The value of sterling has sunk this week, as investors get jittery about the possibility there will be no clear winner in the next General Election.
Surveys show that Labour and the Conservatives could be neck and neck in the polls, meaning there could be a hung parliament within a few months.
That tends to be bad for the economy, so city investors are fretting and this has dropped the value of the pound.
If you're heading into Europe or further afield, that means your money is worth less - so how can you make the most of your money?
Don't exchange money at the airport
Never change money at the airport - you'll end up paying much more. Go online to find the best rate of exchange. The currency can then be posted to you, or you can collect it at the airport.
Commission-free deals may not be best
When you're exchanging money, you may be attracted to a bureau that advertises commission-free deals.
However, these aren't necessarily the most competitive. The bureau may not be charging commission but it may be cashing in through the exchange rate it offers. Make sure you compare the total cost in sterling of your foreign currency.
Be careful of credit card fees
Although a credit card may be a convenient way to spend overseas, it can be costly. Most providers will charge you a conversion fee of between 2.5% and 3.0% when you use a card outside of the UK.
Our credit card comparison tool helps you find cards that don't charge for international spending, like the Santander Zero Card and Post Office Credit Card which have no overseas loading fees.
Don't withdraw cash on plastic
Always avoid using your credit card to withdraw money overseas. In addition to a conversion fee, you'll also be stung by a cash withdrawal fee, which is usually around 2.0%.
Credit cards also tend to charge a higher rate of interest on cash withdrawals, so this can cost far more than you think.
Price up protection
Although a credit card might cost you more overseas, it could be worth it if you make a large purchase.
Under Section 75 of the Consumer Credit Act, the card provider is equally liable with the retailer for purchases worth between £100 and £30,000.
So, you may decide it's worth accepting the fees to receive this extra peace of mind.
Pay in your local currency
If you use a credit or debit card to make a purchase, many overseas retailers allow you to pay in sterling rather than the local currency. However, the exchange rates will almost certainly be dire, so your purchase will cost a lot more.
If you are given the option of which currency to pay in at the point of sale, always choose to pay in the local currency. That way you will benefit from the Visa or Mastercard rate of exchange which will probably be much more competitive than the retailer's own.
Pick up a prepaid card
Although you won't get the protection offered by a credit card, a prepaid card could be safer than carrying wads of cash.
You can pick up a specialist prepaid card that you load with the currency of your choice, for example, dollars or euros.
A prepaid card may well be cheaper than the fees you'd pay if your existing plastic isn't suitable for overseas spending.
So, if you've left it too late to apply for a good overseas credit card, this could be an easy way to save money.
Mix and match to maximise your money
Credit cards are a great travel money option, so long as you choose a card designed for overseas use. However, to make sure you don't get stung by any hidden charges, make sure you also carry some local currency and perhaps a prepaid card.
That way you have some cash for taxi fares and small purchase, and won't have to make expensive withdrawals on your credit card.
Use sterling on the plane
When you're flying home, you may be tempted to use up any remaining foreign currency on the plane but this can be an expensive option.
Airlines charge a currency exchange fee and this is added to the foreign currency price. It's cheaper to pay in sterling, so don't give the airline money for nothing.
Please note: Any rates or deals mentioned in this article were available at the time of writing.
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