After enduring two years of restrictions, millions of people are eagerly awaiting a hard-earned summer getaway. But with airports in chaos and rampant inflation, many holidaymakers risk going seriously over budget at a time when they can least afford it.
Here, Telegraph Money breaks down the most common financial pitfalls holidaymakers fall into and how to avoid them.
Use the right card
Every year, UK holidaymakers spend £2.7billion on currency exchange fees, according to travel card company Currensea. Some of this is consumed by ATMs. Analyst Moneyfacts estimates that withdrawing £250 from an overseas ATM costs £11.88.
To avoid unnecessary costs, plan your expenses in advance and find the best rates with an online comparator. Using your regular bank card abroad could leave you with high – and unnecessary – bills, as many incur transaction fees of up to 3pc.
To avoid them, take a no-fee travel card, such as the Halifax Clarity credit card or Virgin Money M Plus. Pay in local currency, as your card provider’s exchange rate will likely be higher than the retailer’s.
If you don’t want to open a new checking account, a prepaid travel card might be your best bet. But the worst will charge you between £2 and £5 per month just for holding the card. And beware of other fees such as redemption fees. Currensea has found that travelers will return home with an average of £55 unspent on their prepaid cards and may have to pay up to £10 just to get their own money back.
Get the right insurance
Being on the wrong policy could cost you dearly, either because you overpaid for options you don’t need, or because your cheap insurance offers very little protection.
Specialist travel travelers should take extra care to ensure they are adequately covered, said Anna-Marie Duthie, of financial researcher Defaqto. “If you’re going on a cruise or a ski vacation, it’s important to choose a policy that includes coverage for those types of trips,” she said. According to research by Defaqto, 88% of annual policies do not protect against the risks specific to these trips as standard.
Most policies provide protection if you miss your flight through no fault of your own and have to pay for another one. But Ms Duthie warned you may have to foot the bill if you miss a connecting flight with another airline due to delays. “Under these circumstances, more than a quarter of annual travel insurance policies offer no coverage,” she said.
Watch roaming charges
Since Brexit, almost all major mobile phone companies have reintroduced data roaming charges in Europe. EE, Three, Sky Mobile and Vodafone now charge customers £2 a day; for a family of four on a two-week vacation, that would be over £100.
O2, Virgin, BT Mobile and Smarty still allow free roaming, but that doesn’t mean you should switch providers just for the savings, as they may soon be jumping on the bandwagon. If you’re traveling for more than a fortnight, a package like EE’s £10 30-day ‘Roam Abroad’ pass might be cheaper. The most important thing is not to exceed your data allowance. Even streaming YouTube for just one minute will consume more than 3MB, according to Uswitch.
Reduce the cost of car rental
Global vehicle shortages have pushed up the cost of renting a car this summer. Although there’s not much you can do about it, you can save around £150 on your car insurance.
If your rental car is damaged, you must pay an excess to cover the costs, even if it is not your fault. It could be as high as £2,000. Many people fall into the trap of buying additional insurance with the car rental. But the average car hire company charges £189, more than five times the price of a policy from a specialist insurance provider, such as iCarhireinsurance.com, which charges £35.48 for a week’s cover .