How to get most out of a student holiday
After all that study you've earned your summer break -- but there's no reason it should cost an arm and a leg, says Louise McBride
IT'S only a few weeks before college students throw away the last of this year's exam papers and head off on three months' holidays. Many will take the opportunity to backpack around the world -- but unless they do so wisely, mammy or daddy could end up paying for that trip for years to come.
So if you or your student son or daughter is about to head off on a backpacking adventure, how can you do so without it costing an arm and a leg?
CHEAPEST TRAVEL LOAN
If you need a small loan to finance a backpacking trip, your best bet is Bank of Ireland or AIB.
BoI offers interest-free travel loans of up to €2,000 to students as long as the loan is repaid within nine months. Otherwise, the interest rate on BoI's student loans is 11.9 per cent. AIB offers students an interest-free overdraft of up to €1,500. If you go over your limit, however, a hefty interest rate of 12.2 per cent is lobbed on the balance over €1,500.
Ulster Bank offers a travel loan of €2,000 -- but you must pay 7.1 per cent interest on it and repay it within one year.
National Irish Bank says its Freedom account is its best package for students. However, Freedom doesn't offer travel loans and as the interest rate on its personal loans is between 10.75 and 13.35 per cent, these loans aren't really worth considering if you're a broke student desperate to save money.
CHEAPEST WAY TO GET AT MONEY ABROAD
If you have a Visa Debit or Laser card and have enough money in your current account to cover purchases and withdrawals while you're away, you'll be able to avoid the hefty interest that comes with credit cards -- and your money will be safe and secure in your account back home.
Ulster Bank and Permanent TSB offer Visa Debit cards to students while AIB, Bank of Ireland and NIB offer Laser cards.
You can avoid hefty charges on your Visa Debit or Laser card by limiting your backpacking trip to Europe as you should not be charged any more to withdraw money in the eurozone than you are at home. However, use of the cards outside the eurozone attracts hefty charges.
If you run out of money while abroad, you can get a relative to wire you money -- though if you're wiring outside the eurozone, it could cost you. If you want to send €500 from Dublin to New York, for example, it will cost you about €37 to do so over the phone with Western Union -- though it will be slightly cheaper to do so online. If you send €500 to Australia using Western Union's online service, the cost is €23.80.
If you're outside the eurozone and you have a bank account in the country you are visiting, it may work out cheaper for a relative to transfer money from an Irish bank account to the international bank account. Some Irish banks charge between €22 and €32 for international bank transfers.
CHEAPEST CREDIT CARD
If using a student credit card while abroad, your cheapest bet is AIB or BoI -- but only if you open your credit card account shortly before you travel and repay your bill within a few months.
You can use BoI's student credit card for six months without paying any interest. After that, you'll be hit with a hefty interest rate of 18.1 per cent on credit card purchases -- and 26 per cent interest on cash withdrawals. So if you take out the BoI credit card just before you travel and repay it within six months you can avoid the interest.
You won't be splashing out too much, however, as the credit limit is €400 if you're in your first or second year of college, and €850 for subsequent years.
AIB's Student Mastercard also has a pretty dismal credit limit of €600. However, the interest rate on card purchases is 3.83 per cent for the first year which is a fraction of that charged by other banks. Ulster Bank's Student Credit Card, for example, has an interest rate of 34.6 per cent and a credit limit of €450. NIB's standard card has an interest rate of 15.81 per cent and a credit limit of €5,000.
Even if you avoid the interest on your credit card, you usually have to pay foreign exchange charges if you use your card to buy something or withdraw cash outside the eurozone.
If you're planning to withdraw money from your credit card while travelling, check if you can avoid cash advance fees (charged if you withdraw cash from your credit card) by loading up your card before you leave.
CHEAPEST WAY TO CALL HOME
If you can get a cheap internet connection while abroad, it would be worth your while signing up to Skype (www.skype.com) -- and getting your family to do so too. It is free to call anyone with a Skype account -- regardless of where in the world they are.
If you're relying on your mobile, as you're a student, you're more than likely to own a prepay than a bill-pay mobile.
You'll save a packet if you stick to Europe for your backpacking this summer -- and sign up to Meteor's new roaming package. With Meteor's new package, you'll pay the same for calls and texts while roaming in Europe as you will at home. Under the Meteor roaming offer, prepay customers pay 29c a minute to make a call to Ireland while roaming in Europe and 12c to send a text. It's free to receive calls.
Although pre-pay customers using Three's 3 Like Home package also pay 29c a minute to call Ireland while roaming in Europe, at 35c a minute, it costs slightly more to call Euro- pean countries. It is also free to receive calls while roaming with 3 Like Home.
If you're backpacking outside Europe, your cheap-est bet is most likely either Vodafone Passport or O2 Tr- avel (see Deal of the Week).
CHEAPEST WAY TO BUNGEE JUMP IN PEACE
If your backpack adventure is going to take in a bungee jump in New Zealand, scuba diving in Australia's Great Barrier Reef or white water rafting in the Canadian Rockies, backpacker travel insurance is probably your best bet.
Most backpacker policies are designed to cover the weird and wonderful things backpackers get up to while travelling -- but check the fine print before jumping out of a plane for thrills.
Not all insurers cover sky dives in the US. Many insurers will not cover scuba diving below a depth of 30 metres -- unless you've paid for cover for deeper dives. You'll be lucky to find a policy that covers cliff diving.
The main advantage of backpacker policies is that you're usually covered for your entire trip abroad. Annual multi-trip travel insurance policies cover a certain amount of trips each year -- but many won't cover trips that last longer than 31 days.
"Backpacker policies usually cover you for longer holidays than annual policies do," says John Geraghty, chief executive of the online brokers, LABrokers.ie.
If your three-month backpack trip starts this June and you're planning to travel the world, you could pay anything from €67 to €259 for insurance.
Mondial Assistance (www.mondial-assistance.ie) quoted €67.20 to cover a three-month worldwide backpacker trip while Getcover (wwwgetcover.ie) quoted €78.75. Multitrip (www.multitrip.com) quoted €75.99, while Backpacker Travel Insurance (www.backpackertravelinsurance.ie) quoted €79.99 for its standard Premier cover and €109.99 for its more advanced cover.
If you're planning a raft of daredevil activities while travelling, or are heading to a remote area where the medical facilities aren't the best, the cheapest policy might not be the best option. A more expensive policy doesn't always mean better cover -- but it could pay out more if you find yourself in trouble.
Sunday Indo Business