Slash Holiday Expenses: 8 Smart Tips to Save Money and Reduce Card Costs

1. Choose the Appropriate Payment Card

Preparing for a summer vacation isn’t just about packing the essentials but also about choosing the right financial tools. Using an inappropriate card overseas can lead to excessive charges.

If your departure is still some days away, consider applying for a card that doesn’t charge for foreign transactions or bank fees. You might be surprised how quickly you can receive your new card, often just in a few days.

Consumer advocacy group Which? has identified the top debit and credit cards for international use. Notable debit cards include those from First Direct and Starling Bank, which offer the Mastercard exchange rate without additional fees. In terms of credit cards, the Halifax Clarity and Barclaycard Rewards cards are recommended for their absence of foreign transaction and withdrawal fees, using Visa’s exchange rate.

Another notable option is the Currensea travel debit card, which links directly to your existing bank account and charges you directly, with various plans including a basic plan with no annual fee but a one-time delivery charge of £4.95.

2. Understand Your Card’s Terms

If getting a new card isn’t an option or you’re pressed for time, don’t ignore the fees associated with your existing cards.

Financial expert Andrew Hagger of MoneyComms advises checking the fees your card provider charges for purchases and ATM withdrawals abroad. This knowledge can help you manage your spending and minimize costs.

Be cautious with debit cards for small transactions if your bank charges a flat fee per transaction. Similarly, withdrawing cash with a credit card can be expensive due to high fees.

TSB debit cards, for instance, are known to be costly outside Europe with notable transaction and percentage fees, although certain accounts offer conditions that waive these fees.

3. Adjust Your Digital Wallet Settings

If you use digital wallets like Apple Pay or Google Wallet, make sure to check and adjust your settings to choose the most suitable card for travel, suggests Alastair Douglas from TotallyMoney.

This prevents unexpected charges and helps you avoid financial surprises post-vacation.

4. Opt for Local Currency Transactions

When abroad, you may encounter dynamic currency conversion offers in shops, restaurants, or ATMs, suggesting you pay in your home currency.

Douglas advises always opting to pay in the local currency to avoid extra conversion fees that add to your expenses for no additional benefit.

5. Consider If You Really Need Cash

Some travelers rely solely on cards, using ATMs only when necessary, while others prefer having local currency on hand from the start.

With many countries moving towards cashless transactions, it might be possible to travel without cash altogether. However, cash might still be necessary for small vendors, tips, and certain attractions.

Japan, for example, is a country where cash is still essential for many transactions, especially in smaller towns or rural areas.

6. Secure a Good Exchange Rate for Cash

If you decide to carry cash, it’s wise to get a good exchange rate. The Travel Money Max tool by MoneySavingExpert.com allows you to compare rates effectively.

Avoid airport exchange rates and high street banks, as they typically have less favorable rates.

7. Verify Your Insurance Coverage

If carrying a significant amount of cash, ensure your travel insurance covers potential loss or theft. Always use a safe for storing money in your accommodation.

8. Avoid Double Currency Conversions

If you have leftover foreign currency, consider the best way to convert it. Switching directly from one foreign currency to another often involves double fees.

You might find it more economical to exchange the money once you reach your destination rather than doing it beforehand.