UK Residents Spending Billions Abroad; How to Make the Most of Your Money
As summer approaches, many UK residents are making plans for their annual holidays, but with so many options for spending abroad, it can be difficult to know how to make the most of your money. According to travel experts, the key is to be strategic when using credit and debit cards, prepaid travel cards, or exchanging cash.
“The cheapest way to spend overseas is often on plastic, if you’ve got the right plastic,” said James Jones, head of consumer affairs at Experian. “Using credit and debit cards can be a great way to get the very best exchange rates.”
However, it is important to be aware of potential fees and charges that could wipe out any potential savings. Jones recommends shopping around for a card with travel rewards and doing so at least six weeks before your trip.
Additionally, when booking a trip between £100 and £30,000, it is recommended to pay for a portion of it using a credit card to take advantage of the extra protection offered under section 75 of the Consumer Credit Act. This means that the card provider is jointly responsible with the retailer if anything goes wrong, such as a hotel closing down.
When using a credit card, it is important to be able to pay off the balance in full to avoid interest charges, according to Sean Tipton from the Association of British Travel Agents (ABTA). He also warns against falling into the trap of paying in pounds instead of the local currency, as this can result in paying higher fees.
For those who prefer to use debit cards, it is recommended to check with your service provider for potential fees and charges. Alternatively, some providers offer specialist travel debit cards that do not impose non-sterling transaction fees or cash withdrawal fees.
Prepaid travel cards can be a good option for those looking to avoid a credit check, as they can be loaded with multiple currencies and work like a debit card without being connected to a bank account. However, it is important to note that these cards do not offer purchase protection like a credit card and are not regulated by the Financial Conduct Authority.
While using cards can be convenient, it is also important to have some cash on hand, as not all vendors accept card payments. In some countries, it can be difficult to withdraw money from ATMs without a local bank account. Therefore, it is recommended to get some cash out in the UK before traveling, as finding a bureau de change in some developing nations can be a challenge.
When it comes to exchanging currency, it is best to do your homework and lock in a rate when it is good, according to Laura Plunkett, head of travel money at the Post Office. She also advises that rates are typically better when ordering online, but it is important to note any minimum order values and delivery times.
For UK residents traveling to the Eurozone, Mr. Tipton suggests keeping an eye on the exchange rate and buying larger amounts of Euros when the pound is strong. However, he notes that it is a bit of a “lottery” and that the rate has remained fairly stable.
In conclusion, with a bit of research and planning, UK residents can make the most of their money while spending abroad. Whether it’s using the right credit or debit card, a prepaid travel card, or exchanging cash, being strategic can help stretch those pounds a little further.