A Holiday to Tenerife Could Take Consumers Ten Years to Pay off

| February 18, 2014

Owning a credit card feels liberating. And having several of them can put you on top of the world. Until all the fees and charges start to barrel in. A lot of travelers charge their travel escapades to their credit cards. And that is not surprising, considering the rather low monthly repayment schemes that some credit card offers. For example, a family trip to Tenerife looks more affordable when charged to a credit card, rather than paid in full. But do you also know that such a holiday could take you 10 long years to pay off? At least that’s what some studies suggest.

Pros and Cons of using a credit card for your holidays

But don’t get it wrong. Credit cards can be very helpful when it comes to high-ticket purchases such as a weeklong family vacation in a far off island like Tenerife. Without the travel privileges and irresistible deals that credit card companies come up with, many families would have to make do with a backyard pool vacation for the rest of the summer.

The Cons

The Pros

  • More affordable monthly repayment scheme (compared to paying for the trip in full)
  • Eligibility for frequent flyer miles
  • Free travel insurance (for certain credit cards)
  • Section 75 protection

Details of Section 75

Perhaps one of the best advantages to charging a vacation to your credit card is this particular protection clause. Section 75 pertains to the liability assumed by both the retailer and the credit card company for every purchase that a consumer makes through his credit card.

Section 75 gives consumers the right to ask for a refund if anything goes wrong with their purchase. Claims under Section 75 are shouldered by credit card companies if the retailer closes down even before the purchase is completed or if they simply choose not to reply to customer inquiries or complaints. It is also applicable for faulty goods arriving at the buyer’s door.

Section 75, however, isn’t applicable to debit cards. What debit card users can apply for instead is the charge back option that usually comes with their cards. Consumers, then, should be very careful when choosing which between their credit card or debit card they must use for vacation purposes. ATOL protection isn’t always applicable, especially when the flight and accommodation is booked separately. It’s just great that Section 75 can cover what ATOL misses. Section 75 can provide protection to purchases made by consumers, which explicitly includes travel bookings, between the range of ?100 and ?30,000.

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