Hot Features
Premium
Trade smarter, not harder: Unleash your inner pro with our toolkit and live discussions.
Holidays can already be quite pricey, so it is handy to learn some tips to save money and find the best way to pay and the right visa for your holiday.
It’s wise to plan ahead of your holiday to make sure you get the most of your holiday. Knowing the best way to pay abroad can be just as handy as knowing what kind of travel documents you will need. Where you go on holiday will be a factor when choosing the most ideal way to pay. It also affects what kind of travel document you require. A holiday to a place like Cuba will require more payments made in cash, and a Cuba visa is necessary to get there. Whereas a trip to New York City means numerous small transactions on a card, and to travel there you’ll need to apply for a USA ESTA.
Travel Credit card
Most daily credit and debit cards work fine at home, but abroad, each little transaction can amount fees and exchange rates that can fluctuate daily. The beauty of these travel cards is that most of these fees are eliminated. The only fee that will still apply with almost all of these cards is an atm withdrawal fee. Therefore, these types of cards are ideal on holidays where you don’t need to withdraw a lot of money with the card.
Also, consider the interest accumulated if not paid in full. Not paying in full means what you may have saved in transaction fees goes to interest payments. One more drawback is that you can’t control the fluctuation in exchange rates. Usually, the card applies the exchange rate of the day the transaction is processed. If the purchase was made on a day when the exchange rate was better, but not processed until 2 days later, at a slightly less ideal rate, then it can be annoying.
Prepaid Cards
To some, an exchange rate is something that sounds great, and prepaid cards that offer this feature can be a great option.
If your credit isn’t good enough, a these cards are a good way to save money on fees. Many travellers find it important to not have cash on them while they travel for convenience and safety purposes. But if you can’t or don’t want to apply for a credit card, this is an excellent option.
These cards are considered electric money, and the card providers are legally required to keep your money ringfenced in an actual bank. Find out where the money is kept with the card you are getting. If it’s a recognized bank such as Barclays, then it is safe to assume that should something go wrong, your money is safe. If you do not recognize the bank name, it is wise to do some research first on that bank before ordering.
Most companies ask for a fee to open the card of about £5 to £10. However, some of these cards may also have a shorter expiry date, so you have to pay that fee again shortly after. Some cars also charge inactivity charges. Putting money on a prepaid card is considered a withdrawal fee by credit card companies and, legally, debit cards are not allowed to charge this fee. So if you end up having to fill up the card, make sure to use your bank debit card instead.
When withdrawing money in another country, you will be asked if you want to withdraw in pounds or in the local currency. Always choose the local currency whenever possible, as the exchange rates are slightly better.
Debit Card
Sometimes you have to withdraw money while on holiday, and withdrawing with your debit card is a much better option than using a credit card to withdraw money. This is because the transaction fees for withdrawing money with a credit card are much higher, and can affect your credit negatively. In contrast, using a credit card or prepaid card can be a better option because if you make numerous small transactions because those fees quickly add up with a debit card.
Some debit cards offer travel perks. Just like travel credit cards, they offer fee-free spending and fee-free withdrawals. The drawback is that there will also be a credit check, and you must open a new bank account to get the card. Some of these cards will do a soft check, which won’t show up in your credit report. It’s wise to look at what the limits are on withdrawals and what the maximum per day is.
Where are you going on holiday?
Also consider where you’re going on holiday. For example, when travelling to the USA visiting certain cities, you’ll likely be making card transactions, perhaps several a day, and therefore, go with either the prepaid card or travel credit card. Set apart time to look up different card options while applying for your USA ESTA, which is necessary when travelling to America. If travelling with your family, a good way to save time is by applying for the USA ESTA as a group. The USA ESTA can be applied for easily online as a group because you only have to fill in key details once instead of doing so for each ESTA. Most UK citizens meet the requirements of a USA ESTA, which is much faster and easier to obtain than a regular visa. Plus, with a USA ESTA there is no need to go to the embassy.
Although you are more likely to make lots of small and large transactions daily in cities throughout the USA, small islands like Cuba, or countries in the east might require you to use their currency and make mostly cash transactions. In which case, cash withdrawals are the handiest way to pay on holiday. Find out whether most local restaurants and shops prefer payment in dollars or other currency instead. For example, many shops and restaurants in Cuba would much rather accept dollars than the Cuban peso. Make sure while you apply for your visa, you also see what the most common method of payment is in your desired destination.
