How to use credit cards when travelling

Santa Maria Novella station, Florence, Italy. Copyright Gretta Schifano

Credit cards can be extremely useful when you’re travelling – as long as you ensure that you pay off the credit card balance in full every month. This is really important because if you don’t pay what you owe each month then you’ll end up being charged high levels of interest. The best way to make sure that you pay your credit card bill on time is to set up a direct debit for the full amount so that it’s paid automatically.

TSB have asked me to write about the benefits of using credit cards sensibly when you’re travelling. This is how we use our credit card when we travel.

Consumer Credit Act

Section 75 of the Consumer Credit Act gives you legal protection when you pay by credit card, as long as the item or service costs between £100 and £30,000. The aim of this legislation is that you, as a credit card customer, should never have to pay for something which you don’t receive. You don’t even have to pay the whole amount by credit card to be entitled to this protection: you could just use the card for the deposit and pay the rest in cash if you wanted to, as long as the total cost is between £100 and £30,000. This means that if, for example, you pay for a holiday by credit card and the holiday company goes bust before you take the trip, your credit card provider has to reimburse you for the cost of the holiday. We always use our credit card to pay for expenses such as flights for this reason.

Bookings

We usually travel independently rather than going on package holidays and we always use our credit card to book flights, accommodation and hire cars online before we travel. We have to book in advance because we have to travel during the school holidays, the busiest and most expensive time to travel. If we didn’t have a credit card it would be very difficult to make our bookings – and we wouldn’t have the protection of the Consumer Credit Act.

Emergencies

Having a credit card when we travel gives me peace of mind in case something goes wrong. If we had an unexpected expense on holiday – for example if we lost our cash somehow or if our luggage didn’t turn up at our destination – then I know that we can use our credit card to help us (although we always have travel insurance too – read my post here about how to find the best family travel insurance).

Waiting for luggage to arrive at Gatwick airport. Copyright Gretta Schifano

Withdrawing cash

We don’t use our credit card to withdraw cash from cash machines when we’re abroad because of the cost involved. If you do use your credit card to withdraw cash when you’re abroad your card provider will charge you a fee each time. If you do use your credit card in this way it’s more cost effective to make a few, high value withdrawals than it is to make lots of low value withdrawals. If we need to withdraw cash when we’re abroad we use a prepaid currency card.

Making payments

Most credit card providers will charge a transaction fee (typically of around 3%) each time that you use your credit card abroad. There are some credit cards with lower transaction fees, and some with no transaction fees, so it’s worth finding out what your provider charges and possibly even applying for a different credit card to use abroad. We use a credit card with no transaction fees when we need to make payments abroad.

Street market, Bologna. Copyright Gretta Schifano

Do you use credit cards when you travel? If you don’t use credit cards, what payment method do you use?

Reward credit cards

Reward credit cards can help you to save up for travelling – you can read my post here about using reward cards.

Disclosure: This post is sponsored by TSB. All opinions, words and images are my own.