Make your holiday money go further this half-term

11th February 2010

Whether it's Valentine's Day in Paris or a half-term family trip to the Alps, many Brits may be thinking about escaping abroad over the next few weeks.

Getting a competitive deal on foreign currency can make a big difference to holiday spending, especially with a weak pound, so travellers should ensure they're carrying the right card when abroad.

Avoiding the bureau de change at the airport is the first step towards saving some holiday pennies. Travellers taking out €1000 from the Travelex in Heathrow airport would spend £953, a hefty £68 more than someone using the leading debit card for cash withdrawals when on holiday in Europe.

Whilst using their everyday credit or debit card may be a convenient and cost efficient means for holiday makers to pay for things while away, the way in which providers charge for usage varies a great deal and those using an inappropriate product could find that costs soon mount up.

Prepaid cards are becoming increasingly popular with travellers and are especially good for those travelling on a budget as they as they can be topped up with currency before leaving and used just like a debit or credit card. Most prepaid cards offer an excellent rate of exchange; however some will be better than others so it's worth shopping around to ensure you're getting the best deal.

Peter Harrison, travel money expert at moneysupermarket.com, said: "Using an appropriate product can save holiday makers a packet and there are several different options available to savvy travellers. The market leading prepaid cards from FairFX or CaxtonFX have no purchase or foreign loading fees and can be topped up online or over the phone for free with a debit card.

Customers using the Nationwide debit card rather than the Current Plus Account from NatWest could save themselves £44.34 on fees when withdrawing €1000

"Consumers should ensure they read the terms and conditions when signing up to a prepaid card as not all providers offer the same rate of exchange and some can charge for transactions in certain situations; for example, using a Dollar for transactions in  Europe. Ultimately, it's about understanding the product and knowing when and how to use it to ensure you're getting the best deal."

Those using a debit card rather than a prepaid card, should be aware that many banks and building societies charge a foreign usage transaction fee of between 2.75 per cent and 2.99 per cent every time you make a purchase on your card; ATM fees are also common for most debit and credit cards. While making transactions abroad, accounts such as Nationwide FlexAccount or the Zero account from Santander offer consistently good rates and have no charges for usage in the European Visa Region.

For example, customers using the Nationwide debit card rather than the Current Plus Account from NatWest could save themselves £44.34 on fees when withdrawing €1000 from ATMs on the continent.

Peter Harrison said: "It can be really expensive for holidaymakers to use their current accounts or credit cards abroad and it's crucial they check the terms and conditions of their product with their provider before travelling. For consumers with a high-interest current account, there's no harm in opening a Nationwide current account specifically for their trips away."

"No one product is the perfect partner for holiday travel so customers who are unsatisfied with their current provider need to think about their requirements and shop around for the product that best fits their needs."

Useful links:

Holiday complaints

Claims Financial