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By Julia Kukiewicz Staff Writer
Monday, 28 April 2008
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How the weak Pound will sting you in Europe this summer
How will expensive Euros affect you?
Last summer one Euro was worth around 66p. This summer it’s more like 80p.
That means more spending on your holiday treats - here’s a rough guide to what that will mean…
Dinner for two in Paris - 50€
• Last Summer: £33
• This Summer: £40
An Espresso in Rome – 3€
• Last Summer: £1.98
• This Summer: £2.40
A day’s jet ski rental in Mallorca – 80€
• Last Summer: £52.80
• This Summer: £64
A beer in Berlin – 6€
• Last Summer: £3.96
• This Summer: £4.80
A two day ticket to Rock Werchter in Belguim – 165€
• Last Summer: £108.90
• This Summer: £132
Best Credit Cards for Travelling
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WITH the pound at an all time low against the Euro just as the colourful holiday brochures are starting to drop through the door, the forecast looks gloomy for our summer holidays in Europe this year.
Hovering at around 80p, a single Euro will this year cost 14p more than it did last summer.
The Association of British Travel Agents estimates this will add as much as £300 more to the average family holiday.
While this is unlikely to totally scupper your two weeks in Lanzarote, it’s a significant amount to be down by before you even get to Gatwick, so anything you can do to claw some of it back is worthwhile.
So we’ve pulled together the top 7 ways you can cancel out the effects of the weak Pound on your European holiday wallet this year.
1) Fly cheaper – or free - with an Air Miles credit card
There’s something satisfying about knowing that you’re saving on your holiday costs as you stock up on toilet paper at Tesco.
Lloyds TSB, American Express, CitiBank and Tesco all offer so-called Air Miles credit cards which allow you to earn ‘air miles’ just by spending on the card.
There are a number of different air miles schemes (you can compare the best air miles credit cards here), but they all work in roughly the same way, offering free or reduced cost flights (as well as other travel related discounts) as a reward for spending on the card.
With the American Express/British Airways credit card this works out at 1 BA mile for every £1 spent.
With the Tesco Clubcard credit card, 250 Clubcard points (the lowest redeemable amount) is equivalent to 60 Airmiles or 600 BA miles.
A flight to Paris requires 9000 BA Miles or 750 Airmiles.
The problem with some of these ‘air miles’ credit cards is that you have to save up enough air miles to buy a full flight, and even then they can often only be redeemed against selected flights.
With the Easyjet Credit Card, however, your rewards are redeemed against your next Easyjet transaction.
You get 1 mile on any UK spend, 2 miles on any overseas spend (although a foreign transfer fee applies) and 3 miles on whole flight transactions with easyJet.com.
What's more, EasyJet are currently offering £40 off your next flight just by signing up to the card. You can read more about, and apply for, the Easyjet credit card here.
Don’t forget, some credit cards also offer you amazing amounts of extra miles when you open an account.
After spending £250 within 3 months of activating your EasyJet credit card you'll get 4000 miles – the equivalent of a £40 flight.
While the Lloyds TSB/American Express duo card offers an amazing 6000 BA miles with your first transaction. That’s almost enough for a flight to Paris!
2) Save on travel insurance by using the right credit card
Travel insurance is another necessary financial evil whether you’re jetskiing in Marbella, or watercolour painting in Provence.
But it doesn’t necessarily have to cost you anything.
With some Barclaycards and the Morgan Stanley Goldfish i24 credit card you get comprehensive travel insurance when you purchase the holiday using the card - another great way to save as you spend.
The Goldfish i24 credit card offers full annual multi-trip travel insurance while the Barclaycards offers insurance for a single trip of up to 21 days for five people.
It’s important not to confuse these policies with Travel Accident Insurance which many credit cards provide.
Accident insurance is a useful extra but it’s never a substitute for a full insurance policy.
3) Only get the insurance you need
Whether or not you get your insurance for free with one of the cards mentioned above, or you buy it yourself you want your insurance to prepare you for any eventuality.
But realistically most of travel policies won’t have to cover war zones or base jumping.
