The most convenient and inexpensive method of getting foreign cash used to be withdrawing money from an overseas ATM using a debit card. Transactions usually incurred a charge of £1.50, but this was offset by an exchange rate that was generally better than the tourist rates. In the past year I have noticed that such transactions now incur two charges, and the advantageous exchange rate has disappeared. Why is this, and what is the best way to buy foreign currency? John Adsett, by e-mail

Cath Urquhart responds: Many banks charge two fees for debit-card cash withdrawals made overseas. First, there is a “currency fee”, typically 2.75 per cent of the amount withdrawn, which is wrapped up in the exchange rate so it does not appear on your statement as a separate item. This may be why you find the exchange rate uncompetitive. And many banks also charge a “withdrawal fee”, typically 1.5-2 per cent of the amount withdrawn, minimum £2.

Nationwide Building Society is the only lender I’ve found that does not charge either fee. But to obtain its debit card, you must hold a current account with Nationwide, which may mean changing banks. Holders of other debit cards should consider withdrawing larger amounts less frequently to reduce the withdrawal fee charges.

Alternatively, buy foreign currency before you leave, shopping around for deals such as zero commission and free home delivery. Try these: Marks & Spencer Money (0870 6003502, www.marksandspencer.com/ travelmoney), Nationwide (0870 0100719, www.nationwide.co.uk), The Post Office (0845 7223344, www.postoffice.co.uk), Thomas Cook (0870 0102913, www.thomascook.com), Travelex (0870 2405405, www.travelex.co.uk).

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