Nine in 10 Brits overspend on holiday every year because of confusion on exchange rates and hidden fees abroad.

According to foreign exchange provider Travel Money Club, some travellers will spend more than double their budget, with one in four expecting to run out of cash by day three, because they've no idea what they’re spending in the local currency.

However, it doesn't have to be so complicated.

With the summer holidays almost upon us, families will be looking forward to jetting off to warmer climes - but where should you be buying your travel money?

The pound has fallen in recent months against many currencies, including both the euro and the US dollar, mainly due to uncertainty around Brexit.

In fact, the pound has lost more than 5% of its value against the euro since May. Some currency suppliers are offering their lowest exchange rates since August 2017, and many high street providers are offering their customers just above parity on the euro.

This means holidaymakers will have to be even smarter with their cash to make sure they get a good deal - taking advantage of comparison websites and travel money tips to get the best value.

Brits are getting less for their pounds thanks to Brexit chaos (
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Getty)

Don Clark, founder of Travel Money Club, said: "Foreign currency is a minefield for holidaymakers if they don’t know what to look out for.

"Familiarising yourself with the current conversion rates and reading the small print on charges and commissions will prevent unexpected surprises when buying foreign currency."

If you're heading abroad, there are some simple guidelines to follow to make sure you get a fair deal.

First up, compare deals. Those who buy at the airport face paying 10% more than the high street - but if you reserve online and pick up later, you could still be quids in.

Secondly, always choose local currency when paying in shops, restaurants and even ATMs overseas. This may feel counterintuitive, but it means you won’t be hit with an (expensive) currency conversion fee.

If this happens to you, and you’re billed in pounds, refuse it. Write 'DCC rejected' on the receipt and insist on being charged in local currency.

And, if you can, aim to travel where the currency offers good value. At the moment, Turkish lira, Croatian kuna, Bulgarian lev, Romanian leu, Thai baht and Australian dollars are all weak against the pound.

That means you pay less to get more holiday money.

Here's what you need to know about buying travel money ahead of your holiday.

1. Book your currency online

Online bookers stand the best chance of getting the most for their pound

For the best rates, order your currency online in advance of your trip. This will give you access to not only the best prices, but also the option to lock in a rate - which you can later turn down if the pound improves further.

For example, Travelex allows you to reserve money 30 days in advance and cancel up to 24 hours before you leave - enabling travellers to get the best value for their pound.

When ordering online, check out any delivery or handling fees you may have to pay (often around £5) - and factor these into the best deal you've found. Also look up any minimum order requirements, if you're looking to exchange a small sum, an online agent may not be right for you.

Make sure the website you're buying from is genuine. Look for the padlock sign next to the URL, run a search on the site's name beforehand and make sure your device is protected. See some tips on how to spot a fake website, here.

2. Avoid the airport

"If you leave it as late as the airport, you’ll face among the worst exchange rates in the country" (
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Jaun Barreto/AFP/Getty)

The priciest decision you can possibly make is to trade your money at the airport.

That's because airport concessions offer some of the highest rates around - and you could end up flushing half of your holiday savings down the drain.

According to figures, exchange rates at the airport can be more than 10% more expensive than elsewhere, meaning that you could lose £100 for every £1,000 you exchange.

"Don’t leave changing money to the last minute, you’ll miss out on better rates and end up paying as much as 19% more meaning you could lose £150 for every £1,000 exchanged," FairFX chief executive Ian Strafford-Taylor told Mirror Money.

"Airports offer some of the worst exchange rates in the country."

Left travel money to the last minute? Check which companies have a bureau de change in the airport or ferry terminal you’re travelling from and order online for airport collection. You’ll lock in a far better rate (even just hours before you travel) than if you wait and buy it over the counter.

3. Set up a tracker - and cash in on the spike

An automatic tracker will alert you when rates are high (
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PA)

Set up a rate alert with an online currency provider and you'll get notified when the rates move in your favour. These are available on most major travel money websites - or download an app on your smartphone instead.

