Compare our best travel money deals

Carrying around a large amount of cash isn't the safest thing to do. At the same time, not having enough cash can cause a lot of headaches too. It's a good idea to take a little more than you think you'll need.

But it's also good sense to have a backup prepaid, debit or travel credit card that you can rely on - assuming you're going to a destination that widely accepts card transactions.

Not all currency exchange companies are created equal. Some may have good exchange rates, but higher fees. Others may have higher rates, but no fees. You have to make sure which one offers the best value to you.

This is why it’s worth comparing the deals on offer from several companies before ordering your travel money. Factor in the fees and the exchange rate and see where you end up better off. Often the amount of money you're exchanging can be a deciding factor.

Airport holiday money providers have notoriously high prices because they offer a last-chance solution for those who are just about to board a plane. By planning ahead you can save a small fortune.

Notes of large denominations can be tricky, as small shops and taxi cabs, which are more likely to require cash, might not have enough change to accept a large note.

Some retailers are also often wary of accepting large notes. Smaller notes and change can also be handy when it comes to tipping or buying small everyday items.

Avoid buying foreign currency with a credit card as credit card providers treat the transaction as a 'cash advance'. Not only will you be charged daily interest, you're also likely to be hit with a fee.

Travel credit cards - i.e. the ones with no foreign transaction fees - offer two key advantages over travel money:

• Great exchange rates - when you spend on a travel credit card you get the American Express, Mastercard or Visa exchange rate, which is about the best you can find as a regular consumer

• Purchase protection – for purchases costing £100 to £30,000, you're covered by Section 75 of the Consumer Credit Act, meaning if something goes wrong you can make a claim with your card provider should the vendor fail to pay up

However, not everywhere accepts travel credit cards and using them at a cash machine abroad can come with hefty fees. It can also be easier to overspend on a credit card, leaving you with debts on which interest is charged.

Currency cards and travel bank accounts let you spend overseas without being charged a foreign transaction fee. Their key strengths are:

• Great exchange rates – the best card providers will pass on the Amex, Mastercard or Visa rate to you without adding extra charges

• No charges for some ATM withdrawals overseas - if you need extra cash on holiday, some providers let you make a number of withdrawals per month or withdraw up to a certain amount without being charged. Watch out for local ATM fees though, as these might still apply 

The downsides include that there can be limits on how much you can withdraw abroad using a travel money card, and that they're not accepted quite as widely as cash. Some travel current accounts also come with fees.

Prepaid travel cards can be loaded with currency and used abroad without paying foreign exchange fees. You can load a prepaid card with a specific foreign currency or a variety of different currencies, depending on your travel plans. The key advantages are:

• Low or no fees to use abroad – prepaid travel card providers can charge far less than traditional banks for overseas usage

• Safer than carrying cash - you can cancel or freeze the card if it's lost or stolen, protecting your balance

However, you’ll need to watch out for general usage fees, which often apply when you load the card with cash and may also be charged monthly.