Save on travel money

Many holidaymakers get their travel money from a frenzied dash to the foreign-exchange bureaux at Heathrow on the way to their flights. But these shops are very expensive as one look at the spread between the buy and sell price will tell you. If you're organised enough to get foreign currency sorted out before you leave, there are ways to save a substantial amount.

First, ignore your bank and the post office. They rarely offer good rates. You're better ordering from a specialist foreign exchange bureau (either for delivery or collection). A comparison site can help you find the cheapest providers: one useful tool is MoneySavingExpert's TravelMoneyMax.

For those who prefer to pay by card, look for travel-friendly credit or debit cards that don't impose transaction and withdrawal charges, and which don't add commission to the exchange rate (the Halifax Clarity credit card is one good option on this front although remember that as a credit card, it will charge interest on cash withdrawals). If you don't want a new bank card, you could consider a pre-paid currency card. But watch out for the ones that charge inactivity fees and compare the exchange rates on offer.

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Lastly, make sure you understand what you're paying. "Commission-free" doesn't guarantee a good deal the provider's mark-up will still be included in the rate they quote you. Check the exchange rate they quote you against the wholesale rate (available through a site such as XE.com). A difference of 1% is a good deal, while 5% (a staggeringly high charge, yet typical of a bank) is not.