a beach with palm trees and blue water

Lots of good things are happening these days: hotels are modernizing, airfare prices are dropping, and the cabins you experience above the clouds are more luxurious than ever. That special vacation is more within your reach than it’s ever been, but that still doesn’t make paying for it any more fun.

Even if you’ve got plenty of dough in hand, it can actually make serious sense to take advantage of a holiday booking strategy which allows you to pay over time, without interest, not just for how effect it has on your wallet, but for a few hidden benefits too. Here’s the full story…

a room with a bed and a windowAirlines Want It All

It’s true, airlines are desperate not just to sell you your flight, but your hotel, or car rental too. They want to be your one stop shop, so to entice business, airlines offer “low deposit” bookings if – and only if – you add a car rental or hotel to the flights.

In many cases, you can pay over time without any interest, as you like – and you actually should. That does not ever mean carrying a balance on your credit card – this is totally different. Keep reading.

Airlines that allow this include: British Airways and Virgin Atlantic.

Quite a few other airlines including Delta and American offer something similar, but those require a credit check or verification through a third party finance company, whereas British Airways Holidays and Virgin Holidays simply allow you to pay a deposit, and demand that the remaining balance be paid by a certain date in the future. It goes like this…

  • find trip, select flights, select car rental or hotel.
  • pay low deposit to secure booking with airline.
  • you then can pay the rest of the balance as you wish, spread things out.

The other airlines are still great options, just more faff with the forms and credit checks.

a bed in a planeHidden Holiday Booking Benefits

The money part isn’t all that hard to figure out, and that’ll be discussed shortly, but it’s the hidden benefits and flexibility that make travel package deals seriously clever. Think of it like a small investment in a trip you may or may not take. In short: you don’t lose everything if you have to bail.

With deposits as low as $300 for a holiday, and most around the $600 mark, even for multi $1000 trips in business class and five star hotels, you’re almost effectively creating yourself a flexible travel booking, even though it’s not technically flexible.

In other words, if you need to bail, you’ve only shelled out a few hundred on the deposit, rather than stuck with completely inflexible airline tickets which would leave you out thousands, had you just booked flights alone. It’s a compelling hook.

You can even remove a passenger, if someone else has to bail.

Example: two discount business class tickets from New York to London may cost $1300 each, but the key is that they are not flexible. You either can’t change dates, or the price to do so would make them triple. If you can’t use them as intended, you’re eating at least $2600.

But if you booked them while adding a hotel or car rental via one of these holiday packages, with just a $300 deposit, you’d give yourself weeks, even months more flexibility until you need to cough up the rest, with only a penalty of forfeiting the deposit, should you need to bail.

Obviously, you don’t want to bail – but “it happens” as Forrest Gump once said.

a snow covered trees and a lake in a cityDifferent Fare Inventory

This is a bit nerdy for some, but if you’ve ever been convinced that the browser or airline is messing with you when the price jumps, that’s a myth. It’s just that even in one cabin, there are often 10 fare classes which decide the price, and each has limits to how many are sold.

With many airlines, holiday packages are able to tap into low fares which might not appear for flight only bookings, particularly for last minute trips. It’s not at all uncommon to see $500 all in trips with flights and three nights hotel, on the same dates when flights alone would be $900 per person at the last minute.

The best advice here is that if you ever find yourself facing horribly expensive flights, look at one of the package booking sites like Expedia, or an airline which offers them to see if prices change.

a group of currency bills and coinsAnd The Money Stuff Is Practical

Even if you’re rolling in dough, shelling out thousands on a single booking can make a heavier dent than you’d usually put into any of your metal rewards credit cards. These plans allow you to pay monthly, or in the case of Virgin Atlantic or British Airways, as much as you want whenever you want, up to five weeks before the booking.

You could throw a bit on one card to help trigger a spending bonus, throw a bit on another, wait for a payday, etc – the only rule is that it’s all square by the date they give you, which will be weeks before the trip.

In most cases with airlines – and all cases with BA or Virgin – there’s no penalty if you cancel, you just lose whatever the minimum deposit was.

It’s never, ever advisable to book things you can’t pay for, and you should never ever carry credit card debt or interest, and in a way – these make that easier, since you aren’t absorbing a massive purchase overnight. Even a $5000 trip can be booked $100 at a time…

Gilbert Ott

Gilbert Ott is an ever curious traveler and one of the world's leading travel experts. His adventures take him all over the globe, often spanning over 200,000 miles a year and his travel exploits are regularly...

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  1. I often use this packages and take the car rental when i book my BA tickets to LCA. It takes the price down and gives more Avios plus it books economy tickets at a higher category giving you luggage allowance rather than just hand luggage.
    But there is a big minus. The tickets are uandled by BA Holidays and not BA directly
    This means that you cannot upgrade eith avios or cash or change ticket dates etc online on ba.com. You need to call them. Plus you do not get the ba.com offer alerts for upgrading for cash A few days before the flight, like you do with ticket only bookings (perhaps this one is a coincidence though? But i m guessing not)

    1. I’d just say, for clarity of anyone reading… you still can upgrade – you just have to call. BA.com rarely works for processing upgrades anyway, so I really don’t consider this much of a loss.

    1. You clearly don’t understand any of the concepts raised. No one is talking about carrying a balance on a credit card. That would be terrible advice. We’re talking about making a booking with an airline, where the balance isn’t due up front, which gives you 1) flexibility to cancel since you just forfeit the deposit 2) the ability to pay in smaller amounts, which keeps finances easier. Please read the articles before commenting.

      1. I clearly understand everything you said, and remain appalled. You are advocating borrowing money to finance vacations, whatever the interest rate. I have enjoyed your blog up to this point. I was horrified this time however.

        1. I’m sorry Steve but it seems you have not understood what has been written, or even researched to validate what the article states.
          I have used this method twice last year to book two trips with BA to the US this year (Jan & Mar) (appreciate this article is probably written for the US->UK but similar approach)
          Not only was the fare cheaper (allowing a connection from MAN), it has meant I could pay a small deposit £3-400, and pay the remainder over a few months….so rather than a huge sum all in a short time for 2 trips, I’ve been able to pay both off in time with monthly payments. I’ve not financed anything….just spread the cost over time and used this benefit to get BA Amex bonus Avios in the mix as well (still able to pay off fully each month)
          The other benefit of doing this from the UK is you get full ATOL protection should anything go wrong.

  2. Another benefit of BA Holidays is cheaper flights can book into higher fare buckets than if you have bought them alone. On a super cheap NCL-LHR-PDX plus car holiday the domestic flights are in J instead of the cheapest I bucket, and the return PDX-LHR is in D. A nice haul of extra Avios on top of the 10 day SUV rental being very little more than the flights alone and the flexibility to pay/bail.

  3. Where do you get this to work for Virgin? Their flight+car bookings are always extortionate compared to flight only, whether on the Virgin Atlantic or Virgin Holidays site.
    BA on the other hand is great. The main advantage is a free full luggage allowance, plus ATOL protection.
    With BA it doesn’t even need to be a package – just add a single night in a hotel on, which may not even be related to the flights, or a couple of car hires somewhere, and you’ve got yourself a package.

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