Fly Now, Pay Later: is the new travel loan service a good idea?
Fly Now, Pay Later loans you the money for your holiday which you can pay back in monthly instalments, but is it worth the monster fee?
A new service lets cash-strapped travellers take a holiday and pay later.
As the name suggests Fly Now, Pay Later offers to loan you the money to pay for your holiday. In return for an upfront fee you can split the cost of your holiday into between two and 10 monthly instalments.
Major caveat
Spreading the cost of your holiday may sound great but Fly Now Pay Later is not the best way to do it.
In order to use their loans you have to book via one of the firm’s travel partners – Travelpack or 360 Travel Group. This limits your ability to shop around so you may not be getting the best price on your holiday.
Another issue is the cost. In order to pay for a £1000 holiday over seven months I would have to pay a £149.90 upfront fee. That’s an interest rate of 14.99%.
Source: Fly Now, Pay Later
Better alternatives
A far cheaper way of spreading the cost would be with a credit card offering a 0% purchase deal. Then you can break down the payments for free, and you get the added protection of paying with plastic.
Pay for a holiday on your credit card and, if the company goes bust before your trip, you can seek a refund from your credit card provider if the holiday firm can’t pay out. This is thanks to Section 75 of the Consumer Credit Act.
Fly Now, Pay Later points out that using their loan service allows you to avoid the surcharge many holiday providers levy when you pay with a credit card.
Travelpack charges 2% for paying by credit card, but using a 0% purchase card is still far cheaper than Fly Now, Pay Later’s 14.99% interest charge.
If you do want to spread the cost of your holiday then the Sainsbury’s Nectar Purchase Credit Card offers the longest 0% period on purchases at 27 months.
Alternatively, Tesco Bank’s Clubcard Credit Card gives you 0% on purchases for 21 months and you’ll earn Clubcard points on your holiday purchase too.
Also, check if your current account provider offers a linked credit card. Halifax and Nationwide offer special deals to customers with cashback credit cards which offer 0% on purchases too.
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