Britain in deflation: how to protect your holiday money
While many analysts predict that reducing prices will benefit UK consumers in the short-term, there are indications that a weaker pound resulting from deflation could negatively impact holidaymakers.
Nevertheless, if you have a holiday on the imminent horizon, you needn’t fret. Darren Kilner of FAIRFX has a number of suggestions for protecting your holiday money, and cut the cost of your break abroad in the face of deflation.
- Don’t pay in Sterling
Some merchants may give you the option to pay in sterling or in local currency; always select the latter. If a merchant converts the sum back into pounds, they will choose their own exchange rate – this will almost certainly be a poor one, and you will be paying for two unnecessary exchanges.
- Don’t change your money at the airport
Ignoring the need for holiday money until you’re at the airport is one of the easiest ways to pointlessly increase the cost of your getaway. Exchange rates can be over 10 per cent worse at airports than elsewhere and you could end up parting with over £100 for every £1,000 you exchange.
- Don’t use your debit/credit card without checking the fees first
Using your card abroad without checking associated fees could leave a significant sting in your wallet – many cards will have a poor exchange rate, a transaction fee and other hidden charges. Check online for the best currency deals and make sure you understand your card’s fees before you travel, or cut the risk and opt for a prepaid currency card which allows you to lock in great exchange rates before you travel.
- Don’t take all your spending money in cash
Travel insurance typically only covers up to £250 of the cash you carry on holiday. If you’re travelling with more than this, it’s advisable to spread the risk by taking a prepaid currency card and take a back-up credit card just in case.
The cards can be topped-up online, or via mobile (both app and SMS). If you lose the card, you can cancel at any time using a 24/7 phoneline.