Let your Plastic Protect You

Whilst the number of credit cards available in the market is greatly reduced from a few years ago there are still some good offers around for holidaymakers to take advantage of this summer.

Economic times are hard and showing little sign of recovery. Whilst sensible to make the most of any tax efficient savings products such as ISA’s read more here, it is also sensible to make sure that any borrowings are on the best possible terms.

Getting protection from cancellation or failed travel companies is as important today as it has ever been. With several high profile travel organizations going under it is important to book travel using a credit card. But that doesn’t mean paying high interest charges before you travel. There are a number of 0% interest cards available with free credit periods of up to 6 months and even 9 months for those eligible. Careful selection can also get a card where no foreign currency fee is charged meaning savings every time you use them on purchases abroad over conventional credit cards.

But the best current deal has a 15 month interest free period on purchases with the additional benefit of no fees on purchasing travel money. Additional benefits also accrue so look out for deals.

Having booked your holiday using one of the cards above to allow maximum time to repay the cost, ensuring you pay as little as possible whilst on holiday also makes sense!

Whist some providers offer no foreign purchase fee, others provide valuable add ons such as family travel insurance for free. Although there may be no free period for payment those that repay the full amount each month may find the travel insurance a very cost effective add on. Borrowings are charged at 20.1% making it one of the more expensive options so is really ideal for those that pay off the full balance at the end of each month.

Increasingly popular options for managing holiday cash are prepaid card options. These are a great way to manage spending on holiday and are more flexible and safer than traveler’s checks and can be cheaper than credit cards.

With competition keen for prepaid cards, many providers run promotional offers and incentives that can make a real difference to the amount or foreign currency you can buy. If loaded with more that £500, for example, one provider will deliver the card free to your home address, use competitive exchange rates and charge no foreign currency fees. Other suppliers have other incentives such as cash back for minimum top ups. Some charge no application fee provided the minimum amount exceeds $20 or €10. Withdrawal fees from overseas ATM’s can be as low as just £1, €1.50 or $2 depending on currency.

This article was written by Sam, a finance writer based in the UK. Sam currently works for moneysupermarket.com .

Visit Sam’s twitter here.


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