Cheaper spending, hotels, car hire and more: 10 tips to cut European holiday costs

This content originally appeared in the MSE weekly email on 18 March 2015.

This time last year one pound bought €1.19, now it's about €1.40 – the highest since 2007. So travel to Europe and things will seem much cheaper. Indirectly too, we should see the price of hotels and car hire tripping down, as the rate change filters through.

Here are 10 tips to make sure you max out their value.

1. Take 2 mins to check if you can get the cheapest way to spend abroad. 

By far the best rates come via spending on a specialist overseas credit card - providing it's repaid IN FULL each month, to avoid interest. Then in every country you get the same near perfect exchange rate banks do – smashing bureaux de change rates. (Normal debit and credit cards add a 3% fee onto this rate).

To get a card, you need to pass a credit check, yet our overseas credit card eligibility calc shows which top players you're most likely to get, and unlike applying to find out, it does not impact your credit file. 

Our top pick is Halifax Clarity* as it has the lowest ATM charges, yet Saga*(over-50s), Post Office*, Aqua* (poor credit scorers) & Nationwide's Select* card (for its customers ONLY) are all up there. If you fail to fully repay, the rates are 12.9%, 11.9%, 17.8%, 34.9% & 15.9% rep APR. For pros, cons & how best to use it read our Cheap Travel Cards guide (APR Examples).

2. Should I buy euros now? 

Now there's a big question, so for a big answer taking you through it step-by-step, read my buy euros now? analysis.

3. Going soon, or want to lock in a euro rate? 

If you can't get one of the cards above, are going imminently, want cash, or want to lock in the euro rate, there are two easy ways to do it.

a) Top prepaid cards. Here, you load the card with cash before you travel, then use it like a debit card. If you lose it, your cash is protected. Unlike top credit cards, you get the rate on the day you load/buy, not spend, so if the pound gets you even more euros afterwards, you lose. If it gets you fewer, you win.

Our top pick for euros is Ukash* as it has a good rate and low fees, though if you're loading £500+ the Fair FX euro* card gives an £8 bonus which beats it. Full info: Prepaid Travel Cards.

b) Top euro cash rate. Our Travel Money Comparison scans rates on 40 top online bureaux de change. And in the run up to Easter, three bureaux have rate sales; the tool will be updated when they boost (do compare as these sales don't always win).

• Asda is boosting rates until 8am on Fri on euros, US dollars & more. 

• Post Office is boosting online rates 8am Sat - 8am Tue on euros, US dollars & more.

• Travelex is boosting rates on Tue 24 on all currencies from 11am-1pm (so you could pre-order and pick up at its airport bureaux).

4. Not booked yet? Slash flight costs. 

For scheduled flights, don't wait till the last min as flight costs soar. See Cheap Flights, in brief...

• Cheapest price on normal flights: Use flight comparisons Kayak* (for flexibility and speed), Skyscanner* (for cheapest time to go), & TravelSup* (for breadth). 

• Check cheap charter flights comparisons too: Flying to a traditional package holiday destination, eg, Majorca? Check for spare capacity being sold on tour operators' flights via TravelSup*, Avro* & Flights Direct*. 

• Find the perfect time to book: Use the Flight Insight tab on comparison site Momondo*, eg, on average at least 53 days ahead keeps your price down but it varies by destination, so worth a check. 

• School hols flight trick. Easyjet's Flexifares let you switch dates a few weeks without paying more. So bag cheaper term-time flights, then swap for your chosen school holiday dates. Full how to & warnings in Easyjet trick.

5. Slash hotel costs (incl 10% off code). 

Forget the star system. There's no world standard and it's often about facilities, not quality. To find the hotel you want to stay at read reviews on TripAdvisor* but always ignore the best and worst 10%. To cut the price see our Cheap Hotels guide, key tips...

a) Check Trivago* and TravelSup* comparisons to find same room for less.

b) Then check against this 10% off Ebookers.com code. 

c) Lastminute.com sells secret hotels at big discounts, but you only know the star, description and rough location, use our tricks to uncover secret hotels.

d) If you're going as a family or with friends, our Cheap Villas guide shows you can massively undercut similar quality hotels. Eg, a 4-bed Algarve villa is £400/wk compared to £800 in a similar quality hotel. Plus as you usually will pay in euros, you get a direct benefit of the weak euro.

