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Four ways to protect your finances on holiday

Author: Laura Whitcombe / Source: Coffee House


British families are forecast to spend £1,284.54 per person on this year’s summer holiday. That’s up more than £200 on what they forked out last year, says charitable shopping website Give as you Live. And with inflation gathering momentum and the pound still weak, many of us will feel we’re not getting a lot of bang for our buck when we finally get to our destinations. So it would be sensible to consider the simple steps you can take now to protect any money you’ve already spent on your trip – as well as what you’ll spend when you get there – to ensure you don’t end up paying out a penny more than absolutely necessary.

Step 1: Pay for everything over £100 on your credit card

As well as being able to spread the cost, another important advantage of using a credit card is that your purchases are protected by Section 75 of the Consumer Credit Act. This means that if anything goes wrong – for example, the holiday company goes bust or the pricey watch you bought turns out to be a fake – you’ll be able to get your money back on transactions of between £100 and £30,000. This is because ‘the credit card company is jointly and severally liable for any breach of contract or misrepresentation by a retailer or trader’, explains consumer group Which?.

Credit cards also tend to offer competitive exchange rates (although foreign usage fees may apply) and should you fall victim to payment card fraud you can rest more comfortably knowing it’s the credit card company’s money at stake rather than the contents of your bank account. However, bear in mind that you may be charged a fee for paying by credit card (typically 2 or 3 per cent) so the added protection they offer doesn’t always come for free.

Step 2: Arrange travel insurance immediately

As soon as you book a holiday, you should put insurance in place. This is because as well as paying out should anything go wrong while you’re away – such as missing luggage, theft or injury – the vast majority of policies will also cover you for cancellation from the time you buy the insurance. And cancellation accounts for nearly a third of travel insurance claims made by UK holidaymakers, according to industry data. Circumstances it protects…

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