As we approach the holiday season, with millions of families set to travel overseas, now is the perfect time to review the cards in your wallet to see what they'll cost you to use when you're away.
It will only take you a couple of minutes to check on your provider's website to see what you'll be charged for overseas debit or credit card purchases and cash withdrawals.
Taking the wrong plastic can be a costly mistake, leaving you paying over the odds for your holiday spending money to the tune of £68, maybe more, in some cases. If you're someone who takes a couple of holidays a year, that's a saving of over £680 over the next five years – surely a big enough incentive to check that the card in your back pocket isn't an expensive dud when it comes to using it in foreign climes.
Much of the current travel money talk is focused on the economic uncertainty in Greece, where increasingly the advice has been to take cash rather than plastic. However, this is an exception rather than the rule, and for most travellers the security of a cost-effective pre-paid travel card will always prove a safer and cheaper option.
Too many people still rely on their existing bank debit or credit card without realising how expensive it can be – in many cases, it can take a huge bite out of your holiday money. There are exceptions, with Metro Bank (Europe only) and Norwich & Peterborough building society debit cards offering fee-free transactions overseas, and Halifax Clarity, Saga and the Post Office among the top credit cards for use outside the UK.
However, the cheapest pre-paid currency cards from Centtrip and Cash Passport beat the majority of debit and credit cards hands-down. Research found that on a holiday spend of €1,800, the total cost was £1,307.86 with Cash Passport – over £65 cheaper than the most expensive credit cards. Similarly Centtrip at £1,306.43 left an extra £50 in the holiday spending kitty when compared with the most expensive debit card,
Even on a smaller holiday spend of €1,300, there was a wide disparity, with ACE FX at £944.35 and Cash Passport at £944.14 – both £38 cheaper than a credit card from Virgin Money and £30 cheaper than debit cards from the banking giants Halifax, TSB, Santander and Lloyds.
It's not just in terms of cost that pre-paid cards come out on top, with many providers more geared up to step in and help if your card is lost or stolen abroad. American Express, Tesco Bank, MBNA, Santander, TSB, Virgin Money and Barclaycard do offer an emergency credit card replacement service for customers.
However, more than a dozen debit and credit card providers either won't send a replacement card abroad or will only consider it in exceptional circumstances – whereas 10 out of the 14 pre-paid card users offered this service, and two of the others provided a spare card at the time of the application.
The majority of pre-paid companies charge a fee of around £5 or £6 for the replacement service, with Cash Passport and Travelex the only two providers offering the delivery of this holiday lifesaver free of charge.
Most of us take time to research the best-value flights, resorts and accommodation when organising our holidays – so it makes sense to apply the same logic to your holiday spending money.
Andrew Hagger is an independent personal finance analyst from www.moneycomms.co.uk