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The dos and don’ts of holiday spending

The dos and don’ts of holiday spending

Category: Credit cards

Updated: 01/06/2010
First Published: 01/06/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

With England having completed their friendly matches and the final World Cup squad soon to be announced, the summer is almost here.

Whether you are heading for South Africa or not, many people will be planning to take their summer holiday in the coming months.

While arranging your spending money may not be the highlight of any holiday, a small amount of time and effort could see you making significant cost savings.

Using your credit cards and debit cards abroad may be the easiest and most convenient way for many, but costs can soon mount up if you're not careful.

Michelle Slade, spokesperson for, gives you the lowdown on spending abroad.

Travel money

"Changing your currency at the airport may seem convenient, but you will be paying for the privilege through unfavourable exchange rates.

"Money can be exchanged once overseas, but lack of local knowledge may mean settling for uncompetitive rates of exchange. If your trip takes you off the beaten track, your options may be further restricted.

"Shopping around before you go will leave you more in control of getting the best rate.

"Commission free doesn't necessarily mean the best deal. The commission fee is likely to have been loaded into the rate."

Credit cards

"Credit cards will levy a foreign usage charge of up too 2.99% for both purchases and cash transactions. Charges are applied each time the card is used and can soon add up.

"Taking money out on your credit card is never advisable even in the UK. Interest rates on cash withdrawals are charged at a higher rate than purchases and a cash handling fee, typically 3.00%, with a minimum of £3, is applied.

"The Post Office, Saga and Santander Zero credit card make no additional charges for using you card overseas, while Nationwide BS makes no charge in Europe.

"It is worth taking a credit card in case of emergencies. The recent volcanic ash situation has shown you never know what may happen and you could be stuck abroad for extended periods."

Debit cards

"In the UK we are so used to free banking that many people assume things will be the same when they go overseas.

"This can be a costly mistake as charges are applied both for taking money out of a cash machine and for making purchases in store.

"Customers taking out cash need to be aware of minimum charges. If you withdraw lots of small amounts you will be hardest hit, so it may be worth planning your financial requirements a few days ahead.

"Nationwide BS remains the cheapest provider for debit card transactions with no charges applied in Europe and just a 1.00% charge made elsewhere.

"With everyone concentrating on enjoying themselves rather than on what they are spending, overseas charges can soon mount up. When holidaymakers get home they could find a nasty surprise when their monthly statements arrive."

Make sure you're ready for your travels:

Compare the best foreign usage credit cards

Compare Travel Insurance quotes

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.