What is in your holiday wallet?

Although exchange rates vary daily, there are some preparations that can be made to reduce the cost of holiday travel money and purchases.

Not all banks or building societies have the same terms of use for debit cards - and despite credit cards having a higher interest rate for borrowing, the extra security that they offer purchasers may be worth more than the cost of buying travellers cheques or exchanging holiday cash.

Steve Willey, head of travel money at moneysupermarket.com, said: "It is sad to see so many people paying far more than they need to. Cash and travellers cheques are a more expensive option than the best plastic.

"Making some smart moves now rather than relying on cash from the airport will give you more spending power on your holiday. The formula is pretty simple - get the right debit card and credit card now or, if you don't have them, get the right prepaid card. 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."

Caravan and motorhome owners, who have the flexibility to depart at short notice, should ensure that credit card minimum payments are covered by direct debits if they plan to be away across a payment period, should pay in local currency rather than letting traders calculate sterling exchanges and should ensure that emergency numbers for lost or stolen cards are located in the van or glove box of the touring vehicle. Holidaymakers should also always beware the last-minute spending 'to get rid of local currency' which can undo all the bargaining which they have done during their stay.

01/07/2008 09:29:59