Ways to pay on holiday

One of the easiest ways to pay for goods and services abroad is to use your debit or credit card, but what many holidaymakers don't realise is that they are paying heavily for the convenience.

Most banks charge a foreign loading fee for purchases and cash withdrawals in foreign currencies, which can be as high as 2.75 per cent.

If you travel frequently it might be worth switching to an account with lower foreign fees, or opening a separate account for holiday spending.

Nationwide FlexAccount Visa is one of the cheaper options, charging only 1 per cent for foreign spending.

If you stick with a more expensive account, it might be cheaper to make larger withdrawals from cash machines and pay cash, rather than paying with your card for small purchases.

One of the cheapest ways to spend abroad is to buy your foreign currency in advance, though some people are not comfortable with the idea of carrying much cash around.

If you do take cash ? rather than travellers cheques ? you should check how much cover your travel insurance provides for personal money.

As high street and online foreign exchange outlets change their rates day by day it's hard to say which is consistently the cheapest, but don't be fooled into thinking that those who don't charge commission offer the best deal.

Always check the exchange rate as well as commission levels before buying.

And don't leave your purchase until you arrive at the airport, as foreign exchange outlets in departure lounges almost always offer the worst exchange rates.

Digg    Reddit    Facebook    Tweet This