DON’T MAKE PAYING FOR YOUR HOLIDAY A LIFE SENTENCE
Consumers risk a financial jail term by only making minimum repayments
New research released by credit card comparison website Totallymoney.com, in partnership with the Centre for Retail Research hasrevealed that, this year, consumers are likely to load 8% more of their holiday bookings onto a credit card than in 2013 –a whopping £9 billion more.
But the price comparison experts have also highlighted the fact that more than one in ten (11%) credit card users only make minimum repayments on their credit card every month.
This would mean that a holiday to Hong Kong costing just over £3k would end up taking a little longer to pay off than the average life sentence at 15 years and 3 months.
When it comes to credit card spending and booking a week in the sun, data reveals that a holiday to Tenerife (£1,232) for a family of four would take just over 10 years to pay off if people opt to only make minimum repayments, incurring an interest bill of £912 – almost doubling the original holiday price.
The trip of a lifetime sightseeing in South Africa would see a financial jail term of nearly 20 years by the time you cleared the balance with minimum payments – meaning you are probably more likely to get a bus pass than go back packing again.
Will Becker, CEO and co-founder of TotallyMoney.com comments: “The population seem to be far more confident in their abilities to manage debt, especially with credit card spending set to increase by 8% this year. It’s important that we encourage consumers to be savvy and make the right decisions when it comes to managing credit cards and holidays.
“People need to be aware that making minimum payments can be a very long and costly process. Choosing the right credit card for your individual needs is crucial to being a savvy spender. It’s very much about being sensible and getting the best deals out in the market so it’s beneficial to both your credit rating and bank balance.”
With this in mind, TotallyMoney.com has released a number of tips to help consumers when it comes to booking their holiday with a credit card.
- If you book your holiday on a credit card, make sure you pay off more than the minimum each month. Most people like to get away at least once a year so spread the cost by booking with an interest free card – just make sure you pay off the full amount before the end of the interest free period.
- Credit cards offer protection under Section 75 of the consumer credit act. So if a travel company goes bust, you can safely claim your money back from the card company.
- Get a rewards or freebies credit card. Some credit cards offer flights or other monetary dealsas sign up offers, others offer hotel points and air miles, which you can save towards your yearly break.
- Good credit rating? Get a 0% deal. If you’re booking the holiday of a lifetime this could help you spread the cost and you won’t pay a penny of interest.
- Just after midnight on a Wednesday is reported to be the best time to bag a deal, as travel companies update their prices – so keep an eye out.
- Consider flying midweek as flights are cheapest on Tuesdays and Wednesdays. Flying during less popular hours such as very early or late can also help to cut costs.
- Don’t decide on specified dates, unless you want to pay the price. If you can be flexible, moving the date by a day or two could save you hundreds of pounds.
- Haven’t booked a holiday for summer yet? Start looking now. Early in the year can be the best time to get a deal, especially for the peak summer season.