You CAN afford a summer holiday

Fancy a summer holiday this year but worried you can't afford it? Well, maybe you can...

For many of us, the dark and dreary months of January and February prompt us to start thinking about where to jet off to for our summer holiday.

However, recent research from AA Travel Insurance has revealed that at least a fifth of people could forgo an overseas holiday this year. And the reason? Well, 40% of people say they can’t afford a holiday abroad or that the economy has discouraged them from booking an overseas trip. 

But the good news is, even if you think you can’t afford a holiday, you may find you can, thanks to that handy item known as a credit card!

The benefits of a credit card

Using your credit card to help you get away for a much-deserved break has several benefits.

Firstly, if you pay for your holiday with your credit card, you’ll be protected under Section 75 of the Consumer Credit Act. So this means that if you spend between £100 and £30,000 on a single purchase, and something goes wrong with that purchase, you’ll be able to apply for a refund.

But on top of this, your credit card can help to pay for the holiday itself through rewards. So let’s take a closer look.

Fly away with British Airways

The American Express British Airways Credit Card allows you to earn one BA mile for every £1 you spend. You’ll also earn 1,000 BA miles if you spend £500 in the first three months.

Alternatively, if you’re prepared to pay £150 a year, you can apply for the American Express British Airways Premium Credit Card and receive even more BA miles. For every £1 you spend, you’ll collect 1.5 BA miles and for every £1 you spend on BA flights and holidays, you’ll earn three miles. You’ll also receive 6,000 bonus miles when you first spend on the card.

You will then be able to redeem these BA miles on flights. You can find out how many you will need to fly to various destinations on the British Airways website.

What’s more, if you spend £20,000 on the standard card in a year and redeem your BA miles on a British Airways flight, you’ll receive another ticket for a friend to come with you! For the premium card, you’ll only need to spend £10,000 in a year to qualify for this.

You’ll also receive travel accident benefit with these cards – up to £75,000 with the standard card and up to £250,000 with the premium card.

However, there are, of course, drawbacks to these credit cards. Firstly, American Express isn’t accepted everywhere. And secondly, you can only redeem your miles on British Airways flights. So this won’t be suitable if you’ve vowed never to step onto a BA flight again!

Jet off with Lloyds Duo

Another option is the Lloyds TSB Airmiles Duo credit cards. If you apply, you’ll receive two credit cards – an American Express card and a MasterCard. This means you’ll have the MasterCard to fall back on should the American Express card not be accepted.

Both of these credit cards are part of the airmiles scheme and you’ll receive one airmile for every £10 you spend on the American Express card and one airmile for every £50 you spend on the MasterCard.

Again, once you’ve collected enough airmiles you’ll be able to turn them into a flight. You can see how many miles you’ll need here.

And unlike the BA miles scheme, when you go to book your free flight with your airmiles, all flights include airline taxes, fees and surcharges!

Take me away Tesco

If you regularly shop at Tesco, there’s yet another option. The Tesco Clubcard Credit Card MasterCard allows you to collect Clubcard points as you spend. For every £4 you spend on the card anywhere in the world, you’ll collect one Clubcard point.

However, your credit card also doubles as a standard Clubcard so you’ll collect points that way on your Tesco purchases too! And if you take the card out before 3 March, you’ll benefit from a bonus 500 Clubcard points. Just make sure you apply within the next six weeks.

You can then convert your Clubcard points into airmiles or BA miles (note, this is just one way to use your points – you can see a full list here). Every £2.50 in Clubcard vouchers gives you 50 airmiles or 500 BA miles. So this can be a great way to earn those extra miles for your holiday!

Even more reward cards

There are of course, even more reward credit cards such as the Virgin Atlantic White or Black Card or the bmi American Express Credit Card, which will help you on your way to a holiday.

Unfortunately, I don’t have the space to go into them in detail here but you can read about them in Bag a free holiday with your credit card.

Interest-free holidays

Of course, all of these credit cards require you to spend before you’ll get anywhere. But if you are going to be spending anyway, you may as well be rewarded for your efforts!

Just remember, with the majority of reward credit cards, you should always pay off your balance in full every month, otherwise the interest you’ll end up forking out will far outweigh any rewards you receive.

If you know you have no chance of being able to do this, going down the rewards route isn't recommended. Instead, you'd be better off paying for your holiday on a 0% on new purchases credit card, as that way you won't have to worry about paying interest for a set period. 

The Tesco Clubcard Credit Card MasterCard that I’ve already mentioned is the most competitive choice because it offers 13 months interest-free spending. So this means you can spread out your holiday payments over the 13 months, without worrying about the interest stacking up. Just make sure you pay off your balance in full before the interest-free period comes to an end to avoid being hit with an interest rate of 16.9%. (And of course, you can also earn Clubcard points as you spend that you may be able to put toward's next year's holiday!)

Related how-to guide

Have a cheap holiday

Find out how to cut the cost of your flights, get discounts, tip correctly, spend wisely, get cashback and most importantly, cut the cost of your holiday.

See the guide

Alternatively, the Sainsbury’s Finance MasterCard for Nectar Card Holders offers 12 months interest-free on all purchases (as well as balance transfers). So this is only one month less than the Tesco card. Just bear in mind you will need a Nectar card to qualify and again, make sure you clear your balance before the 12 months comes to an end.

So as long as you’re sensible with your spending, you may just find you can afford that holiday after all!

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