Summer 2010 was a terrible one for the British travel industry as thousands of holidaymakers had their vacations disrupted through a combination of collapsed travel companies, threats of industrial action and even volcanic ash clouds!
So, as people’s thoughts turn to summer 2011 and with such uncertainty in the travel industry, does it make sense to book your holiday on a credit card?
Just over a month after Goldtrail’s collapse in July left thousands of holidaymakers stranded, another British tour operator, Kiss Flights, ceased trading leaving a further 13,000 people abandoned overseas.
Fortunately, Kiss Flights were part of the Civil Aviation Authority’s (CAA) Air Travel Organisers’ Licensing (ATOL) protection scheme and so most holidaymakers were able to complete their holidays and return to the UK with no disruption.
Also, as the company failed at the height of summer, the CAA also put in place arrangements to allow people to travel out on their holidays for the first 24 hours after the collapse.
On the downside, anyone that was due to fly after this 24-hour window would have had to go through the painstaking process of claiming back the money they spent on their holidays, a process that can take up to twelve months to complete!
But what protection is afforded to customers booking their holidays through companies that are not ATOL protected or, even worse, through companies that are set up with the specific intention of taking the money but never delivering the dream holiday?
It’s estimated that 30 per cent of holidaymakers booking online leave themselves open to becoming the victim of fraudulent travel operators.
This is generally due to the customer failing to check the authenticity of a site or through verifying their payment details on an unsecure web page, which means that third parties can intercept their credit or debit card information.
So what protection is out there?
If you book a package holiday, that is two or more elements of the holiday are booked together in a pre-arranged combination, then your holiday is protected under law and you will receive some form of recompense should things go wrong.
One thing to be aware of when booking a package deal is that some companies will split the invoice so that your flight and hotel is paid for separately and this will leave you without protection.
In addition, companies that offer just one element of a holiday, for example a budget airline company offering cheap flights, are not protected and nor are you protected if you book a hotel and flight through a budget airline as they are not covered by the bonding laws.
The best way to protect your money in this instance is to book your holiday on a credit card.
This means that you are automatically covered under the terms of your credit card agreement and your card issuer will refund any losses provided the credit card transaction bears the name of the company you have booked with.
Also be mindful that many companies charge a fee for credit card bookings and, whilst this makes paying on a debit card seem like the better option, debit cards do not offer any of the protection that credit cards do.
Another idea could be to book your flights with an airline credit card. These are, essentially, everyday credit cards with all the same terms and conditions, but offer such incentives as air miles or companion vouchers.
One thing is clear though, no matter where you’re travelling or who you’re travelling with, the credit card route is the safest way to go!
Article written by Les Roberts money writer for Moneysupermarket.com, the UK’s largest independent price comparison site.