Credit Card – The Best Way to Pay for Your Holiday

• Published: August 12, 2010 by Umma Queenan Comments (0)

The easiest and sure-fire way to ensure you’ll get your money back if the airline goes bust is to pay by credit card.

This can mean paying a few pounds more on the price of your trip, as some companies impose a surcharge of around 2 per cent for credit card payments, but it’s worth it as you’ll get automatic protection under the Consumer Credit Act; and here’s where it kicks in order to help you out.

Paying by debit card doesn’t automatically give you the same protection as using a credit card. Some companies, like Visa, operate their own scheme called ‘chargeback’, where you can make a claim through your bank if you paid by debit card, but there’s a time limit for claims. Paying by cash or cheque offers you zero protection.

If you don’t have a credit card you might want to consider Scheduled Airline Failure Cover. You can buy this insurance from a travel agent or insurer, and it pays out for the cost of your ticket home if your airline collapses while you’re abroad.

Watch for sneaky credit card companies trying to wriggle out of their responsibility
if your airline goes bust while you’re away, and you don’t have ATOL protection or Scheduled Airline Failure Cover, you’ll have to buy your own ticket home.

Buying a one-way ticket on the day will cost more than the return portion of your original ticket, but if you paid by credit card you can recover this extra cost by making a claim under Section 75 of the Consumer Credit Act once you’re home, but there have been cases of credit card companies trying to wriggle out of coughing up.

In some cases, they may try to get away with simply refunding the original unused return portion of your ticket. To explain this basically, let’s say you booked a return flight to New York with Superfast Airways. You pay the $300 return fare, get there, and two days into your trip find Superfast has gone bust.

You’re then left to book an alternative flight home which may well cost you many times more than the original $150 return leg of your ticket, but when you get home and claim against your credit card company, it tries to offer you just $150, despite you having had to fork out the additional cost to return home.

If this happens and the credit card company won’t budge, you should contact the Financial Ombudsman Service, who act as judge and jury in these matters.

Related posts:

1. Avoiding Problems With Credit Card Debt
2. Credit Card Debt Solutions : Understanding What You Can Do to Restore Your Credit

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