Better Protected: Credit Card or Direct Debit

billykeats

Looking to book a holiday for next year and with TUI there a number of payment options of which there are two in particular we are looking at depending on the protection.

The first one is credit card - if we were to pay the deposit of £50 per person, which for 4 people would be £200; with a credit card we would be protected by 'section 75' of the Consumer Credit Act. This is our usual preferred option as we pay two deposits and make final payment 12 weeks before holiday.

The second option is Direct Debit - we pay no deposit but then have a direct debit of a fixed amount coming out every month until 12 weeks before departure. This appeals to us as it is like 0% credit card/loan available without any credit checks.

Our issue is, if we do the second option how much protection do we have against the holiday, if anything was to happen; as 'section 75' won't apply. Of course TUI is ATOL/ABTA protected but want that extra layer of protection.

TIA

SiliconChip

Option 2 will offer you no protection at all (well, you'll have the DD Guarantee, but it's unlikely that any claim using this would be successful in the long run). Why can't you pay the deposit by CC and the remainder of the cost by DD?

Alan_Bowen

TUI and others have been plagued by customers attempting to make chargeback claims when they want to cancel a holiday or complain that the holiday did not reach the standard expected. With DD there is no protection at all and it also means they avoid paying the cost of accepting credit and debit cards which banks continue to increase. For that reason, I believe they will not accept a deposit by CC if you want to use the DD scheme, as it would defeat the purpose.

You should also realise that DD schemes usually mean you have paid a lot more than just the deposit in advance of the date when the final balance is due which is normally only 8-10 weeks before departure. In other words, they get hold of your money sooner than normal, a win-win for them, less so for you!

CKhalvashi

Alan_Bowen said:

TUI and others have been plagued by customers attempting to make chargeback claims when they want to cancel a holiday or complain that the holiday did not reach the standard expected. With DD there is no protection at all and it also means they avoid paying the cost of accepting credit and debit cards which banks continue to increase. For that reason, I believe they will not accept a deposit by CC if you want to use the DD scheme, as it would defeat the purpose.

You should also realise that DD schemes usually mean you have paid a lot more than just the deposit in advance of the date when the final balance is due which is normally only 8-10 weeks before departure. In other words, they get hold of your money sooner than normal, a win-win for them, less so for you!

It seems reasonable to me to accept a CC for the deposit and then DD after. Ditto on the protections, but S75 is not Chargeback and would come specifically for when services are not required; for S75 if you have a dispute with the retailer, you also have a dispute with the bank. How the bank goes about getting their refund is their choice.

The money needs to be held in a designated account and cannot be used freely (in the case of packages, flights and LTAs) until after the holiday has taken place.

NoodleDoodleMan

"Our issue is, if we do the second option how much protection do we have against the holiday, if anything was to happen.."

What do you mean by if anything was to happen here ?

For example, If TUI cancel you are entitled to a full refund.

Alan_Bowen

In practical terms, since TUI is the second largest operator in the UK (but then so was Thomas Cook when it failed) it is fully protected financially by the ATOL licence which it holds. The CAA who run the scheme is backed by the government, so you really can't get better than that, unless the government are liars of course....

christianick

I would choose the second option since I trust TUI very much, I book all my holidays with them

eDicky

billykeats said:

 want that extra layer of protection.

For what possible circumstances do you feel this need..?