Despite high living costs continuing to put a strain on some households, UK travellers are budgeting more for their overseas holiday spending than last year, according to research carried out by ABTA Travel Money. Holidaymakers on average plan to spend £369 each during a short break, rising to £660 for a longer break.

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If you prefer the convenience of paying by plastic while you’re away, make sure you check how much you’ll be charged before you go, or you could be in for a nasty shock when you receive your next bank statement.

Some credit card providers will charge an eye-watering £4.59 in fees on a £20 withdrawal, according to number-crunching by TotallyMoney, equivalent to a 22.95% charge, although with the majority a £20 withdrawal will set you back £3.60 in charges. For example, both HSBC and M&S Bank charge a 2.99% cash withdrawal fee if you take money out using one of their credit cards while you’re abroad, with a minimum £3 charge payable. You’ll also pay a non-sterling fee of 2.99%, which combined with the withdrawal charge means you’d pay £3.60 to take out £20 with either bank.

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Alistair Douglas, chief executive of TotallyMoney said: “Before you go away, double check how much your bank will charge you for using your card abroad. If you’re lucky, you might already have a fee-free option in your wallet — so make sure you stick to using that one. If not, and you’re planning on using credit, then consider applying for a Halifax Clarity or Barclaycard Rewards card —specifically for overseas use. Both offer fee-free purchase and cash withdrawal transactions abroad.”

Bear in mind that whilst the Halifax Clarity card offers fee-free cash withdrawals, you will still pay interest on any withdrawals at a rate of 23.94% to 29.94%, even if repaid in full.

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If you’re planning to spend using a debit card, these can also charge steep fees, with some charging a flat fee usually ranging between 50p-£1.50 each and every time you spend overseas, even if you’re only spending a few pounds. However, there are a few which don’t impose steep charges.For example, Chase’s debit card allows you to withdraw up to £1,500 in cash each month with no withdrawal fees, and you’ll get up to 1% cashback on most spending in the UK and overseas, up to a maximum of £15 a month. Lloyds Bank also recently announced that Silver and Platinum account customers will be able to use their debit card, free of charge, anywhere in the world from 1 July.

Remember that if you’re using a card to make a purchase or withdraw cash, and you’re asked whether you want to pay in pounds or in the local currency, you should almost always choose the local currency. If you don’t, you’ll usually be charged a currency conversion’ fee, which is essentially a charge for converting purchases or cash withdrawals made in a foreign country to your home currency. There’s usually no limit on how much these fees can be.

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Finally, as well as making sure you’re careful to take the right cards with you for your holiday spending, it’s often worth buying a bit of local currency in the UK before you go. This will mean you’ll have cash readily available for items such as taxis where cards might not always be accepted, and that you won’t be hit by steep overseas ATM charges.

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