For anyone who has booked a holiday abroad this year, you are probably aware of the range of ways there are to pay for goods and services abroad. What you may not have considered is which is the best currency rate option for you, given the considerable variance in cost between each method. By looking at a few options we can help you decide what currency choice you should be making.

The most obvious starting point is cash, the main benefit of which is that it will be accepted in every store or restaurant you visit. It is unfortunately the most expensive option as well as the least secure. A high level of commission is normally charged when purchasing cash, and if a local thief gets their hands on it then it is gone forever with no recompense.

While you may be forgiven for thinking that travellers cheques are a thing of the past, they are in fact still a commonly used currency exchange option. Their real benefit is one of security, because if they are lost or stolen then they can be cancelled and replaced by the issuer quite easily. The problem with them is that next to nobody accepts them anymore. To exchange travellers cheques you will have to queue up at a local bank, and very few holidaymakers want to waste their holiday constantly queuing for money.

Credit cards are perhaps the most common method of paying when abroad and do have some advantages. They are accepted in most shops, offer security if lost, and can conveniently provide interest free credit if paid off in full. Excessive fees make credit cards an expensive option though, and many people have been known to lose track of their holiday spending and end up paying off the extra cost over the whole of the next year.

The debit card is very similar to the credit card. Benefits offered are almost identical save for the credit facility, but higher withdrawal charges and slightly less acceptability make the debit card a less appealing option.

The prepaid currency card combines elements of all previously mentioned options and is by far the best for the average holidaymaker. Like credit and debit cards they offer security and convenience, but at a fraction of the cost as fees are lower and a better exchange rate than cash is offered. In addition, you are unable to overspend as the card is loaded with an amount determined by yourself before you depart.

In conclusion, the prepaid currency card is the best option to choose when looking for the best currency rate. While many other options are available, they are probably best used as a back up only and by using a prepaid card you are safe in the knowledge that you will not spend any more than you have budgeted for.

Personally, my best advice would be make sure that you havent left without a prepaid card. They give you the best foreign currency rates by far, and I like their security features as well.