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Don't give up on your dream holiday Do the constant bad news stories about the credit crunch make you feel like escaping to a beautiful beach in the sun? New research from the Association of British Travel Agents (ABTA) shows many of us plan to do exactly that - despite the depressing economic outlook.
The survey found that people were planning to spend an average of £630 each on their holidays this year, which is more than the average in 2008. Follow these tips and you may be able to join them.
Know what you can afford
Be realistic - there's no point aiming for Caribbean luxury if your budget will only stretch to a package on the Costas. Work out how much you can comfortably afford and remember to include spending money, including meals and drinks if you're not going all-inclusive.
If you need to borrow to fund your time in the sun, take a look at your credit report before you book. This personal history of your credit accounts - such as mortgages, cards and loans - shows what you owe and how well you're managing repayments. If you're already struggling, it's unwise to take on more debt.
Choose the right destination
Longer haul destinations are good value because they are outside the Eurozone and often have favourable currency rates. Popular countries such as Turkey, South Africa, Egypt, Mexico and Thailand may involve a relatively expensive flight but are cheap once you're there.
Closer to home, countries that don't use the Euro include Denmark, Sweden, Norway, Croatia and the Czech Republic. For ski trips, try the East European resorts, like Bulgaria, Romania and Slovakia, which are much less expensive than France, Austria or Italy.
Play your cards right
Many credit and debit card providers impose charges on foreign currency transactions, so do your research and find one that doesn't. When you apply for it, the lender will look at your credit report as part of a process of assessing whether you can afford to repay what you borrow.
It paints a picture of your credit history that helps lenders to decide whether to make you an offer and what interest to charge. It's a good idea to check it before you make any new applications to ensure all the information it contains is up to date and accurate - you can see your Experian credit report for free.
Get a good package
Package holidays are almost always the cheapest option and many companies are offering free places for children to a wide variety of destinations this year. Others are also slashing deposits on summer breaks for 2009.
Cruises are increasingly good value and have the benefit of including all your costs in one package, so you know exactly how much you will spend.
Put safety first
Book through a reputable agent or tour company. They should be ATOL (Air Travel Organiser's Licence) bonded and also be members of either ABTA or AITO (the Association of Independent Tour Operators).
Use your credit card to pay the first £100 of the cost of your holiday or flight. That way, your expenses are covered by the card company, up to £30,000, if the travel firm or airline go bust. You can pay for the extra any way you like.
Book early
This will give you time to do the necessary research on your chosen destination but also get the pick of the deals - last-minute offers may not be so thick on the ground these days, as travel operators have reduced the number of holidays they are offering, so the later you leave it, the less likely you are to get what you want.
Remember that you'll get cheaper deals off-season and if you travel mid-week.
Get ready to haggle
Haggling is no longer reserved for markets in hot countries -hotels will be competing for customers so you're in a strong position to negotiate prices or get extra nights at a reduced rate.
Plan ahead
Research the cheapest routes to and from the airport or, if you're driving, pre-book your airport parking, which can halve the cost. If you're travelling abroad more than once this year, you'll save money by taking out annual travel insurance and if you're visiting exotic locations get your jabs done at your local GP clinic. They don't normally charge for common vaccinations.
Don't phone home
Using a mobile is much more expensive abroad, so check with your provider to see if they offer any international roaming packages.
It may be worth changing to a cheaper provider if you're coming to the end of fixed deal or you currently have a pay-as-you-go phone. Mobile operators check your credit report before deciding whether to accept your application, so it's wise to check it too. "If you look at your credit report regularly, it will help you keep on top of your finances and enable you to sort out problems before they affect your ability to borrow," says Darryl Bowman, director of the online credit monitoring service CreditExpert.
Stay on the money
Remember to tell your bank and credit card issuer that you'll be abroad and where you'll be - some of them may suspect a fraud if they suddenly see a flurry of transactions in a foreign country and block your account. Don't buy your currency at the airport because it's almost always the most expensive option.
Your best bet is to pre-order it over the Internet and pick it up an airport bureau de change. When you're abroad, keep a close eye on the exchange rate to ensure you always get the best deal in hotels, banks and on card transactions.
Cap your spending
You can't spend what you don't take, so you could consider loading a prepaid card with your holiday money, using a debit card or taking cash - although that could be a security risk.
If you keep credit cards in the safe you can use them in an emergency but won't be tempted in the shops. Keep all your receipts so you can reclaim VAT if you're out of the EU.
Finally, remember to check your credit report, bank and card statements when you return, to be sure that there are no suspicious transactions and your accounts haven't been misused.
Other top tips include:
• Shredding sensitive documents on the ten most wanted list before you bin them
• Leaving important documents, such as passports and driving licences, at home in a safe place, unless you really need to carry them around
• Redirecting your post for at least a year when you move home
• Installing a secure mailbox if your post could be intercepted when it's delivered
• Cancelling unused accounts that might be hijacked by an ID thief
• Registering to vote at your current address, so a criminal can't register elsewhere in your name and use it as proof of residence.
To view your personal credit information that lenders are currently basing their credit decisions on, apply now for a free online credit report. Click here for a free 30-day trial and a free copy of your Experian credit report
