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We have already stepped into 2020. Do you know what it means? Spring/summer holidays are getting nearer, and you should have a backup plan that won’t blow through your budget like the last year.
Whether you are planning a short winter getaway with family or a solid, 10-day break from reality, spending abroad can hit you like a ton of bricks. If you don’t want poor exchange rates and mad card fees to leave a hole in your wallet, stick to our 9 tips on how to save money on your 2020 holidays.
Paying with your card abroad or withdrawing money on the ATM unlocks the currency conversion fees. Instead of paying in your local currency, pay in the local currency of the country you are visiting. DCC (dynamic currency conversion) benefits banks instead of customers, leaving them with the worst possible rate in comparison to the rate your card provider would suggest.
If you are using a Mastercard currency card (FairFX, WeSwap, Caxton, etc), you don’t have to worry about DCC. Last year, Mastercard announced their users wouldn’t be able to withdraw money in their country of residence’s currencies but local currencies of the visiting country only.
Using a normal credit card abroad exposes you to the following types of fees: non-sterling transaction fees and non-sterling cash fee. The first type of fee takes 2.99% of your transaction each time you use your card.
When you are withdrawing money on the ATM with your regular card, you are paying a non-sterling cash fee – 3% or £3 per transaction. What is more, this pulls an interest on cash withdrawals as well that will stay until you pay your balance off.
These fees don’t apply to specialist travel credit cards, and you can use them to borrow some money in case you need to pay something extra.
Similarly to credit cards, debit cards rack up fees quickly. If you think you would use the card daily, ask for a fee-free debit card for overseas spending. This excludes fees for cash withdrawal, transactions, and purchases.
A prepaid travel card offers a couple of conveniences – to load it with desired currencies, lock it to the selected currency or exchange as you go. Loading is easy, as it goes via text, a phone call to your provider, or over the internet.
Another great advantage of a prepaid travel card is that your funds are protected and, in case the card is stolen or lost, you can transfer the money to another card. You can find this type of card in almost any high street retailer that works with prepaid cards.
If you have plans of traveling to the desired destination by plane or airplane, make sure to book the tickets in advance. Booking a ticket 3 months in advance can bring you a massive reduction (higher than 80%).
Some people don’t mind slower routes. If you are one of them, you can cut down on travel expenses by prolonging the arrival time a bit.
The airport bureau has none incentive to be competitive. That’s why they offer the least favourable exchange rates. Buy foreign currencies at the Post Office, even on the high street, but never from the airport.
Constantly thinking about the money would ruin your holiday. Instead of handling everything on your own, download an app for saving money. These apps provide you with access to your spending habits, outgoings, and incomes.
Heading towards Switzerland, Norway, Liechtenstein, Iceland, or somewhere to EU? Apply for an Ehic card to be able to receive hospital treatment at the same price (usually very affordable) as residents of the country you are visiting.
Be careful when applying for the card and order only through the NHS website. Without it, you would be required to pay hospital treatments up-front.
Even the cheapest travel insurance is better than no insurance. No matter if you own an Ehic card, you may still want to get insurance. Ehic doesn’t apply to mountain rescue, using air ambulance, or being robbed.
We don’t want to scare you with the worst-case scenarios, but it would be wise of you to shop around for insurance that will make you feel more relaxed while on holiday.
There is a lot to cover when thinking about an overseas holiday. If you feel overwhelmed by all this information, make sure to contact Ace-FX and order your card that will bring you to a full peace of mind whenever you travel.