Finances on holiday

04 October 2010

Going on holiday can be expensive, and you want to keep costs as low as possible so you have more spending money with which to enjoy yourself. Here we go over common ways people spend more than they realise when on holiday, so take note, be prepared and save yourself some cash with these finance holiday tips.

Do not change money at the airport.

This is a common mistake many people make. The exchange rates at aiports are very poor, so you will get less foreign currency for your money, also commission fees are high. It is best to change your money in advance at your travel agent or bank, and shop around for the best rates. Another thing to watch out for is an extra charge that will be made called a “buy back” charge. This you pay to ensure that if you have any money left over at the end of your holiday, you will not be charged a commission changing it back. However, this charge is likely to be higher than the commission you will pay.

Check your credit card interest rates

Many credit cards charge much higher interest rates when used abroad. Check with your credit card provider before you travel to see what these charges are. There are credit cards that offer low interest rates when used abroad 3 Check the charges for withdrawing money abroad. Many banks will charge you a hefty fee for withdrawing money from foreign cash machines. Check before you travel to see what these charges are. Many banks charge a minimum fee for withdrawals, so if you must withdraw money abroad, it may be best to take out larger amounts at a time to minimise these fees.

Avoid your card being blocked abroad.

With more and more card fraud being committed these days, banks are becoming very cautious in authorizing unusual transactions, such as those from abroad, so you may find your card blocked. Notify your bank that you will be travelling abroad at least 48 hours before you travel to ensure this does not happen to you. If it does happen, you can contact your bank and they can normally unblock your card straight away.

Watch out for mobile phone charges

Using your mobile abroad can cost a lot more than you expected, with charges often 10 times higher than at home. Also, receiving calls whilst abroad can cost you a lot of money, as you are charged extra for being abroad rather than the person calling you. It is a good idea to have a mobile for emergencies, but for making calls it is better to purchase international calling cards and use public telephones if you want to avoid ridiculous charges.

Check your insurance

Many travellers end up being stung by travel insurance, either by purchasing insurance they do not need or by purchasing inadequate cover that does not pay out. If you have already purchased travel insurance, you do not need to take out further insurance when buying an airline ticket. It is a good idea to ensure you insurance covers lost luggage and items, delayed/cancelled flights, and accommodation. Many cheap insurance policies lack this full cover. When renting a car abroad, check the insurance policy carefully. You want to make sure you are fully covered and there are no excess fees to pay should you have an accident. Also ensure any additional drivers are fully covered.

Make sure you fill your hire car tank

Most car rental firms expect you to return your car with a full tank of petrol. Make sure you do this, otherwise you will be charged a hefty fee, which can amount to more than double the cost of a tank of fuel if you had filled it yourself.