With summer getaways in full swing, a little planning can help you get more value from your holiday budget and avoid unnecessary fees while you’re away.
Whether you’re heading to the Mediterranean, a city break in Europe or a long-haul adventure, the way we spend money abroad has changed dramatically over the last few years. Contactless payments, digital wallets and travel-friendly banking apps have made it easier than ever to pay overseas.
However, hidden fees, poor exchange rates and unnecessary charges can still catch holidaymakers out. Here are seven simple ways to help your holiday money stretch further.
1. Check what your bank charges for overseas spending
Before you travel, take a few minutes to review the fees associated with your debit and credit cards.
Some providers charge a foreign transaction fee every time you make a purchase abroad, while others add extra charges when you withdraw cash from an ATM. These fees can quickly add up over the course of a holiday.
If you’re planning a trip overseas, it may be worth comparing the costs of the cards you already have and considering whether a travel-friendly option could save you money.
2. Be cautious when withdrawing cash abroad
Although many destinations now accept card payments almost everywhere, there are still occasions when you’ll need cash.
If you withdraw money from an overseas ATM, watch out for:
- Local ATM usage fees
- Foreign transaction charges from your card provider
- Currency conversion fees
- Interest charges if you’re using a credit card
Where possible, use a debit card that offers competitive overseas usage terms and avoid making frequent small withdrawals. Taking out larger amounts less often can help reduce cumulative fees.
3. Don’t exchange more currency than you’ll need
Many travellers return home with unused notes and coins that end up sitting in a drawer for months or even years.
Before exchanging money, think carefully about your expected spending patterns. With contactless payments now widely accepted around the world, you may need less cash than you would have done a decade ago.
A rough spending plan before you travel can help you avoid exchanging too much and reduce the risk of paying conversion fees twice, once when you buy the currency and again if you need to change it back.
4. Compare exchange rates before you buy
Not all currency providers offer the same rates.
Airport bureaux de change remain convenient, but they’re not always the most competitive option. Shopping around before your departure can often help you secure a better exchange rate.
Many providers now allow you to order foreign currency online and collect it before you travel, combining convenience with the opportunity to compare rates in advance.
Even small differences in exchange rates can have a noticeable impact on your holiday budget, especially for larger amounts.
5. Choose local currency when paying by card
When using your card abroad, shops, restaurants and ATMs may ask whether you would like to pay in pounds sterling or the local currency.
While paying in pounds can seem appealing because it shows you an immediate UK price, it often involves a process known as Dynamic Currency Conversion (DCC). In many cases, the exchange rate used is less favourable than the one your bank or card provider would offer.
Choosing the local currency can often provide better value and greater transparency.
6. Let your bank know you’re travelling
Fraud prevention systems have become increasingly sophisticated, but unusual overseas spending can still occasionally trigger security checks.
Check whether your banking app allows you to record your travel plans before you leave. This can help reduce the risk of legitimate transactions being flagged as suspicious and give you peace of mind while you’re away.
It’s also worth ensuring your contact details are up to date, so your bank can reach you quickly if necessary.
7. Make the most of digital wallets and banking apps
Modern travel is increasingly digital.
Services such as Apple Pay and Google Wallet allow many travellers to make secure contactless payments abroad without needing physical cash. Banking apps can also help you:
- Monitor spending in real time
- Track exchange rates
- Freeze and unfreeze cards instantly
- Receive transaction alerts
- Manage multiple accounts while travelling
Keeping a close eye on spending while you’re away can help you stay within budget and avoid surprises when you get home.
Enjoy your holiday without overspending
Holidays should be an opportunity to relax and create memories, not worry about unexpected charges or poor exchange rates.
By planning ahead, understanding how your cards work overseas and keeping a close eye on fees, you can make your holiday budget go further and focus on enjoying your time away.
A little preparation before you travel could make a significant difference to how much value you get from your spending once you arrive.
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