Holidaymakers looking to travel abroad this year will likely have had a far more stressful, and expensive, trip than normal. Trying to avoid amber and red list destinations, as well as having to pay out for Covid tests and, for some, expensive quarantine hotels have radically changed the holiday season this summer.
Even those who are delaying their next overseas trip to 2022 may find that prices increase as the travel industry tries to recoup some of its losses during the pandemic. As a result, keeping the cost down on foreign holidays is likely to become more important for the foreseeable future.
One way consumers can help to reduce their travel costs is by using a debit or credit card that does not charge a fee when used overseas as foreign usage fees can quickly mount up when the card is used frequently on holiday. For example, a typical debit card charges £11.88* when consumers withdraw £250 in cash abroad, while some credit cards can charge £14.95** before interest is applied.
Meanwhile, those using a debit card to make purchases may find that spending just £50 results in a charge of £1.38* and a credit card can charge £1.50** on a £50 purchase.
Clearly, holidaymakers should be aware of the charges or fees they will incur when using their cards abroad and switching to a bank account or taking out a credit card that charges less when used abroad to help reduce costs.
“Switching a bank account is simple and using the Current Account Switcher Service, customers can move their account within seven working days,” explained Rachel Springall, finance expert at Moneyfacts.co.uk. “If consumers plan to travel more frequently in the months to come, either for work or leisure, choosing a current account that will not charge for using their debit card abroad could be a wise choice. Starling Bank, Metro Bank and Virgin Money all offer fee-free current accounts which do not charge in Europe for using a debit card, either for a cash withdrawal or retail transaction. However, a typical debit card charges £11.88 when consumers withdraw £250 in cash abroad and £1.38 for an in-store purchase of £50.
“Consumers may prefer to use a credit card for spending abroad, which is understandable as they can easily be cancelled if lost or stolen and spenders are protected under Section 75 of the Consumer Credit Act on purchases between £100 and £30,000 if a service or goods are not provided or damaged. Carrying around cash might be convenient, but it is clear to see how quickly a holiday can become a disaster should someone’s hard-earned cash be lost or stolen and getting cash last minute at an airport is unwise due to poorer exchange rates.
“Holidaymakers may be concerned about the cost of their trip as it is expected to rise. Saving money on card usage fees is, therefore, a sensible thing to do and consumers can easily do this by bringing along a cost-effective credit or debit card or even consider a prepaid card. Planning an itinerary on what to do whilst abroad may be routine but so should be setting a budget in light of how the Coronavirus pandemic has impacted the cost of a holiday.”