So, make sure you don’t overspend on travel insurance by working out what you will really need.
£20 million worth of medical cover sounds impressive but most experts agree that cover up to £2 million is about as much as you’ll ever need.
If you take more than a fortnight’s holiday, a year annual travel insurance will probably save you money in the long term.
Getting insurance as a couple or a family is also an easy way to save.
As an individual expect to pay around £25, £30 with winter sports cover, for annual multi-trip insurance and about £10 more than that for a couple or a family.
Bear in mind that once you get above 75 the cost will jump sky high – finding a policy under £100 will be a challenge.
4) Avoid hefty fees when using your credit card abroad
Conventional holiday wisdom is that it’s cheaper to splash out on plastic abroad than to withdraw cash from a foreign ATM.
This is true up to a point; credit cards usually charge around 2.5% of the amount withdrawn with a minimum of £2.50.
This applies to most debit cards as well as credit cards.
However, some credit card issuers also charge you for using your credit card in shops - spend on a Halifax, IF, RBS, NatWest or Lloyds TSB debit card and you pay a fee every time.
Make sure you check your credit card’s small print before you go.
Alternatively, you could get a Nationwide Flexaccount card and draw money from any ATM for free or a Saga Platinum credit card which offers 0% commission on transactions in Europe.
Even better, the Post Office Classic credit card will not charge you any transaction fees when you use the card abroad, Europe or elsewhere.
And just in the nick of time, Abbey’s Zero credit card waives all cash withdrawal and foreign transaction fees for the first 6 months. That will see you through to the end of the holiday season.
5) Keep on budget with a pre-pay card
Another great way to make sure that your margaritas in Malaga don’t add up to a financial headache is to apply for a Pre-Pay credit card.
A pre-pay credit card is a bit like a travellers cheque, a debit card and a credit card all rolled into one: you can use it like a credit card, but only spend the amount of money you have loaded it
with (it offers no credit or overdraft).
Like taking cash or travellers cheques you know you can’t go over budget.
Even better, if you take out the Post Office’s pre-pay card you don’t pay for foreign transactions anywhere and aren’t subject to exchange rate changes.
You can even top the card up in an emergency, and the rate at which you load the card with money is the rate it stays for that amount, guarding against any further fall in the value of the Pound.
6) Know your Luggage Charges
It’s more important than ever to know your luggage allowances before you travel as it gets more and more difficult to take hand luggage and excess charges continue to rise.
Those flying budget this year will have the biggest problems.
Easyjet now charges £10 (or £5 online) for each bag you check in. The only free baggage allowed is your rather tiny hand luggage (55x40x20cm).
Ryanair’s maximum of checked luggage is just 15kgs and Easyjet and First Choice’s 20 kg.
This rises to 23 kg when you fly with British Airways, Virgin, BMI or Air France.
When you fly with Ryanair, Easyjet or British Airways you can save by pre-booking bags online with your tickets.
Excess is charged by the kilogram and the more exotic your destination the more you’ll have to pay.
Ryanair charge £7.50 per kg, Easyjet, £6 per kg and British Airways £24 a bag when you book online.
If you’re travelling with a baby remember that Ryanair, Easyjet BMI baby and Flybe don’t give infants a baggage allowance.
7) Call Home for Less
Top up on holiday smugness by calling home from the beach, without it costing you the earth.
The easiest ways to save are by texting rather than calling when you can, it’s always cheaper, and switching off your voicemail which always gets exorbitantly expensive once you leave the UK.
All the major networks offer standardised call plans in the Euro zone although for some – O2 and Vodaphone, for example - you have to request this service.
Some networks charge you by the minute for making and receiving calls.
For example, O2’s My Europe scheme charges 35p/min to make calls and 18p/min to receive them while Three’s standard EU roaming package charges 25p/min to make calls and 10p/min to receive them.
Other networks, like Vodafone, charge a connection fee on top of your UK call charges (75p on Vodafone Passport) and a flat fee to receive a call (also 75p on Vodafone Passport.)
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