Whether you’re looking to secure a last-minute deal for a family holiday abroad, a break away in the UK or a luxury cruise with your partner, the question of how to pay for your trip is an important one. Credit cards are a popular option as they allow you to spread the cost of your holiday over several months, but they may not be the right choice for everyone.

Spreading the cost

Paying for your travel and accommodation with a zero per cent credit card can help to make the cost of your holiday more manageable. Instead of all the money leaving your bank account at once, you can pay for your holiday over a longer period of time in more affordable monthly instalments, without paying any interest. However, this is on condition that you pay off your card in full before the end of the interest-free period, make at least the minimum payments each month and meet any other terms of the card.

As an extra perk, some credit cards also offer rewards or cashback on your spending, which you won’t get if you pay for your holiday with your savings, for example.

Section 75 protection

Another benefit of using a credit card for your holiday is the protection you receive under Section 75 of the Consumer Credit Act. This protection means that if you encounter a problem, such as a cancelled booking or a provider going bust, you may be able to get a refund from your credit card company if you can’t get one from the provider directly.

This applies to purchases between £100 and £30,000, but there are specific terms to this protection. For example, you may not be eligible for a refund from your credit card company if you booked via a third-party provider. But whether you’re protected under Section 75 or not, it’s still a good idea to get suitable travel insurance so you’re fully covered for your trip away.

Budgeting is key

When used responsibly, credit cards can be a useful way to pay for your holiday. But, because the money doesn’t leave your account straightaway, there’s a risk that you could be tempted to splash out on an expensive holiday that you would later find difficult to pay off. Even if you pay for a holiday on credit, you should always budget and plan ahead to check you can make the repayments and clear your balance before interest charges start piling up.

If you borrow more than you can afford, you risk falling behind on repayments and building up an unmanageable amount of debt. The easiest way to minimise the chances of this happening is to make a budget to clarify how much you can afford to spend, and, crucially, sticking to this when booking your trip away.

However you choose to pay for your holiday, by budgeting in advance and making sure you don’t spend more than you can afford, you can enjoy your break away without worrying about how you’re going to pay for it.

Rhiannon Philps is a personal finance expert from Moneyfactscompare. For more information visit moneyfactscompare.co.uk