Vincent Arcuri at Travelex explains: "When it comes to buying your travel money, getting the best value is all about finding the most purse-friendly exchange rate.

"One way to get the best deal is to use a Travel Rate Tracker. This monitors exchange rates so you don’t have to, and helps you get the most foreign currency for your pounds.

"Remember, it's important here to look at the total price that a transaction is going to be and not just at the exchange rate, since there can sometimes be additional fees added to your purchase."

4. Choose more than one payment method

Carrying cash is great - but what happens if it goes missing abroad? (
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Getty)

Don't put all your eggs in one basket, explains Emma Coulthurst at TravelSupermarket, instead, opt for more than one payment method and you won't lose out.

"Carry a market-leading credit or debit card for use overseas, a prepaid card and also some cash.

"Make sure you get credit and debit cards that are specifically designed for overseas usage with minimal (if any) charges," she adds.

"But, be careful. Many credit and debit cards carry a 2.99% transaction fee with some having additional one-off fees for purchases. That’s an extra £2.99 to pay for every £100 you spend.

"Debit cards also tend to include a hidden currency loading fee which can add as much as 3% to the cost - so watch out."

Metrobank, Starling, Monzo and Cumberland Building Society all offer accounts with debit cards that don’t charge for use in some countries.

Halifax, Tandem and Nationwide are also amongst a handful of providers who offer credit cards with no fees for spending abroad.

5. Invest in a prepaid travel card

With a prepaid card, you'll be able to lock in rates - but if the rate improves, you could lose out (
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Getty)

Using a prepaid card means that you can top-up and lock-in a deal when the rate is highest.

To activate, all you need to do is sign up, load it up with money and then use it just you would any debit or credit card abroad (wherever you see a Mastercard or Visa symbol). No credit check is necessary - but you must be at least 18 to apply.

One of the key advantages of prepaid cards is that if it goes missing or gets stolen abroad, your cash is safe - and you can get it blocked in minutes (the faster you act the better on contactless ones).

The downside is that it offers no financial security (like say Section 75 on your credit card). It can be used almost anywhere, but not at petrol stations or to hire a car, in most cases, you'll also have to pay ATM withdrawal fees.

Prepaid card pros

✓ Spend only what you top up, and no overdraft means you won't go into the red.

✓ Top up as and when, usually on your smartphone on-the-go.

✓ Pre-top up means you can lock in a good rate and spend the cash later.

✓ No credit checks necessary - ideal for those with a poor score.

✓ No transaction fees

Prepaid card cons

✗ Prepaid cards have a limited shelf-life, usually of two or three years - watch out for fees after this period.

✗ Locking in a rate means you may lose out on a lower one at a later date.

✗ Usually charge ATM fees and some will add on top-up fees, too.

5 best Europe prepaid cards

MoneySupermarket have shared some of their best ranking cards for summer (
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Matt Cardy)
  1. FairFX Euro Currency Card Special: No transaction fees, no monthly fees, no card fee (on top ups above £50). An ATM withdraw fee of €1.50 does apply.
    Warning: There is a fee of 1.75% when card is used out of the Eurozone.

  2. Caxton Prepaid Currency Card: No transaction fees, no monthly fees, no card fee. A UK ATM withdraw fee of £1.50 does apply, however free abroad.
    Warning: Avoid using your card for security deposits, automated petrol stations, car rentals and hotel deposits.

  3. WeSwap Prepaid MasterCard: No transaction fees, no monthly fees, no card fee. An ATM withdraw fee of €1.75 does apply.
    Warning: After first 0% fee seven day swap, commission of up to 2% charged.

  4. Revolut Euro: No transaction fees, no monthly fees, no card fee and no ATM fees apply up to £200 (2% thereafter).
    Warning: On Saturday and Sunday, a 0.5% fee will be applied to the exchange rate to cover rate fluctuations.

