The good news for travellers going on ski, city or sunshine breaks this winter is that many popular holiday destinations have now relaxed or removed Covid-19 entry restrictions, making the logistics around going abroad easier.
Travel insurance is still an essential purchase, and it’s crucial to have Covid-19 protection within your travel insurance policy so that you are protected is problems flare up once more.
The not-so-welcome news is that the cost of going overseas is creeping up in some destinations with recent research from foreign exchange expert, eurochange, finding that a week’s holiday in mainland Spain is £505 more expensive for Brits now than it was this time last year.
This, it says, is due to various factors including the increased cost of hiring a car, accommodation rates rising and eating in restaurants costing more.
The value of the pound has also fluctuated against holiday destination currencies such as the euro and US dollar, meaning you could get less foreign currency for your sterling.
So, it’s more important than ever to be savvy when spending abroad this winter to maximise what you get for your holiday money. Here’s how to do it.
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Take the right plastic
Your normal credit or debit card will probably work while you’re abroad but you’re likely to be hit with extra fees to use it. These could include a flat fee every time you use your card or a set percentage charge, a non-sterling transaction fee and a charge to withdraw cash.
As an example, non-sterling transaction fees on credit and debit cards are often around 2.99%. This means, if you spend £100 in a shop or restaurant, an extra £2.99 could be added on. If you use certain debit cards for this transaction, a flat fee of up to £1.50 could also be added on. So, if you use your normal cards regularly, these fees will soon add up.
But there are specialist credit and debit cards designed for use overseas, which will allow you to avoid these fees.
To help you find the best travel credit card for your next trip, take a look at our latest research.
Consider a prepaid card
Using a specialist travel credit card will save you from sneaky fees, but if you’d rather not use a credit card at all, or would like to stick to a budget, a prepaid currency card is another option.
Again, these will generally be cheaper than using your standard credit or debit card – but always check what fees you’ll be charged before committing.
With a prepaid travel card, you can load it with cash before your trip then use it like a debit card while you’re away. As you won’t be able to spend more than the amount you’ve put on the card, they are a good option to stop you accidentally blowing your budget.
If budget isn’t an issue and you do want to spend more, you can usually top the card up while you’re away too.
Be aware, though, that prepaid cards may not be accepted everywhere – as a deposit for a hire car as an example – so it’s worth having a back-up card if you think you’ll need it.
Shop around for the best currency deal
Having local currency in cash while you’re away can be useful for everything from taxis to tips, but it can be all too easy to leave buying holiday currency until the last minute.
However, if you allow some time to shop around for the best exchange rates online before a trip, you’ll maximise your spending money as rates can vary massively on the high street.
While you can still pick up currency in person by dropping into a bank, post office or bureau de change, you can also pre-order it for either collection or delivery. Remember when looking at delivery options to factor in any additional delivery charges too.
When you’re paying for your currency, a top tip is to avoid using your credit card as this transaction may be treated like a withdrawal of cash meaning you’ll have to pay an extra fee.
Need to buy currency at the airport? Pre-order it
An airport bureau de change knows that you have few options by the time you reach them. So, if you turn up at one and buy currency there and then, you’re very unlikely to get a competitive exchange rate.
But, if the airport is your only option, don’t panic. You can pre-order your cash for collection before you arrive to benefit from more competitive online rates. Even if you’ve left it to the night before your trip, it’s worth checking if there is currency available to pre-order.
If you want to know how much foreign currency you’re likely to get for your sterling, try our easy-to-use currency converter.
Don’t be tempted to pay in pounds
Constantly converting rates in your head while you’re away can be tiring. So, if you’re offered to pay a bill in pounds rather than the confusing local currency, you may be tempted to accept. But don’t.
If you choose to pay in pounds and not the local currency, the retailer you’re spending with will do the currency conversion rather than your card provider. This is known as dynamic currency conversion and, as the rate is likely to be worse than what you’d pay in local currency, you’ll end up paying more.
Leftover cash? Don’t lose out
When you’re home, don’t rush to change your leftover cash and undo all of your hard work.
If you’re planning a trip in the near future to a destination that accepts your currency, it may be worth holding on to smaller amounts. Or, if friends and family are, you could exchange money with them.
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