Generation gap in credit card spending know-how

British pensioners are the most knowledgeable age group when it comes to using their flexible friend abroad, according to a study, commissioned by Gocompare.com.
 
Half (51%) of those aged 65 plus who have ever been on holiday abroad said they usually bought their holiday using a credit card, compared to less than 1 in 4 (23%) 18 to 24 year olds.
 
And, it seems, the older generation could be right when it comes to paying for their holiday with plastic, as they will be covered by the Consumer Credit Act, provided that they spend between £100 and £30,000. This act protects travellers if they buy their holiday on a credit card, because, if something goes wrong, the credit card provider will be as liable as the retailer to refund the credit card holder. However, this may not apply to a holiday bought though a travel agent which is ATOL protected.
 
This could be particularly helpful if holidaymakers are arranging a DIY trip, booking flights and accommodation direct and separately, or if they are going on a break that is not ATOL protected.
 
Our more senior citizens also seem to know how to use their cards to get the most, and pay the least. For instance, 40% of over 65s said they don't use a cashpoint abroad - avoiding withdrawal charges, and 87% of people in this age group also paid off their credit card bills within a month of returning home.
 
Surprisingly nearly a third (30%) of 18 to 24 year olds believe that there are no fees or charges for using their credit cards abroad. Again, the older generation could teach them a thing or two, with 61% of the over 65s knowing what charges and interest rates they would be paying when using their plastic abroad.
 
Gocompare.com's credit card expert Matt Sanders said: "It seems that when it comes to credit card use, age really does bring wisdom. The over 65s are the age group who are using their plastic sensibly while on holiday,  securing added protection when booking and when spending abroad.
 
"If you're planning on using a credit card abroad, it's important to know what you'll be charged for and where. Withdrawing cash is usually the most expensive way to pay when you're abroad and it won't give you the additional protection that paying by plastic does. Try to avoid ATMs and use cards for purchases in restaurants, with tour operators and at attractions.
 
"The golden rule of using your plastic on holiday is to always repay your balance by direct debit to help reduce any potential interest accrued by your holiday purchases.
 
 "If you do need cash, exchange it in the UK before you travel, and look for a provider that offers a competitive exchange rate and doesn't charge you commission. Give yourself time to shop around for the best exchange rate possible, as feeling short changed is an easy way to turn a holiday of a lifetime into one you'd rather forget."
 
Here are some of Matt's tips for credit card holiday spending:

ATM/foreign transaction fees - these can reach up to 3% for every £100 withdrawn, so make sure you take these into account before heading to the cashpoint.

Cash withdrawal interest - some cards will have 0% balance transfer or 0% purchase rates, but this rate does not apply when you withdraw cash. This rate can often be anything from 11% APR or even higher and is calculated from the time you withdraw the cash. Also be aware that the 0% rates are for a limited period only and will revert back to the normal APR after a certain time, so make sure you know when you're interest free period is up. Always check the terms and conditions of your card so you know what you are being charged for and when.

Conversions - some cashpoints and retailers may give the option to convert your transaction to sterling on the spot. You should always ask for bills in the local currency to get the best conversion rate.