  5. Travelex Money Card: No transaction fees, no monthly fees and no card fee. A UK ATM withdraw fee of £1.50 does apply, however free abroad.
    Warning: There is a monthly inactivity fee of £2 per month, should the card become dormant for 12 months.

5 best Dollar prepaid cards

Using your debt card abroad could end up costing you a lot more than you bargained for (
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GETTY)
  1. FairFX Euro Currency Card Special: No transaction fees, no monthly fees, no card fee (on top ups above £50). A UK ATM withdraw fee of $2 does apply - or £1 internationally.
    Warning: There is a fee of 1.75% when card is used outside of the USA.

  2. Caxton Prepaid Currency Card: No transaction fees, no monthly fees, no card fee. A UK ATM withdraw fee of £1.50 does apply, however free abroad.
    Warning: Avoid using your card for security deposits, automated petrol stations, car rentals and hotel deposits.

  3. WeSwap Prepaid MasterCard: No transaction fees, no monthly fees, no card fee. An ATM withdraw fee of $2.25 does apply.
    Warning: After first 0% fee seven day swap, commission of up to 2% charged.

  4. Revolut Dollar: No transaction fees, no monthly fees, no card fee and no ATM fees apply up to £200 (2% thereafter).
    Warning: On Saturday and Sunday, a 0.5% fee will be applied to the exchange rate to cover rate fluctuations.

  5. Travelex Money Card: No transaction fees, no monthly fees and no card fee. A UK ATM withdraw fee of £1.50 does apply, however free abroad.
    Warning: There is a monthly inactivity fee of £2 per month, should the card become dormant for 12 months.

6. Travel credit cards - the best ones

Everyday debit and credit cards are seen as convenient, but when you use them overseas there’s a risk of being stung by a host of charges and hidden fees without even realising.

That's why you have to be very clever when choosing the right one - with some changing as much as 5% just to withdraw cash at an ATM.

Editor of Money.co.uk, Hannah Maundrell explains: "It is possible to get non-sterling transaction fee-free debit cards, however you'll need to move bank accounts, which is why getting a credit card and using it right would be your better option."

When picking the right credit card, make sure you have provisions in place to make sure you don't miss any payments - aim to pay it off in full as soon as possible so you're not charged interest.

"Also remember to check your chances of being accepted before you apply so you can see which you’re most likely to get - this will avoid any flags on your credit report.

"If you’re travelling outside of major cities then it can be better to go for Visa or MasterCard over an American Express."

Opting for a travel money credit card means you can avoid any transaction and ATM fees, while some will even earn you cashback on your spending. Always remember to pay in the local currency though, and not pounds, as this allows your card to do the exchange, which will be the better rate.

What else do I need to know?

There are some very common mistakes to avoid
  • If you are applying for a prepaid travel card, order it in good time as it could take up to 2 weeks to arrive.

  • Check your credit score before applying for a new credit card to see how likely it is that your application will be accepted. Free-to-use websites such as ClearScore will show your score.

  • Before arriving at your destination, compare rates and fees for using your existing cards abroad. Contact the providers of each to ask about transaction costs, purchase fees and cash withdrawal charges.

  • When abroad, pay in the local currency – retailers overseas often set their own exchange rate to convert their currency back to pounds, and it is unlikely to be cheap.

  • Go online for the best rates. Online providers have lower overheads and you can save around £40 per £1000 spent if you buy online compared to the high street. If you don’t want to wait in for home delivery, you can still take advantage of the online rates by using a ‘click & collect’ service that many providers supply. Order online and walk into a store to collect in person all whilst getting the better online rates. Examples of best places to click & collect include: eurochange, Ramsdens, No1 Currency, Post Office.

  • Supermarkets have some of the best exchange rates on the high street, as they offer a wide range of products so don’t just rely on currency to make a profit, and can therefore offer better deals. If you run out of time to buy from an online outlet you can buy online from a supermarket and collect it in-store while you’re stocking up on last minute sun screen and travel snacks.