Managing your money abroad

Heading abroad? A flexible approach is generally best. This means using a mix of cards and cash so you have some backup if your primary source of money is lost or stolen.

Your debit card can often be the cheapest and easiest way to pay for things when you're on holiday, and using it lets you spend your money the same way as you do at home. It also allows you to withdraw money from ATMs abroad as you go, so you don't have to worry about buying the right amount of foreign currency beforehand or carrying large amounts of cash while travelling.

Remember to inform your bank before you go abroad, as sudden transactions on debit or credit cards in a foreign country could trigger a fraud alert on your account.

If your bank is a member of Global Alliance, you’ll be able to use your debit card in partner banks’ ATMs worldwide, with no transaction charges ( Other charges will apply). And the exchange rate you'll get is based on the wholesale rate – usually much better than what you'll get at a currency exchange while on holiday. Find out more from your bank what the daily withdrawal limit is on your card so you don't find yourself low on funds (the limit is generally about £300).

If your card is linked to the major global payment schemes such as Visa or MasterCard, you'll be able to withdraw cash in hundreds of countries worldwide at more than a million ATMs. Most ATMs in non-English speaking countries have an English-language option you can choose; sometimes the machine will even default to English when it reads your card.

Credit cards are great for making larger purchases (such as paying for accommodation), or for emergencies. If you use them to withdraw cash at an ATM, however, you may incur cash-advance fees, so enquire about these with your credit card provider first.

If you prefer to take cash with you, you can purchase foreign currency through your bank before your departure. Often your local bank will have lower (or no) commission fees for foreign currency purchases or buybacks.

• Pack a list of emergency telephone numbers to call in case your cards, travellers cheques and passport are lost or stolen, as well as a list of the serial numbers of your travellers cheques. If the worst happens, call to cancel them immediately.

• Exchange foreign currency with a recognised currency trader, such as a bank or exchange bureau. Changing money on the street is a great way to get ripped off, especially if you’re not familiar with the local currency.

• Make sure you know the PIN of any cards you intend to use. If you do have to sign for your purchases, ensure the entire transaction is done in front of you. If the merchant uses a manual credit card swipe machine, ask for the carbon sheet afterwards to prevent your signature being copied.

• Familiarise yourself with the local coins and banknotes before you leave so you don't pay too much or get shortchanged.

• Use common sense when using ATMs at night – make sure they’re well-lit and secure – and don’t advertise the fact that you're carrying cash