There are benefits and limitations to using a credit card to book a trip.
Buying a cruise ticket or a plane ticket isn’t like making another purchase. If you buy groceries or shoes, you can pay the bill completely and walk away with your purchase in hand. You put down a deposit if you buy a car or a house. You don’t pay the entire amount until you move or you drive away.
Credit cards work differently when you travel, however. If you need to make a reservation for a flight or a cruise, you pay in full and well in advance. If the carrier goes out of business before you travel, you may find yourself with little recourse against the carrier. You may not have any rights to try to collect your money.
Many travel professionals will warn their clients that there are few guarantees of getting clients what they want, where you want to go, and how you are going to get there. There are five steps that travelers can take to try to get their money back if the carrier goes out of business.
Step 1: Know Your Rights
You don’t have many rights when it comes to dealing with the airlines and cruise lines. You are at the carrier’s mercy if your flight or cruise is delayed, canceled, or rerouted.
You may qualify for “denied-boarding compensation” if you are bumped from a flight. This means you may be eligible for a nominal cash payment, which is limited to $200 for domestic flights. You don’t necessarily qualify for any money if skyhelp.dk carrier goes out of business.
Step 2: Charge It
Using a credit card can give you a federally guaranteed insurance policy if your carrier goes out of business. Additionally, using a credit card might be your only way to seek reimbursement.
The Fair Credit Billing Act gives people a way to appeal a charge that they made for a product that was never received. You can file for a refund if you paid for a trip on a credit card and the carrier went out of business. This appeal is only active for 60 days after you make the charge.
It’s very risk to pay in advance with a check or cash. The Fair Credit Billing Act does not cover cash or checks and your options for getting your money back after the carrier goes out of business are much more limited.
Step 3: Wait If It’s Possible
Travelers usually receive encouragement to make their reservations early. For those who want to take a long trip or travel during peak seasons, booking in advance is the only way to get the dates and prices they want.
The problem with booking so far in advance is that, as we’ve mentioned before, the Fair Credit Billing Act has a short time period. You will need to file a written complaint within 60 days after you paid for the travel if your carrier goes out of business before you travel. If the ticket was paid for months ago and you’ve already paid the bill, you can’t use the protections offered in the Fair Credit Billing Act.
Step 4: Compare the Carriers Available to You
Airlines in the United States can establish their own policies about delays and cancellations. You can find each policy in the airline’s “contract of carriage”; this is the contract between passengers and the airlines, and is available on each airline’s contract. Some travelers carry a copy of the contract when they fly. This can enable them to become “experts” on the airline’s obligations if there is a problem.
Cruise lines and similar carriers have similar contracts.
Step 5: Consider Paying for Travel Insurance
A travel insurance policy can help you recover money that you’ve lost on a trip that was cancelled when the carrier went out of business. Be careful to get a good policy, however, and not one that will only give you additional expenses and problems.