Consumer champion Martin Lewis has issued some important advice to anyone planning to go on holiday this year.
The founder of MoneySavingExpert.com has offered tips on travel insurance and renting a car abroad as well as explaining the difference between EHICs and GHICs. Speaking on BBC Radio 5 Live, which can be heard as a podcast on BBC Sounds, Martin took listeners through some of the ways travellers can be caught out and end up spending more than they should on holiday.
The financial journalist also issued an important reminder about why you may need to renew your passport, even if it hasn't expired yet, reports CoventryLive. Below are his five top tips.
Read More: Travel expert urges holidaymakers to do this one thing when hiring a car abroad to save money
Travel insurance
The consumer expert's first piece of advice was to book travel insurance 'ASAB' – as soon as you book. This is because much of what you pay for with travel insurance is to cover you for anything that happens before your holiday that might stop you from being able to go away, such as needing medical treatment.
Martin explained: "There is no point in having travel insurance that you get the day before you travel if you've had it booked for months because you're just foregoing much of the cover and much of what you are paying for."
You can get travel insurance for a specific trip or pay for an annual policy. Martin said that if you pay yearly and your cover runs out in July, but you have a holiday booked for August, your insurance will still cover you if something happens before July that stops you going away in August. But you will still need to renew your insurance for another year to cover the trip itself.
For this reason, Martin advised that as long as your insurance is a reasonable price, it is easier to keep your annual cover with the same provider rather than switch, as otherwise you may have disputes between companies as to who covers something that happens at a certain time before you travel.
Debit and credit cards
“It's actually very easy [to use a card abroad] these days,” Martin said. “The cheapest way to spend abroad – there is one that beats all the rest. What you have to understand is, normally, when you spend on plastic, your bank or card provider gets a near perfect exchange rate on the day. So very close to the spot rate – the rate that is traded on foreign exchanges.
“However, most providers add what's called a non-Sterling exchange rate fee to it, which is normally around 2.75%. So the best way I can phrase this is if you were to buy something that cost £100 worth of Euros on that day at the spot rate, you would pay £102.75 for it.”
However, there is a way to avoid paying this extra fee. Martin explained: “With specialist overseas debit and credit cards and pre-pay cards, they do not add that non-Sterling exchange rate fee. So you get the same near-perfect rate that the banks do.”
There are a number of these specialist overseas cards, but Martin's “easy top pick” is the card from Chase bank. This is an app-based card that does not require you to switch bank accounts and doesn't do a hard credit check.
You get the near-perfect exchange rate, without the non-Sterling exchange rate fee, and you can withdraw up to £1,500 a month with no fee. And the best thing about the card is that it gives you 1% cash band on all spending, in the UK and abroad.
Martin says that it's “just unbeatable”. He added: “You are effectively, if you factor that cash back into the exchange rate, you are getting better exchange rates than the foreign exchange market.”
The Chase bank card is a debit card. If you want a credit card to use abroad, Martin recommends the Barclaycard Reward Visa card for new customers. It has the near-perfect exchange rate and a lower fee.
Check your passport
Most countries in the European Union require your passport to be valid for at least three months after the day you plan to leave the country. So even if your passport is still in date, if you are approaching its expiry date you may still need to renew it.
Furthermore, some countries, such as the United Arab Emirates (UAE), require that your passport is valid for at least six months from the day you enter the country. Martin said he knew of someone who had had to fly straight back to the UK after landing in the UAE because their child's passport did not have six months left on it.
Many countries also insist that your passport is not more than ten years old. Passports are generally only valid for ten years, but in the past, if you renewed before the expiry date on your old passport, you could have the extra time added onto your new one.
So if you renewed with six months to go before the expiry date, your new passport could be valid for ten years and six months. It is therefore important to check the issue date as well as the expiry date.
You need a GHIC
Before the UK left the EU, UK travellers to the continent would take a European Health Insurance Card (EHIC). This covered you if you needed treatment in a state-run hospital or GP practice abroad, meaning you would only pay as much as a local would. If the treatment would be free for a local, it would be free for your.
Since Brexit, the EHIC card has now been replaced by a Global Health Insurance Card (GHIC) for UK citizens. This was described by Martin's co-host Nihal Arthanayake as like the World Series of Baseball “which in fact isn't a world series at all”, as the GHIC doesn't cover any more countries than the EHIC did. In fact, it covers fewer as some European non-EU countries, like Liechtenstein, are not covered.
The GHIC works in the same way as the EHIC did, covering you if you need medical treatment abroad. If you don't have one when you travel, you can sometimes apply retrospectively, but it is far easier to get one in advance.
“It's absolutely crucial,” Martin said. “It can help mean that you don't have to pay the excess on your travel insurance. It means you can go and use a GP for free.”
He warned that GHICs don't last forever, and that five million go out of date this year. You should therefore check section 4B on your card to make sure it is still valid.
Martin also had another warning for those getting a new card. He said: “To get a new card, DO NOT just Google and click the links at the top. There are lots of shyster websites... which basically say things like, 'Hey, get fast-track GHIC!' or, 'Only pay £15!'. NEVER PAY!
“GHICs are free. There is no such thing as a fast track. These are just shyster websites who basically, you fill the details in on their site, they then charge you and they then fill it in on the official site.
“So you go to the GOV.UK or you go to the NHS's website. Make sure you're on one of those.”
Car hire
Martin said that hiring a car abroad is “pretty easy” and there are plenty of comparison websites you can use to find a good deal. However, he did warn that prices have gone up substantially since the pandemic. He said that you should book as far in advance as possible to get the cheapest rates and the most choice.
But his big word of warning was on insurance. Martin said that many car hire companies will use “scare tactics” to get you to pay for excess cover beyond the basic insurance you may already have. This would be to cover the excess you may have to pay if the car picks up a scratch.
This excess cover can be really costly. And if you refuse to get it, the company may demand that you pay a deposit of between £500 and £1,000. They will often only accept credit card for the deposit and it must be in the name of the person who booked the car.
However, Martin said that you can get separate, stand-alone excess cover that is about a tenth of the cost of what many car hire companies charge. This may mean paying £15 a week instead of £150.
The stand-alone excess insurance will cover the excess you would have to pay if the car gets a scratch. But, by not taking the excess cover from the company, you may still have to leave a credit card deposit, so this is something you should be prepared for.
Staff at the company may also give you an “ugly look”, Martin warned. He said that MoneyMaxim was a good comparison site for excess cover.
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