Tips for gap year travellers

of thousands of graduates and school leavers will soon be entering the job market – but with high unemployment, a gap year might be preferable until the job situation improves.

The financial responsibilities of travelling require strict budgeting if you don't want to find yourself stranded on the other side of the world requiring the help of parents.

Credit cards offer insurance on purchases, but can mean spending is difficult to control. On the other hand, prepaid cards are ideal for gap year travel as there is no credit facility, so you can spend money without the risk of debt, yet at the same time the holder has the protection and flexibility of a credit card.

Peter Harrison, from price comparison site moneysupermarket.com, said: "Prepaid cards offer the best foreign exchange rates and anyone can have one. But you need to be sure to get one with the lowest fees. Fairfax and CaxtonFX prepaid currency cards are currently the best in the market."

The Fairfax euro currency card has an application fee of £9.95 for orders less than £500 and is free for orders more than that. There is no monthly fee and an overseas ATM fee of £1.50 – less than most British debit cards.

However, if you lose your card Fairfax won't send you a replacement overseas so you might want to consider taking a spare card. The CaxtonFX euro card has no application or monthly fee, but a slightly higher ATM withdrawal fee of £2. It charges £5 to send you a replacement card.

The other advantages of prepaid cards is that should the ''gapper'' run into financial difficulties their parents can top up the card from Britain. Mr Harrison warned travellers to beware of less competitive prepaid cards on the market that often have hidden charges such as an application fee, a monthly fee and overseas usage fees.

The Tuxedo Pay Monthly card for example, has a £9.95 application fee and a £4.99 monthly fee. The onebanking Account prepaid card has an initial fee of £30 and an ongoing monthly fee of £12.95.

It is estimated that 25pc of travellers do not have adequate travel insurance even though gap travellers are more likely to try extreme activities, such as bungee jumping and skydiving. In the same way that holidaymakers pay a premium for winter sports cover, gappers can expect their insurance to cost more.

But the problem is that cash-strapped students are not seeing travel insurance as a financial priority. The Foreign and Commonwealth Office says it gets more referrals for help from gappers than any other type of traveller because of a lack of insurance. The help overseas embassies can give is limited, especially if you cannot meet any required expenses.