As the Bank Holiday weekend draws near, many holidaymakers will be looking to use the break for a trip abroad – so now is the perfect time to revisit their financial checklist to see if they have everything organised. Whether consumers feel fully prepared for a trip away or have yet to make a start, Moneyfacts.co.uk has drawn up some top tips on how they can save a bit of cash.
"Holidaymakers might be caught up in the excitement of a trip abroad, but it would be wise for them to take some time out to ensure their money goes as far as it can for their break," said Rachel Springall, finance expert at Moneyfacts.co.uk. "Whether taking spending money or relying on a debit or credit card, it's important that consumers take the necessary steps to avoid wasting their hard-earned cash."
The first tip requires a bit of forward planning, and if you've yet to get your foreign currency sorted, now's the time to do so! "Avoid airport currency exchange kiosks, as the convenience will come at a cost," said Rachel. "Instead, even with just a few days to go, consumers would be better off checking online for current exchange rates to find the best deal. It's also worth keeping in mind that click and collect rates are usually more rewarding as you can secure the rate of exchange in advance; as an example, M&S Bank offers €227.98 per £200 for click and collect, but only €224.96 for home delivery or as a bureau rate."
"Using a debit card abroad to withdraw cash may seem convenient, but it can be a costly expense," warns Rachel. "A typical debit card can charge as much as £9.50 (NatWest Select Account) for the equivalent of a £200 cash withdrawal abroad, while a typical credit card can charge £11.96 (HSBC Classic Credit Card) for the same transaction*. Clearly, it pays to be more prepared, and it's also wise to inform the bank of the upcoming trip." There are exceptions to the no credit or debit card rule, however, and that's if you've got a card that's specifically designed to be used abroad. Which brings us onto…
"To avoid paying out on unnecessary fees, holidaymakers would be wise to apply for a credit card designed specifically for use abroad, or even switch their current account to a cheaper alternative," said Rachel. "Many travel credit cards do not charge a usage fee when used overseas, such as the Creation Everyday Credit Card and Halifax Clarity Credit Card. Those customers looking to save on interest charges will also find the Santander Zero Credit Card appealing, as it offers an introductory 0% purchase deal for 12 months – together with fee-free foreign use – giving borrowers time to pay off their holiday purchases without being charged interest."
Preparing for your trip in other ways could also pay dividends, particularly when it comes to transport, which can often be difficult to get the hang of in a foreign country – and it could end up being a pricey expense. "There are free apps such as Citymapper that list public transport and can help consumers avoid relying on last-minute taxis when travelling," said Rachel. "Not only this, but these types of apps allow consumers to plan any sightseeing tour of their choosing, without the expense of a tour package. Transport apps also have the added benefit of allowing holidaymakers to change their plans at the last minute, due to unpredictable factors like the weather for example, giving them peace of mind that a new route is close to hand."
One of the most important things you can do ahead of any holiday is check you've got the right kind of travel insurance in place, whether it's part of an existing package or a standalone policy. "Consumers don't always have to pay for travel insurance, and not all travel insurance policies will cover everything, so it is important to carefully check all the terms and conditions before travelling abroad," said Rachel.
"For example, there are current accounts that offer worldwide travel insurance cover as an add-on to their package, with Barclays Bank charging £12.50 per month on its Bank Account with Travel Pack and Nationwide charging £13 per month on its FlexPlus. These are some of the cheapest on the market and they include baggage and delay cover, which could prove beneficial to many travellers. The latter also includes worldwide mobile phone insurance and UK and European breakdown cover, plus the debit card allows free cash withdrawals abroad too."
However, if you don't have travel insurance included in your current account, it's important to source it elsewhere. You can compare travel insurance quotes, ensuring you've got the cover that's right for you and giving you peace of mind that your finances are protected this Easter.
*Typical debit card example is the NatWest Select Account, which charges a transaction fee of 2.00% and a conversion fee of 2.75% on cash withdrawals. Typical credit card example is the HSBC Classic Credit Card Visa, which charges a 2.99% usage fee and a 2.99% cash withdrawal fee.
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.