What are the advantages of using a credit card to book holiday instead of savings?

[Sofiegiraffe]

Please can someone explain this to me in simple terms (I'm a little sleep deprived).

We are looking at booking a holiday for August time. I suggested to OH that we save like mad between now and July to pay for it. He thinks we are better to use a credit card to book it and pay off the credit card each month instead, as we have more protection on the holiday if anything went wrong and it was cancelled etc.

Can someone explain to me in simple terms what the advantages are (if any) of using a credit card to book instead?

Thanks

@Sofiegiraffe
I can't help you sorry !
But just wanted to say thank you for starting this thread !

I have £0.00 balance CC'S ,which in my mind are always to be saved for "emergency" stuff.

I am now going to pay for flights and hotel deposit on one ,,,and pay it off straight away .
Hope you have a lovely holiday .

@Sofiegiraffe

Thanks all this makes sense now.

I've been accepted for a credit card that has 0% on purchases for 20 months, so would it definitely be a better option to use this to book the holiday?

Yes

Book it on your credit card and pay the balance off straight away with your savings. You get the protection, the holiday is paid for, and paying off the debt quickly will look good on your credit record. Win all round.

I will never not book a holiday using my credit card. You have protection that you don't get with a debit card.
However I have the money available to ensure I pay it off instantly! So I'm not in debt with it, but the extra protection is there.

@Sofiegiraffe

Thanks all this makes sense now.

I've been accepted for a credit card that has 0% on purchases for 20 months, so would it definitely be a better option to use this to book the holiday?

Yes.

Pay for the holiday on the card, and use your savings to pay the credit card bill off in full.

If the holiday company goes bust, you will get your money back.

You very probably wouldn't have to put the full amount on your CC immediately anyway - you'd be paying a deposit now and the remainder nearer the time.

Don't forget to buy travel insurance as soon as you book the holiday - a credit card will repay you if the airline goes bust but it won't help if you break your leg and can't travel.

Can I ask a question about buying the travel insurance now ?

Am I buying the insurance still for the dates I want to travel ,or start the date now ?
Does that not mean I am paying for more months than I need ?

You can either buy an annual travel insurance policy, which covers all the travel you do in a year, or you can buy a single trip policy which just covers the holiday you're planning to take on (say) 1st-14th August 2022.

If it's a single trip policy, it doesn't matter when you actually buy it, it still covers that particular holiday on those two weeks in August - but if you buy it in advance it can also cover you (depending on the T&Cs) if there's some kind of catastrophe between now and then which stops you going.

Whether you buy annual holiday insurance to cover one or more trips , or buy holiday insurance for each trip, always buy it as soon as you’ve booked the trip.

You’re then covered if something should happen between booking and travelling.

Thank you so much .
That has really helped me .

@GreenClock

As someone who successfully made a Section 75 claim in 2020, I’m with your husband!

If you dislike the notion of credit you can pay off the credit card immediately with your savings (and I’d definitely do this unless the card offers 0% interest). The important thing is the protection.

Definitely

We have the funds and pay off our code each month (I appreciate we are in a fortunate position) but it is worth it for the protection .

We booked a holiday for June 2020 in Sept 2019 - flights and hotel separate

We had annual travel insurance and whilst they would pay out (£50 excess each wanted credit claim made first )

BA eventually when we established contact refunded flights in full and M&S credit card made us fill in forms several times but eventually got paid out in full for hotel (& travel insurance claim closed)