To use a credit card for a holiday?

[WindowGazers]

I've never had a credit card before, and don't have any debt other than for a product I bought which costs me £30 a month. I can never afford the lump sum to go on holiday, and all my savings are in a fixed rate account which I can't access. This is mortgage money as I'd like to buy a house and don't want to dip into it. I was thinking of a 0% credit card instead and just using this to go on holiday, paying it off over a year, then doing the same a year later. I'm good with money so I'd have a plan in place of monthly payments to pay it off. Is this a wise thing to do?

This!! We do the same - the amount in savings far outweighs anything on a credit card but if you can get 0% interest and earn upwards of 5% in fixed rate/investments, why on earth would you spend it?!

You have the money, it’s just in savings. As long as you can access in an emergency and credit card isn’t being used for frivolous spending, it makes sense to use it

A lot of MN have a very risk averse attitude to investment - of course everyone’s circumstances and background is different so reasoning is different so no judgement but do what’s right for you. In your shoes, I’m seeing a massive saving by going before being bound by school holidays so would absolutely do it

I used to pay for holidays this way, and never would again. There's nothing more depressing than to be stuck paying off a credit card bill for months after the holiday is a distant memory. I now save up in advance, or I don't go on holiday.

I do agree with not making a habit of paying for something months after it’s happened but would make a one off exception because of starting school. We book our holidays around a year in advance so they’re always paid off by the time we end up going on them

Depending on who you bank with already. This is what I’d do . Move your bank account to NatWest and get £200 . You’ll get the £200 once you’ve paid in £1250. Then move it to first direct and get another £175 and a gift card ( think it’s £30).
Thats an extra £ 375 you didn’t have before.Then book a holiday before your little boys starts school and it becomes too expensive. I missed your post with those details so I apologise for being snippy.

But everyone’s circumstances are so different.

Many people think nothing of being tied into a huge mortgage for years and years in a house far bigger than they could ever need. We would rather be in our relatively small, mortgage free 3 bed semi and use our disposable income to pay for a holiday - which we use a 0% credit card to pay for and then we pay it off over the year. That’s the only debt we have and even if dh lost his job tomorrow we could still afford to pay it off (I used to be a high earner and have other income).

We started to do this years ago when we wanted something to look forward to and wanted to book ahead rather than save and then go - we needed to know the details well in advance and not make it as last minute thing. It works well for us.

People on Mumsnet are generally very judgy about debt and credit cards but for most people as long as you’re careful and use them wisely they can be really useful.

Also, Jet2 and Tui offer monthly payment plans. They do have some interest on them though so better to use a 0% card if you can.

Basically, you should save what you intend to pay into a credit card monthly till such a time when you have enough to book an holiday. If the best deals you get are months away then book that and keep saving for spending money, etc or save for your next one.
Some people go on holiday using credit cards but it’s just a slippery slope given that an holiday is not a necessity in any way

First direct have a regular saver which pays 7% interest atm. I’d save as much as I could into that once your little boy starts school to save for your next holiday.

If you book tui or jet2 in a travel agent you can pay it up, no interest. You just pay a deposit and the balance needs to be paid 12 weeks before travel. They also price match or even beat online prices; and your holiday is protected through abta.

If you do book a holiday, make sure you have travel insurance in place the same day you book.

We have no credit card debt because we can afford to pay it off. With a cc for a large purchase like a holiday gives you extra security that you don't get with a debit card imo obviously. I would never encourage anybody to be in debt for a holiday.

I use credit cards for everything and pay the balance each month.
Sounds like you've got a really good 0% interest on purchases card deal so it's not like you'll be paying extra to use the credit card. I'd go for it.

I get why some people are terrified of credit cards. I got myself in stupid debt with them when I was younger. But I cleared my debt and stopped seeing them as "Free Money" and more of a security tool, especially now I purchase the majority of things online.

I think it's ok if you can pay the credit card bill over two or three months. Not if it's going to take all year.
Also worth booking flights and hotels that can be paid in two parts rather than fully upfront.

Go for it but read the small print on your credit card. When i was in my early 20's I paid for a holiday using a credit card that was 0% interest for a year. But it was only 0% if you paid off the full balance each month, which i didn't realise. So i ended up being charged interest because i was paying it off bit by bit each month.

OP sounds pretty sensible with money - people don't normally get to a point in life and suddenly become profligate.

I have loads of cc debt, and I won't do this because I know I need to prioritise other things. But if I had basically no debt and wanted to book a holiday now? Yes I'd absolutely do it. If you think you'd be tempted, use it for the holiday then cut up the card or reduce the limit right down.

Holidays are important.

Ah I see. That’s good to know. I wasn’t sure how it worked. 😊

Sorry I mean holidays are important, we all need a decent break every now and again.

Not a lot of people do! I use Hays Travel and they have always found me fantastic deals (I worked as a travel agent myself so I am also good at finding deals but I prefer to give someone else the business since it doesn’t cost me any extra, and they also sort everything for me (print out tickets and stuff)

We have a credit card which we use to pay for holidays, flights, car hire, etc. In fact we pay for our weekly shop, petrol, anything we buy while out on the CC. We pay it off every month before any interest is due and don't consider that debt. We don't have any debt at all, not even a mortgage. We still use a credit card for the protection it gives and pay it off promptly. If OP does this she will build up a decent credit rating which is essential for getting a mortgage.

So while I would be concerned that OP needs to have access to her savings to ensure that should anything happen to her income, she can clear the credit card amount without incurring charges, I don't think there's anything inherently wrong with using a CC in this way.

I wouldn’t go on holiday if I didn’t have the actual money in my account to pay for it. Don’t get into debt for it, especially when you’re saving for a house.

It's literally what the op intends to do though, so it's fine.

Obviously I would never advise anyone to get into actual debt for a holiday, but if someone has say 1k in savings for a holiday, it makes financial sense to keep that money in savings and earn interest on it if you can borrow 1k for free and repay that over time.

If OP only has enough money to make small payments over time to repay the holiday then there is nothing sensible about using a credit card for it. The back up savings should be out of the equation here as OP wants to buy a house, who uses their house savings for a bloody holiday?

What happens when something unexpected comes up in the month?

Having savings and using a CC is only financially savvy if you have enough cash money from one month to the next as well.

As a single parent who works full time I need time away with my dc every year. Something that two parent households will never understand. I pay for my holiday every year on a CC and pay it back before I go on the next . I do however save up on my one household income for my spending money.
Life is short and as long as I can make payments which I can as in very secure employment I will continue to do this year in year out.
I save every month for things that I wouldn’t/ couldn’t put on a CC like home improvements/ tradesmen etc. All
CC 0% for at least 24 months.
Go for it op and have a great time with your ds

I always make large purchases on my CC because of the extra protection. But I wouldn't spend any money that I didn't already have in savings. And I wouldn't go on holiday if I didn't have an emergency fund built up.

OP isn't using house savings for a holiday. That's literally the point of the thread.

In your shoes I would ABSOLUTELY take the opportunity to take him away before he is in full time school, things are much much harder and more expensive to manage once the law says you MUST keep holidays to moon term time. You will be faced with a fine AND over inflated prices. So yes, I would take him and put it on a credit card and pay it off over 6-12 months, especially as you have savings you could added should you lose your job or have another emergency.