Should You Be Borrowing To Go On Holiday?
The wider population seems to think that there isn't a problem with borrowing money to go away.
Research by online travel agent sunshine.co.uk has revealed that 28% of UK citizens went away on credit in 2010 and 50% used their credit card to purchase their trip.
Although booking a holiday this way has certain advantages, it is unsettling that so many choose to risk the state of their finances for a spot in the sun.
The winter could look a lot gloomier for the one in four people who will still be paying off their holiday debt even after performing a credit card comparison
Sunshine.co.uk's study was carried out in August and involved 1,891 participants and aimed to determine how people pay for their vacations.
A quarter of those involved admitted that they had borrowed money, and a fifth of those would choose debt over a holiday-free year.
Paying in credit does seem to be a result of the times to some extent, as a third of those borrowing had to do so for the first time, which in turn decreases the chance that they'd be eligible for 0% purchase credit cards .
68% said that they regularly borrowed to fund their holiday.
A half of those now in holiday debt used a credit card to borrow the money, a quarter took out a loan and a fifth badgered their relatives or close friends for the money.
Commentators said that in the tougher economic climate borrowing money was increasingly becoming a necessity for those that want to get away on holiday.
So, is it really worth borrowing the money?
There are certain advantages, particularly the spreading of costs to make the big amount more digestible.
4 in 10 participants named this as their reason for borrowing.
On a 0% purchases credit card, the sum wouldn't even incur any interest provided you paid it back correctly and punctually.
Credit cards also come with the protection of section 75, which is particularly important when so many airlines and holiday companies are going under.
If a holiday was booked and the company went out of business, credit cardholders would get their money back but debit cardholders would not.
The collection of travel rewards using air miles credit cards can also be used to save a fortune on flights.
However, this method of payment also has its downside.
Customers need to be scrupulous with repayments and smart with deals to save money this way.
Commentators went on to say that although borrowing can seem cheap at first, having to pay interest over time will lead to it being an expensive trip.
50% of those who borrowed in 2010 will be paying back their debt for a whole a year.
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