Many Brits extend credit to take a break
If you are planning to take a break in the sun this summer and finance your trip it by borrowing, then you are not alone, according to the latest research carried out by comparison website MoneyExpert.com.
This year, almost one in five UK adults will pay for their holiday abroad by getting into debt. Even 63% of those who are saving for their break will put the cost of their holiday on a credit card and a further nine per cent will take out an unsecured loan. Sean Garner, chief executive of the website that compiled the research offered an explanation:
"Next to Christmas, summer holidays are when we spend most, so with family budgets being squeezed, millions of us turn to borrowing. Holidays should be a time to relax and recharge the batteries, and it's also a good time to think about sorting out finances."
So, although you might have incurred debt getting to your holiday destination, once you are sunning yourself by the pool you will have time to consider your financial options when you return. With an average annual summer holiday spend of 1500 just to keep the kids happy, it is easy to see how a family with children could quickly run up a large amount of debt over the summer, especially if incurring the extra cost of flying off to the sun.
Just a word of warning if you intend to take your credit card abroad to finance your holiday spending: ensure that you check the fees that you will be paying. According to the Uswitch website Britons incurred a staggering 560 million last year in credit card charges for the privilege of using their cards abroad. With fees applied for cash withdrawals and interest charged from the day the cash is withdrawn, they soon mount up. Even if you have used your credit card to pay for your holiday, think carefully about taking it abroad and using it for spending money or the fees and your debt could spiral.
So once you've returned and want to sort out your finances, what options are open to you? Many homeowners with plenty of equity and who could comfortably afford to repay any extra borrowing may wish to consider extending their mortgage. But the majority of non-homeowners may have no option but to take out a personal unsecured loan, or to keep the balance on their credit card. If the latter is the case then they could consider switching their balance to an interest-free deal. But before you commit to any new deal remember to do your research for online loans and credit card deals to find out which offer the best bargains.
This year, almost one in five UK adults will pay for their holiday abroad by getting into debt. Even 63% of those who are saving for their break will put the cost of their holiday on a credit card and a further nine per cent will take out an unsecured loan. Sean Garner, chief executive of the website that compiled the research offered an explanation:
"Next to Christmas, summer holidays are when we spend most, so with family budgets being squeezed, millions of us turn to borrowing. Holidays should be a time to relax and recharge the batteries, and it's also a good time to think about sorting out finances."
So, although you might have incurred debt getting to your holiday destination, once you are sunning yourself by the pool you will have time to consider your financial options when you return. With an average annual summer holiday spend of 1500 just to keep the kids happy, it is easy to see how a family with children could quickly run up a large amount of debt over the summer, especially if incurring the extra cost of flying off to the sun.
Just a word of warning if you intend to take your credit card abroad to finance your holiday spending: ensure that you check the fees that you will be paying. According to the Uswitch website Britons incurred a staggering 560 million last year in credit card charges for the privilege of using their cards abroad. With fees applied for cash withdrawals and interest charged from the day the cash is withdrawn, they soon mount up. Even if you have used your credit card to pay for your holiday, think carefully about taking it abroad and using it for spending money or the fees and your debt could spiral.
So once you've returned and want to sort out your finances, what options are open to you? Many homeowners with plenty of equity and who could comfortably afford to repay any extra borrowing may wish to consider extending their mortgage. But the majority of non-homeowners may have no option but to take out a personal unsecured loan, or to keep the balance on their credit card. If the latter is the case then they could consider switching their balance to an interest-free deal. But before you commit to any new deal remember to do your research for online loans and credit card deals to find out which offer the best bargains.