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Eyjafjallajokull may be difficult to pronounce, but it’s a name that millions of travellers will never forget – not only because the volcano’s clouds of ash grounded them in April and May but because their finances may take a long time to recover from the experience.
Almost everyone who was stuck abroad has had to pay at least some unexpected costs. People on package holidays can reclaim basic living expenses but others – with and without travel insurance – may never be repaid.
And those who maxed out their credit cards in order to survive may have harmed their credit status for years.
Here’s how to minimise the financial damage if a common holiday disaster strikes you.
Disaster 1: You’re stranded
The Icelandic eruptions could continue for more than a year, according to vulcanologists, so the ash clouds could return any day. Bankrupt airlines and collapsed travel companies are other dangers that can leave you stranded.
If you’ve spent your entire credit limit while you wait, call your card issuer and explain the circumstances. They may be able to help with an emergency extension of your spending limit. Don’t blow this on treats – you’ll have to repay it later.
If you know you can’t pay back everything you’ve had to spend immediately, talk to your issuer when you get home and see if they’ll reschedule your debt so it becomes more affordable.
Whatever you do, don’t ignore it or skip a repayment. It will be recorded on your credit report for at least three years and your credit rating could suffer. You could also ask to add a note explaining the sudden increase in what you owe – it may help to persuade future lenders that you aren’t a careless spendthrift.
Disaster 2: Your wallet is lost or stolen
It was there when you bought ice creams but when you went to pay for a round of drinks later, your wallet – and your cash, cards and other personal bits and pieces – has vanished.
Your first move is to call your bank and card issuers to warn them – if you don’t, you could be liable for any losses. You did copy out all the emergency numbers for your bank and cards and keep them somewhere safe, didn’t you?
Cancel the cards and ask for replacements and see if the bank can send some emergency cash to a local bank or bureau de change. Your holiday rep, hotel or the British consul may be able to help if you’re having problems.
When you get back, go through your bank and card statements carefully to see if anyone has accessed your money. You should also check your credit report, especially if personal details such as your full address, date of birth and account numbers were lost along with your money, as your identity may have been stolen along with your cash.
Your credit report lists your credit accounts, from your mobile phone airtime agreement to your mortgage, along with new applications and your repayment record.
That makes it easy for you to see if an identity fraudster has tried to clear out your accounts or open new ones in your name. If you spot anything suspicious, contact the relevant lender at once to explain your circumstances.
And keep on checking regularly – some professional gangs lull you into a false sense of security by waiting months before trying to rip you off.
Disaster 3: Your card won’t work
Plastic is such an easy way to pay when you’re travelling that many of us would be lost without it. But some card issuers may be suspicious that your card is stolen if they suddenly see transactions from another country and block your card to protect you from fraud – so always call to warn them that you’ll be in a specific country or countries before you leave.
Other explanations for a rejected transaction range from the simple – the lines into the international system that authorises transactions might be busy – to the more sinister. If you know you haven’t overspent and you’re told there are no funds, try to remember if your card has been out of your sight, perhaps in a bar or restaurant. In that case, it could have been cloned and used online or in a cash machine to clear you out.
Again, you should call your card issuer immediately if your card is rejected, explain your circumstances and ask them what’s gone wrong.
They may be able to unblock it or, if you are a victim of fraud, cancel the card and issue you with a new one. Unless you’ve done something silly, like giving your PIN to a friend and lending them the card, you’re unlikely to be held responsible for any losses.
When you get home, check your statement carefully and flag up any unfamiliar transactions. You should also monitor your credit report, in case your card data has been used to open a new account – it’s free to see your Experian credit report with a 30-day trial of CreditExpert.
Ask to add a note to your report explaining what’s happened while things are sorted out, or your credit status could suffer until the record has been set straight.
And next time, take some spare cash or a second card – perhaps a prepaid one that means you can’t overshoot your budget – and keep it as an emergency stash.
