RSS Feed

Related Articles

Related Categories

Budget wisely for a better gap year

11th August 2014 Print

With schools and universities out for summer and exam results looming, offers tips to help gap year travellers spend their money wisely and keep safe abroad.
Funding your gap year
Many people planning a gap year will be funding their travels through savings or money earned while abroad; however, a number will be looking for alternative ways to pay for their trip. Using a credit card such as Tesco Bank’s Clubcard Credit Card offers zero per cent on purchases for 19 months can help spread the upfront costs of your trip. As long as the outstanding balance is paid in full by the end of the zero per cent period, you could save around £460 in interest on a balance of £2,000 compared to using a card with an average APR of 17.36%.
Cards and cash whilst overseas
Changing money last minute at an airport bureau de change is the most expensive way to pay for your currency. Ordering cash online which can be delivered to your home, or pre-ordering it for collection at the airport, will unlock better exchange rates and make your money go further.
Credit/debit cards
Those wishing to use plastic abroad can travel safe in the knowledge that using a cardwhich isspecifically designed for overseas usage is the cheapest way to spend overseas. Using a credit card for ATM transactions abroad can be expensive as interest is charged daily, so it’s crucial you do some research and read the small print ahead of your trip to maximise your money. For example, Halifax’s Clarity Credit Card is free to use abroad compared to charges of up to 2.50 per cent on other credit cards. In terms of debit cards, the Gold Classic Account from Norwich & Peterborough Building Society is the best option for travellers compared to NatWest for example, its Select Account charges a transaction fee of 2.75 per cent alongside an ATM fee of 2 per cent or purchase fee of £1.25 per transaction.
If you are planning to use a credit card, paying off your purchases in full every month will ensure that you avoid any interest charges and a costly bill when you return.
Pre-paid cards
Rather than carrying large amounts of cash around, using a pre-paid currency card can serve as a great alternative to withdrawing cash abroad. Many offer competitive exchange rates on foreign currency and some come without the sting of withdrawal and purchase fees. The lack of credit facility on these products means you can't spend more money than you have, which will help avoid racking up lots of debt during a long trip. Pre-paid cards can also be topped up quickly online so if you run out of cash, they are a useful tool, and will put many parents’ minds at ease! Make sure you use a card which is designed for the currency you are using otherwise you could end up paying additional fees. The Global Traveller card from Caxton FX is a good option, and has no charges for cash withdrawals or purchases abroad.
Bob Atkinson, travel expert at said: “With a little forward planning, there is no excuse to pay over the odds for your foreign currency whether you choose to take cash or use a card. If you have more time to plan ahead, using a debit or credit card designed for overseas use is one of the safest and cheapest options as you have the benefit of using a PIN protected card.
“Online banking and mobile phone apps have made it easier than ever before to stay on top of your finances, so even the most intrepid explorer should be able to access their financial products and keep tabs on their outgoings, especially if they have taken out additional borrowing to fund their trip.”
Protection when abroad

Heading abroad on a gap year is an exciting time, and protecting yourself and your belongings may be the last thing on your mind. It is crucial, however, to have adequate insurance in place, and many insurers cater for the adventurous traveller with policies designed specifically for a gap year. Some providers will offer cover for sports activities, and paid or voluntary work within gap year policies, although these activities and levels of cover vary depending on the provider, so it is important to read the policy wording carefully for caveats and small print.
The cost of comprehensive insurance cover for the entire duration of your trip doesn’t need to break the bank. For example, twelve months worldwide cover from Insure & Go’s Backpacker Light policy costs £163.71 and provides the minimum level of cover that MoneySuperMarket recommends.
Bob Atkinson continued: “Buying a policy as soon as your trip is booked ensures that you are fully covered should you need to cancel your trip. Be sure to take time to read the small print of the policy to ensure you choose the right deal. A good policy covers for instances such as End Supplier Failure should you book your own trip rather than one that is ATOL protected.
“As well as suitable travel insurance, travellers should also make sure they have a valid European Health Insurance Card (EHIC) when travelling within the EU. This will entitle you to state healthcare at a reduced cost, or in some instances for free and will help you avoid a sky high bill should you need treatment. An EHIC card is only for travelling within the EU and is not a replacement for travel insurance.  Take a few minutes to read your policy wording to see what you are covered for under medical expenses and be sure to check for any exclusions. For example, we all like to have a drink whilst relaxing by a pool however, many policies will not cover you for medical claims should you be under the influence of alcohol.”