Are you planning to take a break this year? If you are, read this essential guide to holiday finance before you go!
We Brits take our holidays very seriously indeed, perhaps because we have the longest working hours in Europe, ouch! In addition, we spend considerably more on holidays than our Continental cousins, so it's well worth shopping around for both your holiday and your holiday money. Here's our brief guide to getting more holiday cash for less.
Credit cards
One major disadvantage to using UK-issued credit cards abroad is that almost all card issuers charge a 'foreign currency commission' of around 2.75% of your spending. In other words, you end up paying almost £103 for every £100 you spend abroad. Despite a lengthy search, I could only find two firms that don't impose this fee: Lombard Direct and Nationwide BS. However, Frizzell and Saga don't charge for purchases made within the EU, and their fee is only 1% for non-EU countries.
Also, when you use a UK credit card to withdraw cash from a cashpoint, you pay a fee of up to 2.75% of the amount withdrawn, with a minimum charge of around £2. Be warned: there's usually no interest-free period on cash, so you're charged interest from day one until the entire balance is paid off! Once again, Nationwide's card is the winner here, because its cash-withdrawal fee is 1%, minimum £1. Although this is increasing to 1.25%/£1.25 in June, Nationwide is still the market leader, making it my ideal plastic travelling companion!
Travel insurance
Buying travel insurance from travel agents or tour operators is a brilliant way to waste a fortune! As this article reveals, six out of ten holidaymakers buy insurance from travel agents, acquiring inferior policies that can cost up to ten times as much as the most attractive products! Don't get ripped off: find better cover in our Insurance centre.
Holiday money (foreign currency)
A baffling variety of exchange rates, commissions and other charges make it easy to be short-changed when buying foreign currency! My trick is to ask, "How many Malaysian Ringgits [the foreign currency you need] will I get in my hand for £200, taking account of all charges?" It's the only way to compare like with like. On the high street, I usually call or visit NatWest, Marks & Spencer
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, the Post Office and Thomas Cook before plumping for the best offer from these four providers.
Don't take all your spending money in cash, because most travel insurance policies won't refund more than £250 for lost or stolen cash. Travellers' cheques usually cost the same to buy as currency, but watch out for commission (up to 2%) and exchange rates - so ask the above question again. What's more, some foreign banks charge fees of up to 6% for cashing travellers' cheques, so check before you hand over your cheques to the cashier!
Sterling travellers' cheques will do in most countries, but you'd be wise to buy euro cheques for trips to the eurozone, and US dollar cheques for more exotic locations, including North and South America, Asia and the Far East.
Sun-care products and other holiday items
Although Boots
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has the best reward card on the high street (its Advantage Card points are worth £4 for every £100 you spend), it's one of the most expensive places to buy holiday essentials. You could save over £30 by buying your suntan lotion, camera film, insect repellent and so on from a cut-price supermarket - ASDA or Tesco
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are good value.
Wherever you're heading, have a great holiday!
More: Visit our Credit Card and Travel Insurance centres | Finding Cheap Travel Deals Online.
