Be careful when spending abroad
1) Shop around for your currency
Firstly you need to ensure you're getting the best deal for your money. So make sure you shop around.
It's a good idea to plan ahead and avoid changing money in hotels and airports as these often offer poor exchange rates. High street banks are also likely to be less competitive in terms of exchange rates. Instead, it's worth investigating online currency providers such as Travelex.
You should also be wary of commission-free deals as commission-free outlets will often offer a poor exchange rate to make up for this cut in their commission.
2) Spend wisely
Overseas transaction fees are one of the biggest stings of going abroad. Often unavoidable, they can add almost £30 to every £1,000 you spend overseas.
To get around this it's worth worth taking out a credit card that doesn't charge any foreign transaction fees when used abroad - such as the Abbey Zero card and Post Office credit card. Find out more in Top new credit card for holiday spending has a big catch.
3) Avoid withdrawing cash from an ATM
Withdrawing money on your credit card is never a good idea - you'll usually be charged a fee of around 2% to 3% of the amount withdrawn, with a minimum charge of £2 to £3. Not only that, but you'll be hit with a hefty interest rate too.
However, withdrawing money on your debit card when you're on holiday can also be expensive - usually you'll be hit with a cash conversion charge of around 2.75% of the amount withdrawn, as well as a cash transaction charge of around 1.5%-2% of the amount withdrawn (with a minimum charge of around £2).
So try to avoid taking money out of a cashpoint if you can.
4) Watch out for dynamic currency conversion
You should also be aware of dynamic currency conversion where the retailer will ask you if you want to pay in pounds, as opposed to the local currency. This may sound convenient, but in reality the exchange rates offered are often poor so should be avoided. Find out more in The seven biggest currency rip-offs.
5) Get a pre-paid currency card
Choosing a pre-paid currency card can also be a great alternative to a credit card or debit card because you can avoid transaction fees.
Once you've chosen your card, you can pre-load your spending money before you jet off on holiday. You can load the card with Euros, US dollars or Sterling and can top it up with extra cash whenever you want.You can find out more in A handy alternative to credit cards.
6) Tip correctly
Baffled over how much you should tip on holiday? Take a look at our guide to tipping etiquette to ensure you don’t end up paying too much – or too little.