Five financial pitfalls to avoid when booking your 2018 holidays

Do not fall into travel money traps, such as buying currency at the airports and being hit with credit and debit card fees. Photograph: PA

But when making your arrangements, make sure you don’t fall foul of a holiday pitfall that could leave a dent in your pocket. Here are five tips to stop you spending more than you need to...

Find destinations where your money may go further

Travel money expert FairFX says choosing a destination with a better exchange rate could spell savings when it comes to forking out for accommodation, shopping and dining out.

FairFX says sterling has fared particularly well against currencies in Argentina, Nicaragua and Costa Rica over the past year, for example. Destinations such as Sri Lanka, Laos, Indonesia and Hong Kong are also generally offering UK travellers better value compared with a year ago.

Ian Strafford-Taylor, chief executive of FairFX, says: “If the Brexit trade talks have some positive momentum in 2018, then we may see sterling improve against the euro. However, if Brexit negotiations impact on sterling creating another rocky year, travellers may have to look further afield at destinations where countries have performed better in the long run.”

Don’t forget to plan how you buy your currency

“Regardless of your holiday destination, there’s plenty of steps to follow to make sure that when you want to buy currency, you get the very biggest bang for your buck,” Strafford-Taylor adds. “This includes considering exchange rates before you book, tracking rates so you buy when they’re at their strongest, as well as avoiding travel money traps, such as buying currency at the airports and being hit with credit and debit card fees.”

Don’t risk it by travelling without insurance

Travelling abroad uninsured can cost thousands if a trip goes wrong. According to the Foreign and Commonwealth Office, nearly three-quarters of people aged over-55 plan to travel abroad in 2018 and half of these have a pre-existing medical condition.

A European Health Insurance Card provides access to state medical care in the European Economic Area, but does not cover other costs, such as bringing the patient back to the UK, or additional accommodation costs in-country.

Don’t just assume you’re covered

Just because you have some form of insurance, don’t assume it will cover your particular trip without checking. Research from financial information business Defaqto shows that the level of protection for cruise holidays, for example, varies considerably. Only 58 per cent out of single trip policies and 61 per cent of annual policies it researched cover cruise holidays as standard.

Defaqto also found that only 12 per of single trip travel insurance policies it looked at cover winter sports as standard, while less than one in five annual policies include winter sports cover as standard.

Don’t forget to pack your insurer’s contact details

Take note of your insurer’s emergency phone number. That way, if something happens, you can call your insurer first for help.