Paying For A Holiday

[nigelf1234]

Hi
I just wondered whether it's worth paying a credit card charge when booking a holiday, so you can claim from credit card company if the holiday company goes bust. Or is it enough to make sure its ABTA or ATOL bonded? Any thoughts please?

[woofgang]

why wouldn't you pay on the credit card? Both of mine give loyalty points as well!

[bednobs]

if you wanted to minimise it i think it's still covered even if you only pay a part of it on the CC

[jno]

as bednobs says, I think if you just paid the deposit with your card that would be enough to cover the whole price (but I'm not certain of this).

[Misky]

I have been wondering about this too, because the credit card charges they add onto the payment are quite high. I found this:-
"Book a package holiday through a travel agent or tour operator and you’ll be protected by ABTA or ATOL should the company go bust. But if you purchase the flight, hotel or car hire separately through a travel agent, tour operator or website, you won’t have the ABTA/ATOL safety net as they only protect package deals." Plus, I suppose, you have your travel insurance too. I think I'm going to pay the balance of my Thomson holiday on my debit card....

[zebo]

I recall reading somewhere that if a debit card's used and a firm goes bust you can still claim but it's not as easy and the banks will try to squirm out of it, no surprise there then!
To be controversial, why do credit cards accept this responsibility for refunding against companies going bust, your breaking something you've bought? The cost of this free insurance is carried by everyone else, why don't people have sufficient insurance for their needs at their own expense. I'll duck now!

[New Judge]

“why do credit cards accept this responsibility for refunding against companies going bust”

They don’t “accept” it, zebo. They have no choice. Section 75 of the Consumer Credit Act means that for purchases of between £100 and £30,000 the card issuer is “jointly and severally” responsible for ensuring the goods or services are provided satisfactorily.

It has been ruled that paying just a small part of the cost (say, a deposit) by credit card means that the entire cost is covered by S75. Card issuers are continually trying to exploit what they see as loopholes in S75. The latest wheeze is to refuse compensation if the goods have been purchased by a second cardholder and not the principle cardholder. Their reasoning is that they have responsibility under S75 only towards the account holder. I believe this is still being resolved in the courts.

Debit cards (including most store cards and pre-payment cards) do not form a credit agreement so are not covered by S75. However, some debit card issuers do offer their cardholders protection which is similar to Section 75 protection. This is not enforceable under S75 but if they agree to do so under their T&Cs but refuse to do so you may be able to take action for breach of contract. Some also offer "breakage" insurance in the same way.

Travel insurance does not normally cover losses due to travel companies or airlines ceasing to trade.

[Misky]

Thanks for that New Judge - I paid deposit by credit card so will save myself some money and pay the balance by debit card.

[ummmm]

I think we need to get a credit card.