Lay-by your next holiday
You can buy a pair of jeans, a designer watch, and even a flat-screen TV on lay-by. In fact, there are not many large purchases you can't put on a payment plan these days.
But travel remains an exception. Lay-by schemes are still a rarity in the holiday industry, which typically requires that payments be made in two parts; a deposit and then the balance. But a handful of companies are breaking the mould and offering more flexible payment options to clients.
It's a growing trend since the recent economic downturn as Australians tighten their belts and reconsidering holiday plans, according to a spokesman for Australia New Zealand Travel.
"We've had people cancel holidays in India," he said, "only to rebook into Port Douglas and Hamilton Island, places like that."
The benefits of "lay-by" holidays, he claims, are self-evident: "It's obviously easier to do this than pay off your credit card with 18 to 19 percent interest. What you save on interest alone you could spend on better restaurants while you're away".
Worldwide Holidays is a prime example of a travel company offering lay-by holidays. Earlier this year the travel company added a new lay-by scheme with weekly or monthly payments.
At the time, Worldwide Holiday's director, Dipak Kumar, told Fairfax that customers had shown an interest in the lay-by option, which is available only for bookings that cost $1200 or more, which rules out the average weekend away.
There are no fees charged for the payment plan, with the price quoted on the website the total amount to be paid, he said.
"The popularity of lay-by has been mainly [among] families with kids," he said. "A lot of families struggle with finances and this gives them the chance to have a holiday without the stress of maxing out their credit card."
Even larger firms, such as Intrepid Travel, are seeing the benefit of such schemes. Intrepid collects a deposit and then allows passengers to pay the rest in any instalments they choose, so long as the balance is paid in full 60 days ahead of the trip.
At the time of launching payment plans, then-Intrepid spokeswoman Meg Koffel said: "Travel is a tonic for these tough times. We're looking at a number of ideas to ensure people can continue to get away on holiday".
As with all deals that look too good to be true, however, it pays to be cautious when it comes to payment-plan holidays. Be sure to check the company's website for testimonials, terms and conditions and hidden costs.
Can't afford to wait?
With Christmas just a few weeks away, saving for a holiday may not be an option for many families. For those there's the credit card option to consider, of course. But it may be difficult to imagine a worse way to fund an entire holiday, than by plastic. Returning home, the relaxing effects of your trip quickly dissipate when your credit card bill arrives in the post.
It's this sentiment that has forced credit card providers to lift their game and find new ways to add value to their offerings, said Michelle Hutchison, spokeswoman for RateCity.
"In the past, rewards credit cards have offered benefits such as free flights and free merchandise. But the trade-off was often high rates of interest and cardholders would have to spend tens of thousands of dollars to see any real reward," she said.
"Today, credit card providers are facing tougher times and working harder at attracting and retaining their customers."
Some of the lower-rate cards now offer "premium card facilities", including travel insurance, VIP seating and concierge services to name a few.
So if you're paying an annual fee of around $100, then you should demand a few perks, said Hutchison.
"If your low-rate card doesn't give you access to premium facilities, think about comparing credit cards and switching for a better deal. Because it could mean you get that holiday you've been dreaming of sooner!"
Make sure you read the fine print – the terms and offers of the services can vary significantly between cards.
Be careful with your credit card this Christmas
Tips for trimming your household budget
Low Rate Cards