Gap years can cost more than you think

Date: July 6, 2009

Gap-year facts

• 230,000 young people between the ages of 18 – 24 are expected to take a gap-year this year
• £3,000 - £5,000 is the expected cost of a gap-year experience
• Every year £1,150,000,000 is spent on gap years.

Gap-year case study – Layla Asvadi

When Layla Asvadi, 24, took her new Egg credit card with her on a four month round the world trip, she thought it more than covered the cost of the experience. However, she didn’t bargain on the extra charges she would accumulate through hidden charges.

She said: “I thought that taking a credit card would be the easiest way to budget while I was away. The card gave me 12 months interest free and a credit limit of £3,000.

“The card was really easy to use and widely accepted, but I found it hard to keep track of how much I was spending. I couldn’t check online as in many places there was no internet connection so I tried to call customer service but it proved extremely hard to actually speak to someone. I was just kept on hold which cost a lot of money on my mobile.”

Layla also found that she incurred charges from things that she didn’t expect. She said: “During the trip, I lost out with the exchange rate and was charged for taking money out of the ATM. It also became difficult to make my monthly minimum payment which resulted in me being charged a significant amount for missing payment deadlines.

“When I got back to the UK, I was amazed at exactly how much money I’d spent – there were no real extravagant expenditures but the little costs really mounted up over time. All together the trip probably cost me closer to six or seven thousand pounds.”

In fact, the trip cost Layla so much she even deferred her Business and Marketing course at Sheffield Hallam University for a year to pay back the debt. She concludes: “I came back from travelling in July and intended to start my course in the September. Initially, I thought I would be able to pay it off by working over the summer. But the debt was too large so I had to take on three jobs.”

An alternative solution for travellers:

Prepaid travel cards - sometimes referred to as plastic travellers cheques, are becoming increasingly popular with holidaymakers and travellers who want the convenience of a bank card without worrying about overspending, hidden charges or security.

Recent research from travel money specialists, Travelex, even shows that the rising sales of prepaid cards have contributed to the demise of the traditional travellers cheque, with sales down 30 per cent year-on-year to date in 2009.

The prepaid travel card, Cash Passport, can be loaded up with numerous currencies, including Euros, US dollars and British pounds. In addition, Travelex has just extended its currency range to include Australian, New Zealand and Canadian dollars and the South African rand – all popular destinations with holidaymakers and gap-year travellers.

Cash Passport is a simple way to control spending and help travellers to budget for the duration of their trip. The cards have no credit facility so only the amount that has been loaded on to it can be spent. For added peace of mind, the cards can be topped up, either by the traveller or relatives back home, as and when more money is needed during the course of the gap year. In addition, Cash Passport is also the only prepaid currency card to offer free Global Emergency Assistance service that can replace funds promptly if the card is lost or stolen.

Cash Passport is widely available at Travelex Bureaux, The Co-operative Travel, Thomas Cook, Sainsbury’s, Tesco and a number of High Street Travel Agents and Building Societies.

Steve O’Donovan, managing director for Travelex Outsourcing Europe and North America, said: “Education and career breaks have never been so popular among young people. It is estimated that nearly £1.5 billion will be spent on gap-year trips this year alone.

This rise in trips means that there is an increasing demand for prepaid cards which offer a means to control holiday spending while avoiding unexpected charges and the security risks associated with cards directly linked to a bank account. This is particularly true in the current climate where we are seeing a rise in fraud targeting UK holidaymakers abroad and a decline in the use of traveller’s cheques.”

Pre-paid travel card facts

• Research from Travelex shows that rising sales of prepaid cards have contributed to the demise of the traditional traveller’s cheque, with sales down 30 per cent year-on-year to date in 2009
• There are more than 1.35 million Travelex prepaid travel cards already in circulation
• With the introduction of the new currencies, the Travelex Cash Passport (Travelex’s own prepaid travel card) now caters directly for 86% of UK tourists who are planning to travel this year.

Ends

Travelex Outsourcing
Travelex is the world's foreign exchange and international payments specialist. Operating through subsidiaries and branches in five regions: the United Kingdom; Europe, Middle East and Africa (EMEA); Americas and Asia Pacific.

As one of the world's leading providers of outsourced travel money to banks, travel agencies and other retailers it provides products including its prepaid travel card Cash Passport to over three million channel customers annually. Through its world-leading automation Travelex offers consumers a full range of delivery channel options including telephone and web-based ordering.

www.travelex.com | www.cashpassport.com

For more information, please contact the Travelex Outsourcing press office:

Rebecca Maund / Becky Lamont
0207 2556400 / 07989 230737
rmaund@golleyslater.co.uk/ rlamont@golleyslater.co.uk