Get a currency deal

If you plan to carry foreign currency – and most people like to have at least £100 of local notes and coins when they arrive – then use a site such as TravelMoneyMax, run by Martin Lewis’s MoneySavingExpert.com. Enter your postcode, indicate when you want the cash and it will provide a list of the best deals.

Essentially, you have three options: home delivery, collection from a bureau or at the airport. Some firms require a minimum order value. Sometimes you will get a better rate if you buy more, while smaller orders may attract extra fees. Exchange rates are constantly updated.

We used TravelMoneyMax to do a price check on £300-worth of euros. When we opted for delivery, Travel FX came out top, giving us €347.81 after all charges, while Tesco came in at a pretty good €344.42.

A better rate was on offer when we selected collection from central London: Currency Online Group’s locations in Waterloo and Trafalgar Square came top, giving €353.76.

Andrew Hagger of the financial website Moneycomms.co.uk says supermarkets – in particular Tesco and Asda – are also pretty competitive.

Don’t leave it too late

Don’t buy currency at the airport unless you are desperate. You might get a good deal if you purchase it in advance and order it to collect just before you fly. We tried this option at TravelMoneyMax but collecting from the airport did not throw up much in the way of results. The site says because of the Covid pandemic, “many providers have paused some or all travel money services”, so it has fewer than usual on its site.

Pack the right card

Pick the wrong credit or debit card to use abroad and you will end up spending more than necessary.

The financial data provider Moneyfacts warns that a holidaymaker taking out £250 from an overseas ATM with a debit card will typically face charges of £11.88. Use a credit card and you could incur up to £14.95 in fees, before interest is applied.

Overseas purchases can be costly, too. Some banks apply a foreign currency purchase fee (50p at Lloyds and Halifax; £1 at TSB) on each transaction outside Europe, in addition to the conversion fee when you buy something in anything other than sterling, so if you make lots of small purchases you could face a hefty bill.

The good news is that there are several fee-free debit and credit cards. Most use Mastercard’s exchange rate in their calculations. The digital bank Chase’s newish current account comes with a debit card with zero fees and charges when used to pay for things or withdraw cash outside the UK. You can also earn 1{e9f0aada585b9d73d0d08d3c277fd760092386ec23cac37d50f4b8cd792b062a} cashback on eligible debit card spending at home and abroad for 12 months.

And Starling Bank is another current account provider that does not charge fees for overseas spending and cash withdrawals.

In terms of fee-free credit cards, Halifax’s Clarity is probably the best-known and is still a good deal, Hagger says. Whatever you spend abroad is converted to sterling by Mastercard. There’s also the Barclaycard Rewards Visa card, which offers the added perk of 0.25{e9f0aada585b9d73d0d08d3c277fd760092386ec23cac37d50f4b8cd792b062a} cashback on everyday spending.

Remember that with many credit cards, including Clarity, interest charges will apply immediately to cash you take out. Also, be aware that some overseas ATM providers charge fees. Generally, it is better to make one or two larger withdrawals than lots of smaller ones.

If there are several weeks until your holiday, consider applying for a fee-free card or account now. Otherwise, check the overseas charges that apply to your debit or credit card before you set off. You then can adapt your spending to get the best deal.

Check your credit limit

If you plan to hire a vehicle, make sure your card has enough credit. Car hire desks will often seek to block off a sizeable sum on your card as a deposit for the duration of the rental if you do not buy their excess insurance.

Check your credit limit before you travel and, if necessary, ask your card provider to increase it, perhaps for a short period. Car hire firms will usually insist on a credit card, as opposed to a debit or prepaid card, and typically it needs to be in the name of the hirer.

Don’t spend pounds

When using your card overseas, watch out for the dynamic currency conversion trick at some shops, restaurants and ATMs, where the cost or withdrawal sum is presented in pounds rather than the local currency. DCC allows businesses to calculate the bill according to their own – more favourable to them – currency rates. The general advice is to always pay or withdraw money in the local currency.

Consider prepaying

Prepaid cards can be useful for people on a tight budget or who do not want to carry lots of cash. They are easy to obtain, and once you have loaded them up from your UK bank account at a typical currency conversion fee of 1-2.5{e9f0aada585b9d73d0d08d3c277fd760092386ec23cac37d50f4b8cd792b062a} they can be used abroad like any other bank card.

Which? warns that almost all prepaid cards come with a variety of fees and charges, for example, an application fee or a charge for ATM withdrawals.

The Caxton Currency card is one of the best-known, with no overseas ATM fees and “no hidden charges”. Meanwhile, Which? highlights the free Revolut Standard account and card.

Keep mobile bills down

How much you pay for data, calls and texts will depend on your provider and where you are going, so check this before you travel. Be aware that some mobile operators have reintroduced roaming charges for UK consumers travelling to Europe. For example, with Vodafone, if your plan does not include roaming on the continent, it will cost £2 a day, although it has eight- and 15-day passes that reduce the daily price to £1.

One popular option is to make sure your phone is unlocked and buy a local sim card when you arrive. For example, if you are going to Mexico, some bloggers recommend buying a Telcel sim card from an Oxxo store.

But the best advice is, where possible, to use the free wifi in hotels, cafes, museums, airports and other locations.