It's the time of year when thoughts are turning to that well-earned summer break, but before you jet off, make sure your holiday finances are sorted! Leaving things too late could mean you don't get the best deals, and if you're planning to use a travel credit card – always a great option – you'll need to start the process early to ensure you get the card in time.
Travel cards can be the perfect choice for those who don't want to take huge amounts of cash abroad, and they're far better value than their UK counterparts. Regular credit cards tend to come with extortionate fees for foreign use – charges of around 3% per transaction aren't uncommon – and that's before cash withdrawal fees are taken into account. And don't even think about using debit cards abroad, unless your provider specifically offers lower fees for foreign use, as these can result in even higher charges!
Travel credit cards are different. They've been specifically designed for foreign use and typically come with no foreign usage fees whatsoever, and there are a few that don't charge you for cash withdrawals, either. You won't come back to a hefty bill, and because they won't load your card with extra exchange rate fees, you can be sure that you'll get the best deal on your currency exchange.
To really make the most of these cards, remember to pay off the balance in full as soon as you get your statement, as standard interest rates can be pretty high and could negate any benefits. It's also for this reason that you should only ever use these cards abroad, as if you want a card for domestic soil, you'll generally be able to find far better credit card deals.
Alternatively, if you don't have a suitable credit score, or if you simply want the convenience of knowing exactly where you are with your finances, prepaid travel cards could be another great option.
These allow you to load your card with spending money in the currency of your choice, helping you plan what you spend to ensure you don't go over-budget, as you're not actually borrowing money. In essence, they work like a debit card – you can only spend what you've got – but typically come with lower (or no) foreign transaction or exchange fees.
"Counting up the cost of using credit abroad can be a headache, which is why it's always a good idea to plan ahead before your trip," said Rachel Springall, finance expert at Moneyfacts. "By using a competitive credit card and making use of its advantages for overseas use, holidaymakers won't come back to a big bill of charges. Having the right type of current account can also have its advantages, as some have much lower charges when using your debit card abroad.
"Prepaid cards are also a great way of planning what you spend, as you load the card with your budget. Plus, if you lose the card it can be replaced, unlike cash, where if you lose it, it's gone forever!"
Is it time to get in on the action? Opting for specialist cards can be a great way to keep your budget in check, and can be a lot more secure than cash, too. Check out our travel card best buys to find the card that's right for you, or if prepaid cards are more your thing, we've made it even simpler by outlining the top three prepaid cards for your trip to the continent. Enjoy your holiday!
Check out the top travel credit cards
Compare prepaid credit cards
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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