Holidaymakers waste massive amounts of money every year on charges that are easily avoidable.
Whether it’s cash withdrawal fees or uncompetitive currency conversions, a large chunk of your money disappears before you’ve even unpacked your bags.
We show you how to avoid the most common charges, freeing up money to spend on more important things – like sangria and Hawaiian shirts.
Bank charges
Did you know you can save as much as 5% simply by taking the right cards on holiday with you?
Most banks will hit you with a number of different fees when you spend on your debit or credit card while abroad. The two most common ones to look out for are foreign transaction fees (usually in the region of 2.75% - 3%) and cash withdrawal fees (1.5% - 2%).
Thankfully, it’s possible to dodge both of them. If you’re going to be putting your holiday spend on credit card, you can choose either a Nationwide or Abbey Zero credit card.
Neither will charge you any fees, but the Abbey card comes with a longer 0% offer on new purchases (six months), so it’s probably the one to go for.
If you’re able to pay your way on holiday without going into the red, then Nationwide’s current account is the card for you. Like the two cards above, you won’t be charged for accessing your money while abroad.
In all honesty, changing current accounts just for your holiday might sound like a bit too much effort for many. So a simpler, if slightly more expensive, option is the Post Office Travel Card.
This can be loaded with foreign currency, allowing you to bypass the foreign transaction completely. You will have to fork out £2 for every cash withdrawal, however.
Currency conversion
With the ongoing strength of the Euro against the British pound, many of the most popular holiday destinations are proving increasingly expensive. That’s why it’s essential you get the cheapest possible exchange rate on your currency.
The Post Office is your best bet, as it charges 0% commission and has branches pretty much every (well, for now at least).
Make sure you don’t leave it until the last minute and change your money at the airport, as they are ridiculously expensive, charging up to 2% commission per transaction.
Dynamic currency conversion
When using your card abroad, some retailers will offer to convert the price of goods from their domestic currency so that you pay for it in British pounds.
This may sound like a decent idea as it will help you avoid the foreign transaction fee, but agree and you could end up out of pocket, as the retailer will hit you with an extremely high exchange rate.
The best way to avoid this is to use a card that doesn’t charge you for foreign transactions – Nationwide, Abbey Zero or Post Office Travel – and pay in the local currency.
Travel insurance
While not strictly a charge, finding competitive travel cover is a great way to keep holiday costs down.
It may be cheaper than ever before, but there’s still a massive difference between the cheapest and most expensive policies on the market, so it’s important you shop around.
As the table below shows, the best single trip cover we could find for a 45 year old person travelling in Europe was £5, or three times less than the least competitive.
Keep in mind that the price of a policy will vary greatly depending on your unique situation, so this table should serve purely as a guideline. Using a price comparison site will help you find a competitive policy in a matter of minutes.
| Insurer | Premium |
| Columbus | £5.00 |
| Travel Insurance Web | £5.25 |
| Go Travel Insurance | £7.00 |
| Insure&Go | £7.05 |
| More Than | £9.92 |
| AA | £10.18 |
| Direct Line | £13.23 |
| Marks & Spencer | £16.04 |
| Churchill | £16.30 |
Cover for a 45-year old travelling between 20 May and 22 May. Includes baggage cover
