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For many, it's just so easy to take your normal bank or credit card to an ATM in your holiday resort and just withdraw cash to spend on days out and evenings in bars and restaurants.

Stop right now....... read on for more details

Unless you have a market leading debit card, then you are being completely ripped off by a complex series of charges and fees and will find yourself paying way over the odds when taking out cash. Most credit card companies charge more if you want to use your plastic overseas and your banks will impose fees for using your bank card too.

And if you use your credit card for cash from a hole in the wall you will also pay interest immediately, which stacks up the cost. So check your card issuer before you travel to see what the charges really are of the convenience of using your own cards. However in recent days, Sainsbury's Bank have launched a new Gold Card where cash withdrawals are free if you pay your balance off in full when your statement is due. A first. although there are monthly fees to pay but this may be a good option for you. 

The only really good debit card for cash is from Nationwide, the Flex Account which is free until the end of October 2010 and has low cash withdrawal charges from November 1st onwards.

We do not recommend using any credit card for getting cash overseas except in an emergency due to the interest charges.

For cash we recommend taking out a pre-paid card or buying foreign exchange at market leading exchange rates. Read our guide to taking your money overseas for the best advice and read our jargon buster here.

But using my card in a shop or restaurant is fine though?
Again, beware. You will end up paying through the nose with both currency loading charges and transaction charges on many cards. Before using your cards, check that you know what you will be charged for a simple £100 transaction. This helps to give you some context for the true cost of your transaction and could be as high as 5% of the total cost.

So what should I do if I want to use cards?
Take out a card that has features specifically for low cost overseas usage.
There are some market beating deals for using cards overseas for use in shops and other outlets. These include the Nationwide Flex debit card or credit cards such as Halifax Clarity, Saga, Santander Gold or the new Sainsbury's Gold Credit card where transaction costs are either nil or very small and you get market leading exchange rates too on your purchases. For the best deals on credit ca4rds suitable for overseas use click here.

One of the benefits of using a credit card overseas is that if your purchase is over £100 you covered under the Consumer Credit Act if the goods are faulty or if a service is not delivered.

Top Tip - when overseas you may well be offered the chance to be charged in sterling rather then the local amount. This is called dynamic currency conversion. Whilst it seems like a good idea as you can see how much something is going to cost you in pounds, never accept this option. You pay over the odds for the money being exchanged by the shop or restaurant. Insist that the transaction takes place in the local currency of where you are.

Should I tell my card issuer I am intending to use my card overseas?
Most definitely yes. Many travellers have fallen foul of their card issuer blocking their cards when overseas. The reason this happens is that the card companies track unusual behaviour on your account and many will refuse a transaction if they think that your cards are being using fraudulently. This is done to protect you, so to avoid the inconvenience of having your card stopped, always tell your bank or card issuer you are travelling and intend to use your card outside of the UK.

So should I bother using my cards on holiday?
It has to be your decision; however using many cards incurs charges and fees that are expensive. Use either foreign currency or pre-paid cards to make your money go further, OR apply for one of the cards specifically designed for overseas use.