More than a fifth of people who are planning to go on holiday in 2023, said they would be paying for their holidays using their credit card, according to a survey from Go.Compare.*

Go.Compare asked more than 2000  people about their holiday plans for 2023, where respondents were asked “How are you planning to pay for any holidays you hope to go on in 2023?”, nearly a quarter (23%) of Brits planning on a holiday this year answered that they were planning to use a credit card to pay for their holiday this year, with another 5% planning on taking out a loan to cover the cost.

Under 25s were the group most likely (29%) to be relying on credit cards to pay for their trips, with the under 35s the most likely to take out a loan (9%). It was these younger age groups who were also the most likely to be going on holidays with other family members who would be paying for the trip (21%).

More than a third (40%) of people said they had enough money in their bank account to pay for their holiday, or that their monthly salary covered the cost. The survey revealed that those over 65 were most likely (50%) to pay for their holiday in this way.

Ceri McMillan, Go.Compare Travel insurance expert, said on these results: “It’s worrying that a significant proportion of people are planning to use their credit cards or take out a loan to cover the cost of a holiday this year.  This could be yet another knock-on effect of the cost-of-living crisis, where disposable incomes are being squeezed and people are having to use other methods of payment for big purchases.

“It may be that some people are opting to pay for their holidays on their credit card as it means you are further protected if your travel firm collapses – most credit cards offer buyer protection on purchases between £100 and £30,000 – but it also provides the chance to spread the cost of the holiday across the year. But for whatever reason people are using their credit card, it is always important to fully understand the benefits and risks to your financial decisions, no matter how big or small.”

Go.Compare has written a helpful guide on the things to consider when making the decision to pay for your holiday using your credit card.

Pros

• Provides extra protection from Section 75 of the Consumer Credit Act –  if you paid for some or all of your holiday by credit card (not debit or charge card) and if the price of the holiday is more than £100 and less then £30,000 – which could help you get a refund if you need one;

• If you are using a rewards card then you could receive more benefits, such as air miles;
• It allows you to spread the cost of the holiday across more months if you need to.

Cons

• If your interest rate is high on your credit card, it can increase the cost of your holiday;
• Some travel providers may add fees for using your credit cards or not accept them as a means of payment;
• Using your card when you are on holiday may bring with it overseas fees or charges for withdrawing cash.

The full article can be found here: https://www.gocompare.com/credit-cards/holiday-use/