Should you use a credit card while you’re on holiday?
You may choose to use a credit card to pay for food, transport, shopping and other holiday expenses while you’re away. But, as explained above, you should always make sure you manage your card responsibly and can afford to pay off your balance.
If you’re travelling abroad, you also need to consider any foreign transaction fees that may apply. If you want to use a card for your spending, it’s worth considering a specialist travel credit card that won’t charge any fees.
You could also consider using a prepaid travel card, which allows you to load a set amount of spending money on it. However, check for any fees these cards may charge.
Or, if you prefer, you can always exchange your money and take cash for your spending money, instead of using a card.
Take a look at our guide for more details on spending while you’re abroad.
Alternatives
Credit cards aren’t the only way to pay for your holiday. You could also pay for your trip using your savings or a personal loan, for example.
Debit card
Paying for your holiday with cash (or using a debit card) means you won’t need to worry about debt or your credit score, unlike using a credit card.
The earlier you start saving, the more likely you are to be able to pay for your holiday outright. You can work out a budget to see how much your holiday is likely to cost and how much you can afford to save each month in a holiday fund, ready for when you book your next trip away.
You can compare savings accounts to find one that pays a competitive rate of interest, so you get the best possible return on your money.
Bear in mind that, unlike credit cards, debit cards don’t offer Section 75 protection. However, depending on the situation, you may be able to claim back money via chargeback if something goes wrong with your holiday plans.
Personal loan
A personal loan is another way you could spread the cost of your holiday in monthly instalments. However, because a personal loan will charge interest, it will be a more expensive option than paying for the holiday outright or by using a 0% interest credit card.
Before taking out a loan to pay for your holiday, compare the loans available to find the most affordable option. Bear in mind that, the longer the repayment term, the more you will pay in interest overall.
It’s also worth checking your eligibility for a loan before applying, so you can see your chances of approval without affecting your credit score. Crucially, always make sure you can afford the loan’s monthly repayments as your credit score may drop and you risk building up debt if you miss a payment.
