Whether you’re off to Europe, the US or a more exotic location, taking the right credit and debit cards will save you a small fortune in currency exchange and handling fees.

Which Money? checked out the cost of buying $500 at 15 high street outlets that offer ‘commission free’ foreign exchange and found that costs varied by almost £15 thanks to varying exchange rates. The costs can be even greater if delivery charges or buy-back fees are added.
 
The cheapest providers for purchasing $500 was First Choice (£260.42) and Marks & Spencer (£260.69), while the most expensive were Going Places (£267.56) and Thomas Cook (£274.73).

Even if you obtain a good exchange rate, total costs could be bumped up by extra charges, such as delivery charges which are compulsory with Saga because they will only deliver currency.

Some companies  offer a ‘buy back’ service, whereby  they guarantee to buy your leftover currency when you get home at the same rate you paid for it, but think carefully before agreeing to this, as it usually costs extra and the exchange rate might have moved in your favour by the time you get home.
 
Also check your travel insurance policy for how much cash you are covered for in the event of theft. You don’t want to carry around large amounts of cash if you’re only covered for £200.

Cash machine withdrawals
For cash withdrawals from a cashpoint machine while abroad, the Nationwide Flex Account debit card is the most competitive, with no foreign exchange loading of 2.75 per cent or handling fees which are typically £1.50 per withdrawal with other providers.

Whatever you do, don’t use a credit card to obtain cash from a cash machine as the interest charged will be higher than for credit card purchases, there’s a 3 per cent handling fee and interest is charged from the date of withdrawal.  Withdrawing £500 with a Barclaycard credit card could cost £26.25 in fees.
 
Credit card purchases
For credit card purchases, the Abbey, Post Office, Saga, Thomas Cook and Nationwide Gold Visa credit cards are the most competitive - again because they don’t load an extra 2.75 per cent currency exchange fees.

Five  purchases totalling £500 would amount to £13.75 using a Barclaycard credit card, or £21.25 with a Halifax debit card.

For more details, visit www.which.co.uk

Following  scathing criticism from watchdogs and consumer grouprs of insurers who flog expensive payment protection insurance policies to unsuspecting customers,  the FSA has launched a comparison service http://www.fsa.gov.uk/tables/bespoke/PPI on its website to help consumers shop around for more competitive policies.
 
PPI insures you in the event that you can’t repay loans, credit cards or a mortgage due to accident, sickness or redundancy.

The Competition Commission recently published a report accusing  insurers of overcharging their PPI customers by £1.4bn a year and of using PPI to subsidise cheap personal loans.

The FSA’s tables are designed to provide  customers with basic information about exactly what the polices cover and how much they cost.
 
Insurers stand accused of selling expensive polices inappropriately and to individuals who may never to be able to make a claim becuase they are unemployed, self employed or a temporary worker.

The FSA has levied numerous fines on financial companies and retailers, such as HFC Bank and Land of Leather, for mis-selling PPI policies in this way.

The Competition Commission has suggested imposing temporary price limits on PPI policies and to ban firms from selling PPI policies to customers when they take out loans or credit cards because they do not have the opportunity to compare policies at the point of sale.

The Financial Ombudsman Service has been inundated with complaints about PPI since 2007, when negative press coverage started to raise consumer awareness of possible mis-selling

Its comparison tables allow customers to type in basic details about their circumstances and financial needs and provide a range of possible policies, together with costings.

Although the tables are not comprehensive, because some providers refused to supply details of their policies, they  give consumers a better idea of what is on offer and shames those providers which declined to participate.

Defaqto principal, Brian Brown, who has recently written a report on the PPI market, warned consumers not to cancel existing policies without reviewing their position, unless you definitely do not want cover or find you are ineligible to claim.

You should also check what cover your employer would provide in the event of ill health (typically 3 to 6 months’ pay) or redundancy.

Mr Brown says: “Check that the policy you hold covers what you want protected, whether this is credit card, personal loan or mortgage repayments. Consider buying a stand alone income protection policy which works in a similar way to PPI, but can be considerly cheaper, especially for personal loans. These can be found on the Internet or at the Post Office.

“Alternatively, people can consider other strategies, such as building up a rainy day fund or using 0 per cent interest credit cards to tide them over during a period when they can’t work. “