Make your money work for you during that dream holiday
If you are looking forward to a well-earned summer holiday this year, setting aside some time to plan your holiday money will be beneficial in the long run. Making sure you get the best exchange rates, ensuring that you have a back-up plan in case you overspend, and protecting yourself when abroad are every bit as important as booking the actual holiday itself.
It's a good idea to keep your eye on the exchange rates in the weeks coming up to your departure date, as rates can go up and down. You will also need to decide how you will take your spending money - and once you've done that decide which provider to use.
Ordering foreign currency before you travel:
Exchange rates can vary, so shop around for the best deals - travel agents, supermarkets and even the Post Office now offer a bureau de change facility.
Don't be fooled into thinking that 0% commission deals are the best, as in some cases the exchange rates have been adjusted to allow for this, so you could actually end up paying more.
Remember to check with your provider if they stock the currency that you need, as you may need to order it advance.
Avoid buying currency 'last minute' at the airport exchange desks, as this can cost you more.
Using ATMs on holiday:
Making a withdrawal from an ATM is generally the easiest and cheapest way to get cash abroad, as exchange rates are usually more favourable. Bear in mind that some card providers will charge you commission on these transactions, so check this out before you travel.
Another advantage is that you can budget your money better as you can take out money as you need it, instead of carrying around large amounts of cash.
ATMs can be targeted by fraudsters just as they are at home, so be extra vigilant when using them abroad.
A pre-paid card is one that you pre-load with cash before you travel and then use it like a debit card. You get the exchange rate on the day you load the card. There is usually a small up-front fee and some cards have additional operating charges. You can use them anywhere that you can normally use a debit or credit card, and the card is not linked to your bank account, so you have added peace of mind.
Taking a credit card on holiday can give you that added peace of mind that you have something to fall back on should you overspend, want to treat yourself, or have to deal with an unexpected cost.
If you are planning on taking a credit card on holiday, consider applying for one that is designed especially for overseas spending, as it could save you money. When making a purchase think about paying in the local currency as it could work out cheaper.
MoneySense is a free, independent programme by Ulster Bank for schools and parents covering topics including banking, borrowing, budgeting and running a small business. Find out more ways to make your cash work harder in Jill's column next week