cookie usage
We use cookies, some of which are essential to make our website work. For us to use our non-essential cookies, we need your consent. You can consent by accepting all or alternatively, manage your cookies at any time. For more information, read our cookie policy.
5 min read
Be smart with your money so you can make the most of your break.
Our expert panel reviews all content. Learn more about our editorial standards and how we operate
The summer holidays have arrived and it’s natural to start dreaming about sun-drenched beaches in exotic destinations. But, before you book a last minute escape and pack your bags, do you have your finances in order?
Paying for an expensive holiday on a credit card might feel like a quick-win, but it can put unnecessary stress on your finances in the long run. After all, a looming credit card bill could turn a dream holiday into a nightmare.
Instead, let’s look at some smart payment strategies that support your holiday budget, and give you peace of mind that you’re making the most of your money.
The best way to pay for your summer holiday is to save up beforehand. If you haven’t done so already, then make a plan for next year by setting aside a small amount of money each month in a savings account. Many banking apps offer savings pots, which means you can separate your money for each savings goal. If you save £50 a month for a year, you’ll end up with £600, which can then be used on a last-minute getaway deal.
If you prefer to be more creative with your savings, then try a savings challenge. These challenges are perfect for creating a holiday fund and can be adapted to suit your budget. For example, try the no-spend challenge where you remove non-essential spending for a specific timeframe. This could be for a weekend or even a month, but you’ll be surprised with how you can save with some discipline and determination.
When you have your savings in order, you can reach for your credit card. In the UK, credit card purchases between £100 and £30,000 have Section 75 protection. This means if something goes wrong, your credit card provider has a legal responsibility to help. Some credit cards also come with rewards and cashback offers, so you could effectively earn an extra discount.
But remember, always use a credit card wisely and pay off the balance in full using your savings pot as this will avoid any fees or extra charges.
Top tip: Sort your travel insurance as soon as you’ve booked your holiday, so you’re covered if something goes wrong before you leave. You can also compare online providers to get the best deal.
If you’re paying for your summer holiday, consider your expenses beyond the initial booking. For example, what budget will you need for meals or excursions while you are away?
So, always try to get food included in your main booking. This could be breakfast or all inclusive, but any extras will dramatically reduce your holiday spending. In terms of activities, do your research at home to find a deal and lock in a competitive rate. It also means you’ll have less hassle and decision-making during your trip.
Some debit cards come with a fee if the card is used abroad, so double-check the terms and conditions with your provider before you travel. If there are fees attached, explore travel-friendly debit cards which offer fee-free spending and have competitive exchange rates.
These cards are great for day-to-day spending abroad and most come with mobile apps so you can easily keep track of your budget. Remember to order the card a few weeks before your trip so you aren’t forced to use a debit card with fees.
Top tip: Always choose the local currency when you use your debit card abroad as then you’ll get a better exchange rate.
If you would prefer to use a travel credit card rather than a debit card, then explore credit cards that come with no foreign transaction fees and offer fraud protection for extra peace of mind.
A travel credit card can be used for purchases but try to avoid cash withdrawals as this can come with fees at the ATM. Then, pay off the balance in full to avoid any interest charges.
Finally, don’t forget to take some cash with you. Although we are living in an increasingly cashless world, there’s still situations where you might need some cash to pay for your holiday spending.
This is normally for small purchases at local markets or in remote areas, so having some cash to hand is more convenient. Remember to purchase the local currency before you travel to get the best exchange rate, as the airport normally offers poor rates.
Nicola joined the team in 2024 as a business operations executive, and her expertise helps consumers to always find the best deal for their circumstances.
