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Where can I find the cheapest travel money?

London bureau de change Image copyright Getty Images

A long time ago obtaining foreign currency for your holiday was a hassle.

Before government controls on foreign exchange were removed in 1979, you could only obtain holiday cash by going to your bank or a bureau de change.

There were limits on how much money you could take out of the country.

If you did not want to carry too much cash, you could buy travellers cheques which you then cashed at a bank abroad.

Things are rather different these days.

There are no limits on taking your own cash out of the country, though there may be restrictions at your destination.

And for sums larger than 10,000 euros, a UK customs declaration must be made if you take the money to or from a non-EU country.

But that is deter crime such as money laundering rather than to spoil a big family holiday.

Where to buy?

The world is your oyster.

You can still go to your bank or to the Post Office and order foreign cash from them.

But selling foreign currency is a lucrative business and many other companies would like you as their customer.

For instance, bureaux de change are seemingly everywhere - in the High Street, supermarkets and department stores, as well as the traditional locations of airports, ports and railway stations.

But choosing one need not involve traipsing around your local streets.

Image copyright Getty Images

Stay at your computer or use your smartphone and Google will tell you which ones are closest to you.

There are some comparison websites to help you chose between them, such as mytravelmoney, compareholidaymoney, travel-money, and moneysavingexpert.com.

Note that the rates on offer on bureau de change websites are for people who order online in advance, and then collect from the bureau.

They may well deliver the money to your home as well, though a fee may be involved.

You will, however, receive a poorer rate if you just turn up unannounced, needing some cash there and then.

Why bother with cash?

You can always use your credit card or debit card abroad, either to take cash out of a foreign ATM or to pay in a shop or restaurant, but it can be fearfully expensive.

You will you be charged at your bank or credit card provider's unattractive exchange rate.

Also, you may also have to pay a variety of hefty fees as well: for spending in a foreign currency, for taking cash out of an ATM abroad, or for simply using it to pay for something.

The website Moneysaving expert has this very useful guide which is updated weekly.

One of its most useful points is that there are several credit cards which go out of their way to attract travellers by not loading huge fees on the use of their cards.

Its current top recommendations for credit cards to be used abroad, without these fees, are the Halifax Clarity and the Barclaycard Platinum Travel cards.

Pre-pay cards

These have become very popular in the past decade or so and there is quite a wide choice from providers such as FairFX, ICE, Moneycorp and Caxton.

You have to open an account to obtain the card.

Then you can simply load it via the company's website in the currency of your choice.

It can then be used to take cash of a foreign ATM or to buy things abroad.

The two big advantages are that the foreign exchange rate at which you load your card will be a bit better than the one you will be offered by, for instance, a High Street bank.

And there are likely to be no charges at the point of use.

But note that some cards do levy fees.

One particularly popular card has been the Post Office Travel Money Card which, like some others, does charge an ATM fee.

In this case, the Post Office charges £1.50 for sterling withdrawals, two euros for euro withdrawals, and $2.50 for withdrawals in dollars.

So which is best or worst?

Generally speaking, the worst exchange rates are to be found at airport bureaux de change outlets - unless you order in advance.

Operating expenses are high and the customers are a captive market

It certainly used to be the case that pre-paid cards offered the best rates, but that no longer seems to be the case.

For instance, at the time of writing, most pre-pay card providers seem to be offering 1.06 euros to the pound, but that is the same as the many online bureaux de change.

Meanwhile High Street banks such as NatWest and Barclays are currently offering euros online at the slightly less generous rates of 1.03 to the pound.

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