Pick your card carefully

For overseas use the cheapest debit card is offered by Nationwide, which charges no foreign loading fee or margin on currency conversion. There is also no charge for withdrawing cash.

If you’re using a Nationwide credit card, however, you will be charged a cash advance fee of 2.5% or a minimum of £3. This is also applicable in Britain.

You will need to open a Nationwide bank account to benefit, and some readers have reported problems using their cards in far-flung destinations. A good option is the Post Office credit card which charges no commission, but charges a cash-advance fee of 2.5% or a minimum £3 if you withdraw at a foreign ATM.

Pre-paid cards can be cheaper

Currency specialists such as Caxton FX and Fair FX allow you to load a card with dollars or euros before you travel so there is no conversion or loading fee when you make purchases with the card.

The firms say they change their rates in line with daily movements in the interbank rate, keeping margins at about 1%. They say this allows them to offer some of the best rates available today.

Nationwide’s exchange rate, on the other hand, is based on the Visa wholesale rate which is pegged against the interbank rate at a certain point in the day.

Visa does not charge a commission but as the rate is fixed daily, while the interbank rate fluctuates, the rates offered by specialists can sometimes be better. On Wednesday, the cost of ¤1,000 using the Nationwide credit or debit card was £934 — £12 more than it would have been with Fair FX. You will, however, be charged for withdrawing cash abroad, though this is still less than with most credit cards.

Fair FX charges €1.50 per withdrawal in Europe and $2 in America, taking the cost of €1,000 to just over £935. You may also be charged by the local ATM provider.

If you want to take cash, book online.

If you prefer to pick up your cash before travelling, it’s better to plan ahead. Travelex allows you to buy at a bureau de change in airports and seaports but rates are usually poor and you pay commission of about 1.5% with a minimum of £3.