not.

By Nancy Sinha