Weak pound hits holidaymakers

Sterling's fall in value, so €1 is now worth under 80p, will cost holidaymakers heading into Europe massively.

The UK currency has fallen in value by 17 per cent since last February – as the Bank of England cuts interest rates and UK economic growth slows.

The fall severely cuts Briton's spending power abroad – with a £500 budget now giving €100 less to splash out with.

Moneysupermarket.com estimates over four million Brits will holiday in Europe this month and will be hit by the weakening pound.

One way people can alleviate the pressures from the currency shifts is to opt for a credit card that will charge less for overseas use.

"While the strength of the euro is of concern to holidaymakers, using the wrong foreign exchange product can be even more costly," said Steve Willey, head of credit cards at moneysupermarket.

"A credit card with purchase protection of 90 or more days is the best option for purchases overseas. Not only do the credit cards from the Post Office, Nationwide and Saga offer this, but they also have zero per cent purchase offers of between three and six months and don't levy foreign exchange fees in Europe.

"This is a far better prospect than their rivals that charge between 2.73 and three per cent."

Mr Willey added the best card for foreign cash withdrawals was the Nationwide Flex debit card which has no extra charges.

"In contrast, a €100 withdrawal with a Lloyds TSB debit card will incur a £2 transaction charge plus a 2.99 per cent foreign exchange fee."

For those without time to apply for a new card before travelling, Caxton FX prepaid card is suggested as good option – which has limited charges for use.