Six money-saving ways to pay for your holiday

Spend less on your holiday by spending sensibly

Marcus Webb – Virgin Money Living Mentor

by Marcus Webb | Independent Money Mentor

Editor of Delayed Gratification and independent journalist

If you’re not careful then your dream holiday can turn into a financial nightmare. Avoid the pitfalls with our easy guide to a getaway that won’t break the bank.

The best way to pay for your holiday is...

...with money you have

If you need to take out a loan to pay for your holiday, you might want to rethink going on holiday. Although it might not seem like it when you’re in the office on a rainy afternoon, compared to other things – rent, food, utilities etc. – holidays really are non-essential items. 

...with a credit card

If you use your credit card to buy something that costs over £100 and under £30,000, you’re covered by section 75 of the Consumer Credit Act. Which means if a company fails to supply goods or services, or if the goods or services are not up to standard, then you’re covered. So if the airline or travel company goes bust and your holiday is cancelled, you can do more than hold your head in your hands and sob. You can claim back what you paid. Several airlines have their own credit cards offering air miles, reward-scheme points and various perks – but with hefty joining fees you have to be a frequent flyer to make a saving. 

...or possibly a debit card

Both debit and credit cards offer protection if something goes wrong with your purchase, but the rules are not the same. If you use a debit card you are not legally protected, yet Visa, Mastercard and Amex are part of a scheme called Chargeback, which works in a similar way to the Consumer Credit Act and for any amount of money. It is worth heading to the impartial Money Advice Service for more detailed advice on both credit and debit card protection. chunks

Many travel companies allow customers to spread the cost of their holidays into monthly chunks, usually paid through Direct Debit. This can be a godsend if you want to bag an early booking bargain, but don’t have the cash to pay upfront. Do look out for extra fees and make sure you’ve always got the money in your account to cover payments when they are due, otherwise your holiday might cause the kind of stress it was meant to bust. 

...on non-dodgy websites

When booking hotels and tours in other countries, you might come across some worryingly unprofessional websites. Rubbish graphics, blurry photographs and spelling errors aren’t necessarily a reason to be alarmed – not everybody has the talent, budget or spelling skills to make a perfect website. But if you’re suspicious, there’s no harm in taking some extra steps to calm your nerves – do an internet search to dig for dirt, call the phone number on the site to see who answers, or look for alternative ways to pay. You can also use a website such as to find out the name of the company who owns the domain. Finally, make sure it’s always a secure website – your browser should warn you if a site’s security certificate isn’t up-to-date. 

...and without paying unnecessary fees while abroad

On the trip itself you’re best off with a credit card that doesn’t have foreign transaction fees, although you should look out for other charges and high interest rates. Finally, watch out for dynamic currency conversion – a service that gives you the option of paying in sterling abroad. It’s almost always cheaper to pay in the local currency. 

Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.