Subject to the credit limit available, and the interest rates which apply to your account, a credit card could be a flexible and cost-effective way to pay for a holiday.
An introductory or promotional rate could offer low or even 0% interest on card purchases. To limit your interest costs, aim to repay your balance before any offers expire, at which point your standard interest rates will apply to your outstanding balance.
Note, if you miss a payment or go over your agreed credit limit, you could lose any promotional or introductory interest rates. If you do use a credit card, it’s important to manage it carefully.
Also be aware, unlike a personal loan, there’s less structure around your repayments, which could make it harder to budget, especially if you use your credit card to make further transactions.
Unless a 0% interest rate applies to purchases, to avoid paying interest on purchases, you need to pay off your statement balance in full and on time every month.
You can repay as much as you want when you’re able to, or as little as the minimum payment each month. Just be aware that if you only pay the minimum, it’ll take longer and cost you more to clear your credit card balance.
Where the total purchase price is over £100 and up to £30,000, credit card purchases will usually be covered by Section 75 of the Consumer Credit Act 1974.
Before you make payments to anyone from your current account, it’s worth making sure the payment details are genuine. There’s a form of fraud, where emails including bank details are intercepted and changed by criminals, so you unconsciously send funds to the wrong account. This can be avoided by making a simple phone call, or requesting a printed invoice including the correct payment details.
Refer to our fraud hub if you’d like more information about protecting yourself.
Additional fees and charges may apply when using a credit card abroad, so make sure you understand the costs in advance.