6. £6 travel insurance - get as soon as you book the holiday. 

I got this tweet this week: "Can the holiday firm keep my money as doctors have advised not to go when diagnosed with cancer?" Sadly the answer is yes, that's what travel insurance is for. It's why I always say get it as soon as you book your holiday, then if you get ill later you're covered.

• Cheapest single policies. The cheapest meeting our min cover levels is Protect Your Bubble Economy* for under-45s (from £6 for 1wk Europe) and Holidaysafe* for 45s-65s. Full info in Cheap Single Trip Travel policies.

• A year's cover from £13 (under-65s): If you'll go away 2+ times a year it's usually cheaper to get an annual policy, eg, a year's European cover for a 25-yr-old costs just £13, a family worldwide aged oldest 45 costs £51. Your cheapest depends on age and how many are travelling.

  For no-thrills policies, meeting our min cover levels, Holidaysafe Lite* is usually cheapest, but also check Coverwise* & Protect Your Bubble* as in some combinations they beat it. For full help & our 'top value policies' which include payout feedback too, see Cheap Annual Travel Insurance.

• Over 65? Or pre-existing conditions? See our specialist cheap over-65s travel insurance and cheap pre-existing conditions help.

7. Is yours one of 5.2m EHICs expiring this year? Renew for FREE. 

The free European Health Insurance Card gives you access to EU (plus a few other) state-run hospitals or GPs like a local. If it's no cost for them, it's the same for you. Even if you've travel insurance, if going to Europe, get one and... 

• Check the expiry date. 5.2m expire in 2015, renew or they're invalid.

• Keep it on you. Everyone (incl kids) needs one. It helps if you can show it. 

• Do NOT pay. Beware Google. Yesterday I got this tweet: "Just paid £49 to fake Ehic web - looked legit. Says it won't return it, pls warn others." EHICs are always free, there's no fast track, see how to Get/Renew an EHIC for free.

8. Book car hire ASAP and save £100s. 

The later you leave it, the more expensive it gets. Plus right now the euro conversion should work in your favour. What can be £9/day months ahead can shoot up to £21/day just before you travel.

a) Find the cheapest: Use the top comparison sites.

b) Check stealth fuel charges. Hire for 3+ days and some make you pay for a full tank & return it empty - if you won't drive far that can be £100 extra. Yet you can search by fuel policy to avoid this.

c) Get cheap excess insurance before you go. As you pick up the car, the hire firm will push up to £20/day excess cover on top of the included insurance. Instead, get Cheap Excess Insurance for as little as £2/day.

9. Slash airport parking cost from '£115 to £40'. 

A few papers recently ran a story that airport parking in the UK is Europe's most expensive. Nonsense. Done right, it's dirt cheap, as forumite Bigdaddy1210 says: "Got a brilliant deal using your links for a 4-day break - costing just over £40 instead of £115." 

Booking early helps. To find the cheapest, we've special links to comparison sites to get more off their price: Holiday Extras 10%-30% off*, SkyParkSecure 13%-30% off*, Looking4parking 10%-31% off* and APH 20% off Gatwick, Manchester, B'ham and Stansted*. For more tips, see Cheap Airport Parking.

10. Package holidays can undercut DIY web bookings... 

Especially for seven, 10 or 14 days in a traditional resort such as Majorca, Mykonos or Malia (and some that don't start with an M) as shown in 

Cheap Package Holidays

. In brief...

When to book? Massive savings are possible in the late market, (within 8wks of travel), yet there's restricted choice & you may need to be flexible. So if you need special facilities (eg, for families) book now and try to cut prices down by...

1) Looking for discounts, eg, lowcostholidays £60 off £1,000+, see package holiday discounts. 2) Haggling down the prices, see How to haggle.

Extra protection too. Package holidays are protected under the ATOL scheme, so if something goes wrong you get your money back (or help coming home). 

Having said that, book a flight plus separate hotel or car hire within 24 hours from the same travel (not airline) website, and since 2012 you've also got ATOL protection, just like with a package. Plus as Expedia*, Travelocity*, Ebookers* & Lastminute.com* often give extra discounts for flights and hotels booked together this can work well.

These are just the iceberg's tip see our full 50+ overseas travel tricks guide.