Five tourist traps that will bust your holiday budget
The holiday season is upon us, and most of us will have already booked our flights and hotel. Finding a cheap holiday deal is easier than ever these days, with just a click of the mouse.
But the savings you make on finding the cheapest holiday package can easily disappear once you step off the plane. Read on if you want to avoid falling into this trap.
Hiring a car
A hire car is a handy way of getting about on holiday - but you can pay between 20% and 50% less if you book your vehicle before you go, according to lastminute.com.
The time of year can also have an effect on price: book your car hire at the last minute during the peak holiday season and it could be 40% more expensive than at less busy times. Comparison websites - such as travelsupermarket.com or carhiremarket.com - can help you find the best deal.
Of course, it will be easier to pick up and drop off the hire car at the airport. But, depending on the size of the airport, the selection of cars could be limited and it could cost you more than travelling to a city-centre location.
Most car hire companies will also give you the option to include a child seat with your car; however, these cannot be guaranteed, so you may get there and discover they are out of seats. Play it safe and bring your own - but check with the company to make sure your model of car seat will fit their make of car. Also, be aware that airlines might charge you extra to carry it with you.
According to travelsupermarket.com, the overall price of exchanging money at an airport, including exchange rates and commission fees, is between 3% and 8% more expensive than on the high street and between 8% and 11% more expensive than online best-buy deals.
If you must get your money at the airport, use a bureau with an online ordering service such as Travelex or Thomas Cook, order your money beforehand (same-day ordering is available) and collect it at the airport. This way you'll still receive the internet rate as opposed to the airport rate.
Shop around for the best exchange deal. Website compareholidaymoney.com will give you the best exchange rates and show the bureaux to avoid. At the Post Office, for example, £100 will get you €109.16, whereas British Airways will give you just €105.69 (figures correct at 09/06/11).
Be wary of 'commission-free' exchanges, as often the seller will use a poorer exchange rate to make up for the loss of commission.
You should also consider the 'buy-back' rate. If you're likely to bring money home with you and don't want to hang on to it for the next trip, then check if your seller will buy it back for free.
If you're changing money while you're abroad, don't just trust the rates offered in street bureaux - always try to check exchange rates online wherever possible.
Bob Atkinson, spokesperson for Moneysupermarket, warns: "Never, ever change your money at a hotel - and stick with prepaid cards to get the best deal." He adds: "The only way to get a good deal is by asking exactly how much you'll get back for your sterling."
After perusing the artworks in the Parisian galleries or shopping in Milanese boutiques, you'll feel in need of a pick-me-up. But stopping for a coffee near the Eiffel Tower or a bite at the Piazza del Duomo will cost a small fortune.
Restaurants and bars in central tourist areas are always prohibitively expensive - but just a few minutes' walk away, you'll find a café that charges half as much.
For example, a baguette outside the Empire State Building will cost around £10, but a few streets away you can buy one for about £3.
If you use a cashpoint abroad you could be in for a nasty surprise. For example, Barclays will charge you 2% of the amount of the transaction.
However, the fee doesn't apply if you use a Barclays cash machine or any cashpoint belonging to its global alliance partners, including Bank of America, BNP Paribas, Deutsche Bank, Scotiabank, Westpac and Absa.
If you're with Bank of Scotland and withdraw from a cashpoint, you'll be charged a conversion fee of 2.75% of the transaction and a fee of £1.50 for each payment. Meanwhile, at Santander, if you use its visa debit card or cash card to withdraw cash abroad, you'll be charged a cash handling fee of 1.5% of the value of the transaction.
The average fee for withdrawals is between £2 and £2.50 for each transaction; also bear in mind you won't know the exchange rate the bank is using.
Prepaid currency cards tend to have cheaper fees for cash withdrawals (from £1 to £3), while some, including the Caxton FX prepaid card, don't charge anything.
When you first touch down after a long flight, the last thing you want to do is to wait around for a train or bus. But remember, taking a taxi could quadruple your costs.
For example, a taxi from Stockholm Arlanda airport to the city centre will set you back around 490SEK or around £48, but if you catch the bus from outside the airport, it will cost just 110SEK or around £11. Alternatively, you could take the Arlanda Express train for 240SEK (£23). It only takes 20 minutes, so it's much quicker than a taxi.
The best way to avoid these - and most of the other added costs - is by doing your research before you leave for your much-anticipated summer break.
A debit card that works in the same way as a pay-as-you-go mobile: you top it up with cash and then use it just as you would a normal debit/credit card. Although some are badged Visa and MasterCard, pre-paid cards are not a credit card; you can only spend what you load. Prepaid cards are aimed at people who might not traditionally hold bank accounts – children, teenagers, people with poor credit ratings, migrant workers, and benefit claimants – and there are no credit checks on the applicant.
The difference between two currencies; specifically how much one currency is worth relative to each other. For example, if £1 is worth $1.50, converting sterling to US dollars, the exchange rate is 1.5. Converting dollars to sterling at those levels, the exchange rate is 0.66, so $1 is worth 66p. There are a wide variety of factors that influence the exchange rate, such as a country’s interest rates, inflation, and the state of politics and the economy in that country.
Issued by a bank as part of a current account and, in a nutshell, serves as electronic cash. Unlike a credit or charge card, where you get an interest-free period before you have to settle the bill, the funds spent on a debit card are withdrawn immediately from your current account. Unless you’ve arranged an overdraft, if you don’t have the cash in the account, you can’t spend it.