Family holidays are becoming increasingly expensive. Amendments to the Education (Pupil Registration) (England) Regulations 2006 came into force in September this year (2013) which have removed, or at lease severely limited, the discretion that head-teachers and principals previously had to grant time out for students during term. This has the effect of making holidays more expensive for families as they are forced to pay premium rates to go away at peak times during the school holidays. Parents who choose to ignore this can be fined £60 per child. So as we all face rising bills that are not matched by salary increases, saving up for that summer holiday can become increasingly challenging.
Not going away may be the simple option for many families struggling with their bills. However, many may choose to take advantage of offers from many holiday finance companies that now exist. However, it is worth considering the numerous methods of credit that you can utilise. Just because the company claims to specialise in holiday loans, that doesn’t mean that they are the best people to go to.
You may find that the best way to go on holiday now but pay later is to simply use a credit card. Many companies offer a promotional 0 per cent interest period for purchases for up to 12 months. Sometimes you can even buy currency with the credit card – although you should always check with the provider. When you do take out these credit cards, it is worth setting up a payment plan straight away as if you miss the minimum payment, credit companies often withdraw the 0 per cent offer and you may be saddle with expensive interest payments.
Using a credit card is a great way to get away for the summer but if you already have credit card debt, you may find that this option is not available to you – or at least not at an affordable interest rate. Should this be the case, it would be worth looking at consolidating your debts – particularly if, like many of us, you live in your overdraft. It’s not uncommon for banks to charge £5 a day to customers in a large overdraft which can add up over the course of a month. Thirty fives are £150 – which is a lot of money every month. Taking a loan to pay back the money could actually save you money as you would pay a lower interest rate. Many banks also offer a lower interest rate for larger loans so one way to pay for your holiday could be to borrow enough to pay off any debt AND your trip away. The bank charges and interest you save may even pay for the holiday.
Your bank will usually advise you on how best to pay your debts. You may be too worried about how borrowing money now will affect you in the future. You may not trust your bank to give you the honest facts. But you can actually check your own credit at Experian Credit Expert which will give you an independent view of whether you can actually afford to borrow more money.