Top financial tips for gap-year travellers

As the exam season comes to an end, thousands of young Britons are set to head to far-flung locations on their gap year.

While this is bound to be an expensive business, the cost can be cut down considerably with a little financial planning, allowing travellers more money for that indispensable taxi home from the club.

And to make things run as smoothly, or cheaply, as possible, financial comparison service Moneysupermarket.com has compiled tips for those heading overseas.

"There are certain steps which travellers can take ahead of their venture to ensure they make the most of the financial products available to them," said Stuart Glendinning, managing director of Moneysupermarket.

"Many of these tips may sound menial, but it’s vital they are carried out or researched ahead of the trip to ensure you are in the best financial position whilst away.

"Failure to do so could mean having to cut the trip short or being stranded with no money, which could not only be distressing, but also very dangerous."

Moneysupermarket's top tips

Savings
While jobs abroad will help fund many travellers' trips, savings are useful for the initial flights and as an emergency fund.

Moneysupermarket points to the ICICI Bank; offering 5.15 per cent on its HiSave account with a minimum deposit of £1.

People planning ahead for summer 2007 could look to regular saver accounts, with many offering great headline rates.

Overdrafts
Gappers who have just left university will probably still have a student bank account with a generous overdraft. This normally drops over a set time period after graduation.

But prospective travellers with a good track record might be able to stop this from happening or even get their bank to extend their overdraft limit - if they ask nicely.

Debit cards
Most banks, including HSBC and Barclays, charge people for using their cards abroad (typically 2.75 per cent) for purchases and cash withdrawals.

Nationwide is the only major provider not to levy this charge, but it does join in with other banks in charging for using a cash machines overseas, Moneysupermarket points out.

Travellers should also check to see if banks can provide replacement cards in other countries, which could prove vital in an emergency. Gappers are also advised to keep their card's emergency telephone number close to hand, in case internet access is not available.

Credit Cards
With interest rates as high as 17.90 per cent, travellers should only use their credit cards in an emergency. Card use abroad tends to incur foreign exchange fees and ATM withdrawal fees. Additionally, if the card is not repaid in full, cash taken out will be subject to a higher rate of interest and interest is charged from day one on the cash withdrawal.

Pre-pay
Pre-pay cards could become an necessity, as they allow people to travel without taking cash with them and are useful for people unwilling or unable to carry credit or debit cards.

Budget-conscious gapers might also like the fact that it is impossible to go overdrawn on the cards.

But some of the charges can be heavy, and it is important to know what these are.

Mobile Phones
Choice of mobile phone network makes a huge difference to the cost of calling or texting from abroad.

A ten minute call from Australia to a UK number could cost anywhere from £13 to £7.50.

Travellers making four calls home and sending 40 texts to the UK a month could save £288 by using T-Mobile rather than Orange, Moneysupermarket points