Money: Don't get caught short

The great summer exodus is on. More than 23 million people are expected to travel abroad for their holidays this year, in many cases funding their breaks from free share windfalls gifted by demutualising building societies.

Organising each holiday involves meticulous planning, from inoculations to sun tan lotions, to the right level of travel insurance. One of the key decisions travellers need to make is over holiday money.

The most common way of taking money abroad is by using travellers' cheques. These involve a handling charge when they are bought in the UK and another charge when they are exchanged abroad.

However, travellers' cheques are recommended if a journey covers several countries. Cheques, typically available under American Express or Thomas Cook liveries, have serial numbers and can be stopped if lost or stolen. Replacements are usually available within 24 hours. Before travelling abroad, write down the serial number of each cheque and the emergency number to call if lost or stolen. Leave the numbers with a relative or friend. Each cheque should only be countersigned when it is cashed in.

Some cash will always be needed at your destination. When abroad, either deposit most of your cash with the hotel safe, or distribute it within a range of places in your hotel room and luggage, carrying just the minimum with you.

Most banks and building societies will exchange cash and issue travellers' cheques for non-customers.

While it may pay to shop around, as our table shows, savings will only mount up when many hundreds of pounds are exchanged in one go.

Points to watch out for include the minimum charge if less than pounds 200- pounds 300 is being exchanged, whether a handling charge applies (most banks have now scrapped them) and the speed of response to an order.

In the past few years, credit cards have become the simplest way of spending money overseas. More than 33 million cards are in use in the UK and increasing numbers - two-thirds at the last count - take them abroad.

Cards are convenient. They don't involve having to carry large wads of cash around. Moreover users are covered under the Consumer Credit Act. If your goods were faulty, the card provider is jointly liable, alongside the provider, and should reimburse the money, although in such cases it is important to keep the receipt.

Alongside legal protection, most credit card companies also offer bolt- on protection insurance, extendable to items bought outside the UK, and provide cover against damage or theft up to pounds 1,000. Barclaycard users already have this cover.

Credit cards are also increasingly popular for cash withdrawals from bank machines. Beware, though, that the cost of doing so is higher than making simple purchases and involves a 1.5 per cent handling fee, a foreign currency loading hidden within the exchange rate and no interest-rate free period. On the plus side, exchange rates should be better than those often available at foreign bureaux de change.

Debit cards, linked to a person's bank account, offer a similar means of obtaining cash or paying a bill. The system is run by Visa and MasterCard. There are a mass of network signs and symbols operating through both providers. The MasterCard network includes Cirrus, which allows cards to be used at hole-in-the-wall machines, and Maestro for purchases.

Visa uses the Plus logo for cashpoints and Delta for purchases. Electron, another name used by Visa, allows transactions to be debited to an account where it has enough funds.

Before setting off on holiday, check card expiry dates, the availability of outlets in that country and credit balances. Also, check whether the cards have the right logos enabling them to be used abroad. Card protection companies, such as CPP and Sentinel, have replacement and emergency cash facilities. Details of each are available from bank branches.

One new option from both Visa and American Express is the "holiday card", which travellers load with up to pounds 5,000-pounds 6,000 of spending money to withdraw from cashpoint machines. The Amex card is available for the US from Lunn Poly, Britannia and Woolwich building societies. Visa's card operates world-wide and comes through Thomas Cook, Bank of Scotland and Royal Bank of Scotland.

Non- Telepnone Home Type Commission Min Commission Min Handling Charge

customer Order Delivery Charge Charge (per order)

Abbey National No Yes No American Express 1% pounds 1.25 1.5% pounds 1.25 pounds 2

Alliance & Leicester Yes Yes K Yes K Thomas Cook 0.5% None 1.5% None pounds 3

Bank of Scotland Yes Yes Yes D VISA 1% pounds 3 1% pounds 2 pounds 5 home delivery

Barclays Bank Yes Yes Yes A VISA 1.5% pounds 3 2% pounds 3 None

Britannia No Yes Yes American Express 1% pounds 1.50 1% pounds 1.50 pounds 2.50

Halifax Yes Yes No American Express 1% pounds 3 1% pounds 1.25 None

Lloyds Bank Yes Yes No American Express 1% pounds 3 2% pounds 3 None

Midland Bank Yes Yes Yes C Thomas Cook 1% pounds 3 2% pounds 3 None

Nationwide BS No Yes Yes Thomas Cook 1.5% pounds 3 1.5% pounds 3 pounds 3.50

NatWest Bank Yes Yes No American Express 1%M pounds 4 1.5%M pounds 2.50 None

Post Office Counters Yes No No American Express 1% pounds 2.50 1% pounds 2.50 pounds 3.50 express

RB of Scotland Yes Yes No American Express 1% pounds 3 1.5% pounds 2 B None

Thomas Cook Yes Yes Yes L Thomas Cook 1% pounds 3 2% pounds 3 None

TSB Yes Yes J Yes J Thomas Cook 1.5% pounds 3 1.5% pounds 3 None

Woolwich BS Yes No No American Express 1% pounds 3 1.5% pounds 3 pounds 2

A = Premier cardholders only. B = pounds 1 if order less than pounds 20 equipment C = Credit card holders only D = If orderd through Phoneline E = Non-customers pounds 4 F = Orders not taken by telephone H = pounds 1K plus - 0.50% commosion per currency J = TSB debit and credit card holders only. pounds 2.95 postage charge for home delivery K = Allaince account holders only L = Only through Thomas Cook Direct on 01733 335535 M = Additional 0.50% for non-customers