UK Edition
Do these 5 things before you go on holiday and save thousands
Before you head off on holiday there are a few simple steps you can take to help boost your money and not fall foul of common financial pitfalls.
These are the most important.
1. Get your currency - and not at the airport
As we regularly highlight at Telegraph Money, getting foreign currency at the airport will give you the worst value for money. Airport currency desks bank on desperate last-minute travellers, and charge them more for the service.
Don't be caught by this trap. Instead, search online on reputable travel money websites to see who is offering the best deal.
For cash, small local outlets tend to offer the best rates in areas where competition is fierce, such as central London and other major cities. The consumer website MoneySavingExpert has an online tool called TravelMoneyMax that sifts through the rates offered by online bureaus, taking your location into account.
For many exchanges you get a better rate by ordering online first, and then picking up the cash in branch. You also get your order posted to you, but this will come at an extra charge.
In a test conducted by Telegraph Money last year, the difference between the in-store and pre-order rate at one bureau, International Currency Exchange (ICE), on a £2,000 exchange into euros was €58.40.
2. Get a pre-paid currency card...
Pre-paid cards allow you to load up your chosen currency and then use it like a debit card abroad.
There are two types of cards: some let you top up the card in the desired currency, locking in the rate, while others let you load in pounds and convert the money as you spend it. Check for any charges, such as for cash withdrawals or for using the card in the UK.
Providers include Revolut, which is run via a phone app and offers the exact "interbank" exchange rate for 120 different currencies - far better than any currency bureau. It is free to spend and take out up to £200 in cash each month, after which there is a 2pc fee. It costs £5 for card delivery.
Another is Caxton Mastercard, which locks in an exchange rate on 14 difference currencies. There is no charge for spending or taking out cash, but there is a 2.75pc exchange rate mark-up. FairFX Everywhere is another option, that you load with pounds, which then get converted to the relavent currency when you spend. Cash withdrawals cost £1 and it charges a 1.4pc exchange rate mark up.
If you're jetting off on holiday in the next few days it may be too late for this card as it can take time for it to arrive.
3. ...or this travel credit card
Spending on plastic while away can quickly rack up large costs in foreign transaction fees or poor exchange rates.
Instead you can get better rates and fee-free spending with specialist travel credit cards.
Our favourite is the Halifax Clarity Mastercard.
There’s no fee on spending or withdrawing cash, and Mastercard exchange rate is typically better than that of an American Express or Visa card. If you open an account before September 3 this year, you’ll get £20 cashback on your first transaction too.
You need to make sure you pay off the full balance on time, as the interest is charged at 18.9pc, and so will cancel out much of the savings made pretty quickly. One word of warning: the interest is charged on cash withdrawals as soon as you take the cash out. So, if you can, cut costs by paying off the balance while away, via internet banking, or use one of the above options to access cash.
Again, a card will take time to arrive, so it's not ideal for last-minute travellers.
4. Check your EHIC is in date - or renew it
A European Health Insurance Card (EHIC) gives holidaymakers medical treatment when they are away.
It covers travellers to European Economic Area (EEA) countries, plus Switzerland, and effectively treats holidaymakers as if they are local either for free or a small fee.
European Health Insurance Cards are free of charge to British citizens and can be ordered from gov.uk/european-health-insurance-card.
Beware of websites thatask you to pay an administration fee - typically £35-£40 - for a new or replacement card. You don’t have to pay if you use the official government site.
5. Get excess insurance if you're renting a car
This trick avoids you getting to the car hire counter and being stung with a large bill for insurance.
Many car hire companies encourage holidaymakers to take out their insurance to protect them against any damage to the car. But for a much lower cost travellers can take out their own policy before they go.
If damage does occur to the car you will typically have to pay the cost upfront and then submit a claim to your car insurance afterwards. You will also often need to leave a large deposit - which will be placed as a 'hold' on your credit card.
But the cost savings can be high. A week of car hire cover in Europe with one driver, leaving next weekend, costs just £20.93, or for just £38.67 you can get annual European cover. In comparison, for a week's car hire in Spain with Hertz the excess cover costs an additional £28 a day - a similar amount to the actual car rental.
If you are hiring a car while away also be careful of pricey fuel policies that ask you to pay for the fuel upfront and then return the tank empty - which costs a lot for those that don't manage to empty the tank.