What’s the Smart Way To Pay for a Holiday?

The best travel deals don’t wait.

So if you see a great deal or you need to book a flight ASAP and you don’t have the cash on hand, what are the Smart Ways (and the Dumb Ways) to pay for it?

We’ve looked at the options from Cash to Debit cards, Buy Now Pay Later, Credit Cards and Payday Loans.

Below you can see what the cost of each option is for a $1500 holiday, and what the worst case scenario is after a year if you incur the maximum amount of fees and/or interest.

A couple laughing as they travel on holiday

NUMBER-CRUNCH: SMART WAYS TO PAY FOR A $1500 HOLIDAY

WAYS TO PAYVERDICTBEST CASE*WORST CASE*HOW IT WORKS
CASH
$AUD
SMART$1,500N/A
DEBIT CARD
Visa or Mastercard
SMART$1,508$1,5080.5% merchant fee
BUY NOW PAY LATER
Afterpay
SMART$1,500$1,5684 fortnightly instalments, late fees of $10-17
BUY NOW PAY LATER
Humm
SMART$1,516$1,6005-10 instalments, monthly fee up to $8, late fee $6
BUY NOW PAY LATER
Zip Money
SMART, BUT ONLY IF YOU PAY IT OFF IN THE INTEREST-FREE PERIOD$1,537$2,007Est fee $0-$99 + $6/mth fee + $15 late fee + 19.9% after 3-36mth interest free period
CREDIT CARD
Low-rate card
OK$1,555$1,67110% p.a. interest + 2% merchant fee
CREDIT CARD
Standard card
DUMB$1,580$1,82520% p.a. interest + 2% merchant fee
PAYDAY LOAN
Nimble
DUMB$1,920$2,52020% of the purchase + 4% a mth

* ‘Best case’ is the cost to you if the holiday is paid off after 2 months. ‘Worst case’ is the total cost if the holiday is still not paid off after 12 months, and you’ve incurred the maximum amount of fees and/or interest. Note that I have not included the annual credit card fee in the ‘worst case’ cost for credit cards.

HOW DO YOU FIND THE BEST FLIGHT & ACCOMMODATION DEALS?

Tune into regular airline sales & subscribe to their newsletter alerts:

The advantage of booking direct with an airline is that there’s no booking fee and if something goes wrong – say you miss a flight or you need to make a change – it can be much more difficult dealing with a third party site than dealing direct with the airline.

Most airlines have regular sales events, although they’ve been interrupted by the pandemic in 2020. Check out their pages below and subscribe for email alerts about new sales:

Check bargain forums & price comparison websites (and subscribe to them):

Keep an eye out for sales via online bargain-hunting forums and price comparison websites. Here are some of the best:

✈️ Ozbargain Travel
Australia’s biggest online forum for bargain hunters. Has a ‘Travel’ section where members or businesses post their best deals and readers vote them up or down. This is a deals forum, NOT a travel search site where you can put in your destinations and dates and compare.

✈️Google Flights
Good place to begin your flight searches. If you type ‘Sydney to Melbourne January 10’ into Google, you’ll get the Google Flights results and then the other flight search sites below (eg Skyscanner, Expedia, Momondo etc).

If you don’t know exactly where you’re going yet, search ‘[origin] to [everywhere/continent/country]’, where you can also view all prices and destinations on a map.  You can also click ‘Track Prices” to get notifications by email of any new low prices. track prices

👉 PRO TIP: SEARCH OUT OF CHEAPER HUBS
If you live in an expensive hub, such as Sydney, and you want to fly to Europe, for example, search [Sydney] to [Asia] and find the cheapest flight to a cheaper hub such as Singapore/Malaysia. Then search in another window from that hub to Europe. This can produce cheaper results than doing all your searches out of the more expensive hub.

✈️ Skyscanner
Also searches hundreds of online travel sites to find the cheapest flights, hotels or car hire. Has a dedicated deals section. If you’re not sure where you want to go yet, choose ‘everywhere’ as your destination and see your options. Categorizes flights by “best,” “cheapest,” and “fastest” to help you zero in on what’s important. No booking fee, but once you find the flight you want on here, you can go direct to that airline’s website to check you’re getting the cheapest price. Also has a ‘flexible fares only’ button for COVID-19 times. 

✈️ Momondo
Searches some budget airlines and third-party sites that other search engines don’t. Categorizes flights by “best,” “cheapest,” and “fastest” to help you zero in on what’s important. Offers a price match guarantee IF you find something cheaper within 24 hours. NO dedicated deals section. No matter how many searches you make, Momondo guarantees that they never adjust or increase their prices based on your cookies. 

✈️ Kayak
Also searches hundreds of online travel sites to find the cheapest flights, hotels or car hire. Owned by Booking.com, the same company that owns Momondo, so it gives similar results. Has a dedicated deals section. Processes over 2 billion flight queries annually. No booking fees.  Which site is best? Well, it depends who you ask. They all have their strengths. For example, a consumer group in the UK tested the top sites and found that Momondo and Kayak were the cheapest, but Skyscanner was the most popular because it’s so easy to use. Google Flights is often considered a good place to start.

3. Fly on cheaper days:

Public holidays are usually cheaper, as are midweek days.

A good shortcut is to use Google Flights to see how the prices drop on different days of the week. Simply enter your destination and preferred dates and click “Date Grid” or “Price Graph” to see how other days compare. cheap fly

👉 PRO TIP: CLEAR YOUR COOKIES!

Not the baked, edible kind, but the digital kind that track your internet searches. Airlines and flight booking sites sometimes use these to quote you customised prices that can be higher if you’ve recently done several searches for a particular destination, for example. So clear your cookies or search in ‘incognito mode’ to make sure you’re paying bottom dollar (or use a site that promises not to do this, such as Momondo).

WHAT ABOUT COVID-19? HOW CAN YOU MAKE SURE YOU’RE NOT OUT OF POCKET?

To combat the uncertainty created by COVID-19, many travel providers have introduced new flexible booking options and free cancellation.

Most of the booking sites above will now allow you to search by ‘flexible deals’.

Here are some other examples:

PROVIDERFLEXIBLE DEALS
Booking.comSearch for accommodation, then select ‘FREE cancellation’~ from the filters on the left hand side
AirbnbSearch for properties with “flexible” cancellation policy
Virgin AustraliaUnlimited booking changes without fees until 31/1/2021
Qantas domesticBook by 31 January, 2021 & get 1 FREE change of date
EmiratesFREE insurance cover for COVID-19 health expenses and quarantine costs

Any information is general advice, it does not take into account your individual circumstances, objectives, financial situation or needs.

Check KILL BILLS for more helpful tips about saving.

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