Cut The Costs Of Your Summer Holiday
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Summer holidays. The sun is free, the sand is free, the sea is free and the rest of it is darned expensive.
But with a bit of planning and preparation before you go, you can keep the costs down -- and ensure every penny you spend goes towards a good cause: Enjoying yourself.
Cost 1: Mobile Phone Calls
There are few things I hate more than receiving a phone bill after I've been abroad.
Take my last skiing holiday. At the time, that short, panicked phone-call to my boyfriend to ask him to rescue me from the top of the mountain -- after I realised learning to ski was actually a very bad idea indeed -- seemed quite, well, essential.
But while I managed to get down the mountain without injury, that phone call from my UK mobile to his UK mobile cost us both an arm and a leg. (Even though my knight in shining ski gear was, at the time of the call, sitting just a few yards away, eating a crepe.)
Unfortunately, despite the intervention of European communications regulator, making calls to the UK while in Europe remains extremely expensive (35p a minute). And you still have to pay for receiving calls (18p a minute).
Outside Europe, you will pay even more.
Luckily, some mobile phone providers will allow you to upgrade your tariff to an international package for the month you're abroad.
For example, if you're with Orange, you can sign up to its Frequent Traveller package for £2 a month - this will give you up to 50% off calls while abroad. And if you want to, you can cancel it after just a month.
O2 also has a MyEurope Extra package, which allows you to make calls for 25p and receive calls for free in Europe. But it costs £10 a month, so may not suit everyone. If you're going to Ireland, however, it offers a great, free Ireland bolt-on.
Cost 2: Car hire
Planning a road trip? It pays to shop around on the internet for a good price on your hire car before you go.
There are lots of sites which allow you to compare the cost of car hire abroad, such as carhiremarket.com and carrentals.co.uk. And if you haven't booked your hotel yet, look for package deals on sites like Lastminute, Opodo or ebookers -- you may be able to get free or discount car hire thrown in with the hotel room.
Want to avoid the rip-off £10-a-day excess waiver offered by the car hire company? Take out excess reimbursement insurance before you go.
This will cover your excess if you damage the hire car, but should work out a lot cheaper than the typical excess waiver. Insurance4carhire.com offers an annual European policy for £49, while Worldwideinsure.com offers a daily rate of £1.90 to EU drivers.
Cost 3: Currency Commission
You can avoid paying commission when you exchange currency if you order it in advance from the following high street banks:
- HSBC
- Nationwide
- Barclays
- Halifax
These banks will also buy back any un-used currency after your holiday, commission-free.
What's the catch? They will charge you up to £5 as fee if you order less than £500-worth of the currency.
Before deciding which bank to use, check the mid-market rate of the currency you want. The closer your bank's offer is to this rate, the better.
Of course, just because a bank offers a commission-free exchange, it doesn't mean it offers the best deal. You may be able to find a more competitive rate elsewhere, which proves cheaper, even when they add on the commission.
Cost 4: Withdrawing Cash While Abroad
If you're planning to withdraw cash while abroad, then you could potentially save yourself hundreds of pounds in fees by hot-footing it into your nearest Nationwide branch before you head off for your hols.
That's because, if you open a Nationwide current account, you can withdraw cash and make purchases abroad using a debit card - and, unlike most banks, Nationwide won't charge you a penny for the privilege.
In fact, as far as I know, Nationwide is the only bank which refuses to penalise people on their holidays for using their account normally in this way.
To figure out how much your bank would charge you, check out Nationwide's Overseas Usage Calculator - I was quite surprised at my own results, which showed I would incur more than £50 in fees.
Unfortunately, the Nationwide card is only a debit card, and you may also need to be able to use a credit card on your holidays (for example, some hotels and car hire firms won't allow you to use anything else).
If so, I'd recommend you read my Foolish friend Serena Cowdy's excellent article on The Best Credit Cards To Use Abroad. It could save you a tidy sum.
Cost 5: Flights
Finally, we come to what is likely to be the biggest expense of all: the flights.
I'm sure that, being Foolish, you're quite aware that you are most likely to find a bargain if you shop around using a flight comparison site - and then check how much the price is if you go direct to the airline's own website.
The question is: once you've found you've found your bargain flight, what are you going to use to pay for it?
If you're not certain you will manage to pay for your holiday in full and are planning to put it on the plastic, I'd opt for a 0% on new purchases card. That way, you can pay it off gradually, potentially over 14 months, and you won't pay any interest.
If, however, you are certain you can afford to pay off your credit card balance in full at the end of the month, then you will be better off with a card that rewards you for your spending, such as a cashback credit card. That way, your biggest holiday costs will also earn you a bit of extra cash to spend on your holiday.
Alternatively, if you're up for more travelling, you could go for a rewards card that offers you airmiles - and use this holiday to pay for your next.
Enjoy!
More: Get Free Flights With Your Credit Card | The Best Credit Cards To Use Abroad
> Compare travel insurance policies at The Fool.
