A place in the sun on the Costa Less

Foreign holidays have a habit of soaking up more cash than expected, even when, as now, the pound is strong. Visitors to France, for example, can now get 10 francs to the pound, a third or more than last autumn, although that is not the same as saying the country is cheap: a small coffee in central Paris can still cost pounds 2 or more.

A survey published last week by Midland Bank found that more than four in 10 holidaymakers said they always spent more than planned. But making your holiday spending go further does not simply mean having to cut back on your enjoyment. Here are some tips on the best places to buy currency and the best-value payment methods. (see the article below for some tips on getting a good insurance deal):

Foreign currency. Beware special promotions of "no commission" currency as they may have a poor exchange rate. It is important to compare the overall deal.

The best place to buy foreign currency may surprise: Marks & Spencer has come out best for the past two years in surveys by the Independent on Sunday for people changing pounds 500. It makes no commission charges and also has keen exchange rates. Someone changing pounds 500 in M&S might get up to 3 per cent more from major currencies (150 more French francs or 23 US dollars, for example) compared with the main high-street banks or Thomas Cook. Presently, you can buy currency in only eight M&S branches (Oxford Circus, Marble Arch and High Street Kensington in London, Bath, York, Oxford, Newcastle and Oxford) though bureaux de change are also due to open in Brent Cross and Bayswater in London and Kingston in Surrey.

M&S claims to offer more than 50 currencies, although the more exotic may need to be ordered at two days' notice. It also says rates have now been standardised; previously Marble Arch seemed to have the edge, although it remains a mystery why M&S offers cheap currency at all. If an M&S bureau is not convenient, Royal Bank of Scotland, Bank of Scotland and American Express are among the best deals.

Plastic. Credit, debit and even cashpoint cards issued in the UK can be used widely in many holiday destinations. Putting spending on a credit card is convenient, and is generally a better deal than changing currency or using travellers' cheques. Exchange rates can vary by up to nearly 3 per cent between different card companies and it may be worth getting a card specially for overseas spending, keeping UK spending on something like Alliance & Leicester's Money Back credit card (which gives cash rebates of up 2 per cent on spending but gives poor exchange rates for foreign purchases). Frizzell Bank's Mastercard offers the best exchange rates but has an annual fee of pounds 11. A better option for many may be a no-annual-fee Visa card just launched by the Liverpool Victoria Friendly Society.

Its exchange rates are up to 2 per cent better than those on most credit cards and it also carries a free laser-photo picture of yourself to protect against fraud. Liverpool Victoria says it may take up to 14 days to issue a card, and this sort of delay may not be unusual among other companies, so get your skates on if you want a card.

It may also be worth taking your UK cashpoint card abroad for withdrawing local currency from foreign cashpoint machines, rather than taking wads of currency with you or using a local bureau de change. Cashpoint cards carrying Cirrus or Visa symbols can be used abroad. If yours does not carry either symbol, ask your bank. In most cases they will be able to issue a compatible card at no extra cost. Typically you will be charged 1.5 per cent, with a minimum of pounds 1.50, on withdrawals. The same cards should also work for "switch-style" debit transactions in shops and the like, but given the choice you are better off using credit cards for this spending as you avoid the 1.5 per cent fees.

Credit cards can also be used for cashpoint withdrawals. Contrary to popular belief this rarely means extortionate interest bills; often, as with cashpoint withdrawals, all you will be charged is a 1.5 per cent/pounds 1.50 fee (on top of the underlying exchange rate), assuming you pay off your bill in full at the end of the month.

Travellers' cheques. Plastic cards are increasingly taking over but "travellers" are still the best bet if you are going off the beaten track. M&S sells Visa-branded cheques at the same keen exchange rates as it sells currency but with a 1 per cent administrative charge (except for dollar cheques, which are commission-free).

Contacts: M&S Marble Arch 0171-224 6850; Frizzell Bank 0800 373191; Liverpool Victoria Credit Card 0800 134134; Alliance & Leicester Money Back credit card 0500 83883.