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If you are planning on taking holiday cash with you, never get it at the airport.
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Holiday savings on the cards
Martin Lewis from MoneySavingExpert.com8/ 7/2008
AS you might expect, the last thing I do before heading off on my hols is make sure I've got all the essentials: passport, flight tickets, travel Scrabble.
But just as importantly, I also grab my special overseas wallet.
You might think having two wallets is a bit flash. But, in all honesty, it's a very deliberate money-saving ploy on my part.
That's because the wallet is specialised to save me money while I'm abroad. By following a similar trick you should be able to save yourself a fortune, too. Now let me run though what I have tucked away in there.
Sitting proudly at the front is a Nationwide credit card. It's one of three credit cards that specialises in making it cheap to spend abroad.
The other two are the Post Office card and the relatively new on the market Abbey Zero card, which, in actual fact, is the best of the lot.
So what's so good about them? Well, it's simple really. Every time you spend on plastic overseas your bank will receive the best exchange rate possible. This is known as the wholesale rate (effectively the rate Visa and Mastercard trade currency for in the City). But to make a little extra money most financial institutions add on what's called a foreign exchange load (normally 2.75 per cent). The result? Every time you spend £100 worth of euros you will actually be charged £102.75.
Best possible rate
None of the three cards I've mentioned add this load so by using them overseas you'll always end up with the best possible rate.
There are other benefits, too. Incredibly, some debit cards including those from Halifax Bank of Scotland, Lloyds TSB, the Royal Bank of Scotland and NatWest not only charge a load but also what I call a spending penalty (this is so excessive I call them the cards from hell).
This means every time you buy something, say a meal in a restaurant, an item of clothing or a gift, you'll be hit with a fee.
The three credit cards I've mentioned do not charge a penny for buying abroad.
Not only that, but with Abbey Zero there's no fee charged for physically withdrawing cash from an automated machine, where most cards charge two per cent of the amount taken out. Though remember for all of them, all you'll pay is interest from the moment the withdrawal is made until you repay it.
Overall, these cards are three to five per cent cheaper than buying foreign currency at a foreign exchange outlet and six or seven per cent cheaper than using one of the debit cards from hell.
The next item in my wallet is a European Health Insurance Card. This replaced the old E111 form just over two years ago.
Effectively, this card entitles you to free health care throughout the EU and Switzerland.
Apply for one
I'd strongly advise anyone travelling to Europe to apply for one of these. It's free and can be ordered online or over the phone.
Don't, however, think it's a substitute for travel insurance.
For starters it doesn't include repatriation, baggage loss, flight cancellation or legal indemnity insurance.
Not only that, but there are certain medical procedures only comprehensive travel insurance will cover.
Also in my wallet are some euros, dollars and a few Turkish lira. These are all left over from trips I've taken in the last couple of years.
When abroad, I tend to withdraw currency using my credit card. But instead of exchanging whatever notes are left on my return home - and there's usually not many - I keep them for my next trip.
As a result, I avoid forking out yet more foreign exchange fees and have a few bob to get me started whenever I travel again.
If you'd rather take currency abroad than a credit card, there is one golden rule. Never, ever, ever buy it from the airport.
The rates in the departure lounge tend to be far worse than on the high street, because effectively airport vendors have a monopoly over your business. There is a rather crafty way around this though. Some companies including Travelex, Travelcare and American Express allow you to order currency online in advance and collect it at the airport free of charge.
The great thing about this is you'll receive a far better exchange rate - usually about three to four per cent better - than buying the cash at the airport on the day you travel.
To get the best available rates check the travel money maximiser on my website at
moneysavingexpert.com/travelmoney
.
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| Card | BT Fee |
| Capital One BT Exclusive | 3.0% |
| Virgin Credit Card | 2.98% |
| Barclaycard Platinum 'As on TV' | 2.9% |
| Capital One Platinum | 3.0% |
| Lloyds TSB Platinum MasterCard | 3.0% |
| Company | Typical APR |
| Moneyback Bank | 8.4% |
| Alliance & Leicester | 8.7% |
| Halifax (Semi-exclusive) | 8.8% |
| Bank of Scotland (Semi-exclusive) | 8.8% |
| Barclays | 8.9% |
| Provider | AER* |
|
ICICI BANK HiSAVE Fixed Rate Account |
7.20% |
|
ICICI BANK HiSAVE Fixed Rate Account |
7.00% |
|
ICICI BANK HiSAVE Fixed Rate Account |
7.00% |
|
ARRAY(0x2b62d95caad0) 6 Month Fixed Rate Savings Account |
6.60% |