Make that holiday cash stretch further - Martyn James

If you’ve scrimped and saved to book a holiday abroad this year, chances are you’ve already had to face forking out for expensive flights and costly hotels. This is on top of getting through the last year of crazy inflation and rocketing bills and costs.

Make sure you're money savvy before packing your bags for that much-needed holiday (Picture: Adobe)

So now your hard-earned vacation is on the horizon, let’s have a look at how we can help make that holiday money go further! Here’s my guide to making the most out of your cash, so you can make a splash.

Cash versus cards

Most European destinations accept cards almost everywhere, which means you can split your holiday budget into 20 per cent cash and 80 per cent on your debit or credit cards. But in some destinations like Greece, or others outside Europe, cash is still king. Do a bit of research before you travel on card acceptance and maybe take a 60/40 split between cards and currency.

Travel debit and pre-paid cards

Best of all the foreign currency options I’ve researched is the independent travel debit card. Many of these cards are free and there are usually no hidden fees. I use Currensea but there are loads of options. Travel debit cards aren’t banks. They “draw down” money from your bank accounts when you pay through the card and give you the best exchange rates available without fees.

You can also monitor your spending in real time on the app so you know exactly what you’re paying in pounds on those pina coladas. Because the money doesn’t “live” on the card, you don’t have to worry about the business going bust. Plus you can “charge back” cash if there’s a dispute over goods and services that you’ve paid for.

Buying currency

Before you travel, familiarise yourself with the exchange rates for the currency you want, so you know you aren’t getting ripped off. The good news is there are loads of online “Bureaux de Change” these days with great rates. MoneySavingExpert has a useful comparison tool that helps find the best rates near you:

Bear in mind that traditional bank and high street options don’t have particularly great rates, so don’t stick with what you know: shop around. You can have currency delivered too. Don’t worry, they won’t leave it outside your door like an Amazon package!

Using a credit card

There are some travel-focused credit cards that give you the most competitive exchange rates available on the day you spend. However, not all credit cards are equal so don’t assume that the one you have is the best option. You can compare the best cards online but be aware that the application process, acceptance and delivery might take a few weeks. Other credit cards may have good rates but check what the fees are for using them abroad before you travel.

Credit card purchases are also covered by section 75 of the Consumer Credit Act if you spend over £100 on goods or services, which can be useful if you’re paying for flights or accommodation and encounter a problem. This is because you can claim back the money from your card provider in the event of a dispute. Make sure you pay the card off immediately, though, or you’ll be hit with high interest.

Using a debit card

Paying by debit card – and withdrawing cash in particular – can be a pricey business abroad. Most of the main bank cards bill you all kinds of fees per transaction and the exchange rates are often poor. However, the new online banks have travel friendly debit cards. The best ones don’t charge fees at all and the exchange rates can be reasonable, too. You can apply online for the accounts easily and if you just want to use them abroad, all you need to do is transfer over some cash.

This is a good idea if you want to take a mix of travel money but have a card available too for spending so you’re not carrying a load of currency around with you.

Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist. For more from Martyn, visit his website.