Credit & Debit Cards

Should I use a Credit Card when Booking my Holiday?

If your holiday costs more than £100, it is a good idea to pay for it, or part of it, using a credit card. This is because the Consumer Credit Act of 1974, makes the credit card issuer equally liable for any breaches of contract, including the tour operator going broke, or the holiday they provide not being the holiday you booked. However, this provision only applies if you book directly with the tour operator, and not through a travel agent. Be wary, although your debit card has visa written on the front, our experience is that it does not provide credit card protection.

What about charges using my card abroad?

The best way to get cash abroad is to use a debit card. In almost all countries, there are adequate numbers of cash dispensing machines where the traveller can make withdrawals. If you use a credit as opposed to a debit card, you will be charged a cash advance fee, commission on the transaction and interest from the date of the withdrawal. Popular opinion is that at the time of writing (Feb 2006), the Nationwide holds the stage for overseas card use. They do not charge 'foreign usage' fees for either credit or debit cards and the conversion rate is based on the 'wholesale' rather than the 'tourist' rate. The differences can be substantial. Neither does Nationwide charge a foreign usage fee for overseas purchases. Other card issuers typically charge 2.75%. When using card abroad, take the usual precautions at the ATM, check for onlookers or devices on the machine that may seem unusual. Don't forget, much of the credit card fraud in the UK is committed by criminal gangs that have migrated to UK from the continent. Some stayed at home!

Credit Cards & Medical Insurance

it is not unusual for us to hear people say " I don't bother with travel insurance unless I am forced to. I use the credit card cover". This insurance does provide some cover, the extent of which is dependent upon the terms and conditions imposed by the card issuer. It is never adequate cover. Any responsible tour operator requires you to have adequate travel cover, though they are not permitted to require that you buy their insurance policy. You should always take out the insurance as soon as you have booked the holiday, in order to secure cover for pre-holiday events that may force cancellation. We get frequent correspondence from people who have not done so and are trying to hold the tour operator responsible for circumstances that prevent them from taking the holiday. One complainant cited pregnancy as a reason why the tour operator should give a refund. We do not know the circumstances of the conception, but no evidence was provided that implicated the tour operator!

The Most important piece of Advice we can give

One of our most frequent complaints concerns unauthorised charges against credit cards used to pay deposits to hotels, car hire companies etc. The traveller gives the credit card details to the trader and some weeks after returning from holiday, finds that false charges have been levied on the card for additional extras, alleged damage to hire vehicles etc. Contact the card company and they will do nothing about it. We have reports from seemingly reputable companies that have levied several hundreds of pounds for the smallest dent in a car, or the loss of a hub cap. One American visitor saw an endless stream of charges from a flea pit in Kensington that she had refused to occupy and cancelled. Our best advice, and a practice we follow, is to obtain a credit card with a very low limit that you can use for deposits for car hire, hotels etc. Alternatively or in addition, open a separate 'travel' bank account and deposit just the cash you need for the holiday for withdrawal on your debit card. Take a spare card for emergencies and keep that in the hotel safe. If your debit card is stolen, the thieves cannot take what is not there.