Paying for holiday?

James50

What is the best way to pay for a holiday?

I am going on holiday and need to pay £3500 by 1st July.

Which I have in a Santander 123 account earning 3% interest.

If I pay by credit card I am charged 2% extra but nothing if I pay by debit card.

I am not concerned about credit card protection as I paid the deposit using my Nationwide Select Credit Card.

Is there any way I can get cash back or delay paying for the holiday by juggling credit or debit cards or should I just pay the £3500 on 1st July?

Eco_Miser

If you pay by credit card you are charged £70, and delay paying for 1 month, which saves you losing about £9 in credit interest - a net loss of £61 - pay by debit card on or before the due date - or get a 0% for purchases credit card.

Ballard

I always pay by debit card in this circumstance but...

A credit card will incur £70 additional fee. You could try to get a 0% purchases card and pay in off in maybe 12 or 18 months if you like. Presuming that you earn 3% on the £3,500 then that'd pay you roughly £105 before tax for a year. You might find a card with other benefits too (Airmiles or Tesco clubcard points for example).

molerat

Keep it in the 123 until the last minute and pay by debit card. The one off cost with the CC will be £70 and, unless you can stooze that amount at 0% for a considerable time, it will earn a maximum of around £13 net in the 123 whilst waiting for the CC bill.

unimaginative_user_name

You could open a TSB current account - the one which pays 5% on balances up to £2000 - right away and this would earn you a bit of interest between now and July (just over £7 a month net). You would need to pay £500 a month in but you can then pay it back out again into your Santander all via standing order. Then just before you travel you could make sure that the full £3500 is in the TSB and pay for the holiday using your TSB debit card which would earn you cashback of 5%. If you pay for the whole holiday by credit card you would end up paying an extra £70 just to delay payment until the next month's statement. Leaving it in your Santander would generate much less interest than the extra it would cost to pay by credit card.

Ballard

unimaginative_user_name wrote: »

You could open a TSB current account - the one which pays 5% on balances up to £2000 - right away and this would earn you a bit of interest between now and July (just over £7 a month net). You would need to pay £500 a month in but you can then pay it back out again into your Santander all via standing order. Then just before you travel you could make sure that the full £3500 is in the TSB and pay for the holiday using your TSB debit card which would earn you cashback of 5%. If you pay for the whole holiday by credit card you would end up paying an extra £70 just to delay payment until the next month's statement. Leaving it in your Santander would generate much less interest than the extra it would cost to pay by credit card.

I rather think that you've got a little confused. TSB pay 5% on contactless debit card transactions for the first £100 worth of transactions each month. It would therefore not cover this transaction.