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CANNY SHOPPING: Some credit cards offer better terms than others when buying abroad PEOPLE can slash the costs of their holiday by buying foreign currency on the high street or online rather

than at the airport, say consumer groups. Lisa Taylor, from the website Moneyfacts.co.uk, says: “Many of us will search for the most competitive travel package, insurance, flights or car

parking but one area we seem to neglect is our travel money, often choosing the convenience of our own bank or airport rather than finding the best deal.” Most travellers’ holiday spending

is likely to be a mixture of cash and bank cards. So what charges are you likely to face and how can you minimise the costs? Cash The good news is that upfront commission fees for currency

deals are becoming quite rare, with only a handful of branch and telephone services charging customers. As this fee used to be between 2 and 3 per cent of the order, it would seem consumers

are making a saving. > Don’t leave it to the last minute. Purchasing at the airport will > normally include a premium for the convenience >  > Lisa Taylor, from the website 

Moneyfacts.co.uk However, many providers have clawed this money back by providing a less competitive exchange rate, meaning the rate is now the key factor in determining your best deal. It

is vital that consumers do their research and compare providers’ fees and rates. “Consumers should perhaps look beyond their own bank or local travel agent and take time to consider at least

a few other providers,” says Taylor. “Don’t leave it to the last minute. Purchasing at the airport will normally include a premium for the convenience.” Many of the best deals for foreign

currency are online and these can often be more convenient than queuing on the high street. Most providers now offer online, telephone and branch ordering services, with delivery to home,

high street or sometimes the airport. However, be aware that some providers levy a fee to deliver to your address  — for example, Halifax charges £5 and Lloyds TSB £4.50. A recent “mystery

shop” of online currency by Moneyfacts.co.uk tested how much consumers would have to pay in sterling to receive 1,000 Euros. They found that Thomas Cook had the worst exchange rate of e1.38,

meaning you would fork out £724.64, although they did offer free branch or home delivery. Travelex had the best deal of e1.41, giving a total bill of £705.17 when you collected from their

bureaux. Of course, these rates will change from day to day but unfortunately there is no service that offers consumers an at-a-glance comparison of all the figures. Taylor says: “It is

unrealistic to check every provider but it’s certainly worth taking time to compare a few. It tends to be the same ones who are generally good or generally bad. Travelex offer rates

guarantees, so if you buy from them, you have the security of knowing they have searched the market themselves that morning and are offering a competitive deal.” Using your card abroad Be

clear what the bank or building society’s policy is when you use their card abroad — many people are stung with unexpected charges. Most levy a 2.75 per cent foreign usage fee and Lloyds TSB

has announced its charge is going up to 2.99 per cent from the end of July. NatWest has also increased its overseas debit card purchase fee from 75p to £1.25. This is imposed when cards are

used in shops, restaurants and other outlets. The maximum charge for cash withdrawal will also rise to £5. Mike Smith, from International Currency Exchange, says: “Many travellers do not

realise their bank will make hefty charges for using an ATM abroad or that the ATM provider could also have an additional charge for the transaction. “It’s easy to end up paying nearly £10

to take out the equivalent of £100, adding 10 per cent to the cost of your holiday spending.” Research published today by Which? Money says the best credit cards for spending abroad are

Liverpool Victoria, Nationwide, the Post Office or Saga. Debit cards are better for cash withdrawals as they usually have lower handling fees — Nationwide’s debit card is currently best.

Martyn Hocking, Editor of Which? Money, says: “If you’re going on a long holiday, speak to your bank before you go. If it sees a spate of foreign transactions, it might query them or even

block your card.” Other methods of payment As well as currency, holidaymakers  may wish to take pre-paid cards. These are good if you don’t feel like carrying large amounts of cash  but

don’t want the hassle of travellers’ cheques. They are used like debit cards but only up to the amount paid on the card, so you cannot run up debts. They are activ­ated by a Pin number and

can be cancelled if lost or stolen. Many providers, including the Post Office, Travelex, Thomas Cook and Amex, offer these cards for use abroad but remember you could be charged to load

money on to them or to withdraw currency from cash machines. The cards might be easier than travellers’ cheques, since you do not have to show your passport to use them. When it comes to

cashing the cheques abroad, your nearest provider may not provide a competitive exchange rate and will almost cer­tainly charge a commission fee. However, the cheques can be useful if you

are in the US, as they can often be used to pay directly for goods.