Martin Lewis: How to get the best travel insurance on the market

As many of us set upon our annual summer holidays, we all want the best currency deal. But where do we find it? Martin Lewis gives us the lowdown - plus the best cards, their rates and how to avoid the dreaded pitfalls of holiday currency.

THE VALUE OF THE POUND: A few years ago, before the EU referendum vote, a pound bought €1.43 – since it's dropped significantly and hasn’t recovered much. Last summer it bought €1.14, and today it’s hovering around the €1.12 mark. Against the dollar, the rate is just $1.32 – about a decade ago it bought roughly $2. It’s similar with most other currencies.This has hit imports and the cost of living. Yet that’s an indirect cost to most. The most obvious effect is more expensive holidays.

APPLY FOR A SPENDING CARD: Apply now for a cheap overseas spending card. The easiest and cheapest way to spend abroad is on the right card, but they can take a couple of weeks to arrive, so early planning helps. Normally spend abroad on cards and it adds a 'non sterling exchange fee' of 3% ish, meaning £100 of euros costs you £103. Plus there are cash withdrawal fees on top. Yet specialist cards don't do that. These cards give you near-perfect rates every time you spend, on every trip to every country.

MARTIN’S TOP TRAVEL CARDS:

Top for cheap spending, reliability and a free £20.

The Halifax Clarity card gives near-perfect rates on spending everywhere, plus apply before 31 August, and spend abroad on it by the end of September and you get £20 cashback. The card’s been around a long time, and has very good feedback. It's better to spend on the card than withdraw cash, and of course, as it’s a credit card repay in full so there's no 18.9% rep APR interest. If you do withdraw cash, there's interest even if you repay in full (about £1.50 per £100 per month), but even that's usually better than bureaux de change.

2. Cheap spending & cash withdrawals, plus no credit check.

The debit card from app-only Starling Bankhas no charge for spending abroad and no cash withdrawal fee. Plus unlike a credit card there’s no credit check, (unless you want an overdraft) so anyone can get it - though it does do ID checks) Technically it's a current account, but you can just add cash to it for spending abroad as you needn't switch to it or make a min pay-in.

3. Top card if you want it for spending abroad and at home.

The Tandem credit card also gives near-perfect exchange rates on spending worldwide, plus 0.5% cashback on spending in the UK and abroad. So if you want to trouser just one card to pay off IN FULL and spend everywhere, this is a good option. Like the Halifax Clarity, its 18.9% rep APR for spending and cash withdrawals, but it's app-only (though has some poor reviews) and a new deal, so I don't know how long it will last.

BEWARE OF OVERSEAS DEBIT CARDS: Beware of the overseas debit cards from hell. Not only do these debit cards add around 3% to the exchange rate and an ATM fee, they also add charges every time you use them overseas. They are the standard card from:

- Bank of Scotland (50p fee per transaction)

- Halifax (50p fee per transaction)

- Lloyds (50p fee per transaction)

- Santander (£1.25 fee per transaction)

- TSB (£1 fee per transaction)

- Clydesdale/Yorkshire (no spending fee but minimum £1.50 exchange fee per transaction) - NatWest/RBS (no spending fee but minimum £1 exchange fee per transaction, though waived till Sep for most customers) Any other card, including a credit card (if repaid in full), is cheaper to spend on than these.

DON’T EXCHANGE MONEY AT THE AIRPORT: Want travel cash – think about it sooner and don’t leave it until the airport. Never wait until you get to the airport or ferry station to get cash, rates there are hideous. For example it can cost you nearly £1,050 to get €1,000 at the airport (not pre-ordered) compared to £900 via the cheapest online bureau and less if you spend on the cheapest overseas card. Ignore such marketing spiel as ‘commission free’ that just means they load the cost into the exchange rate. Instead just compare by simply asking how many dollars, euros or whatever you’ll get for your cash after all fees. Use an online travel money comparison site to do it for you is the easiest way.

WILL BREXIT AFFECT MY EUROS? Many who are going away later in the summer are asking “with the Brexit discussions should I buy euros now or wait?” Currency moves are unpredictable. If you're worried, buy half now (either via cash or a prepaid card - both of which effectively lock you in at today’s rate – the top rates tend to come from Revolut though it charges £5 to get direct, though search online and you can find it for free) and the rest using the best specialist credit cards once there (as they give you the rate on the day you spend).

DON’T BUY CASH OR LOAD A PREPAID CARD: Don't buy cash or load a prepaid card with a credit card. Most credit card providers count buying foreign currency as a cash withdrawal - and they usually charge a fee for those, and interest even if you repay in full. Some (including Santander and Virgin Money) do the same when loading up prepaid cards. So it's better to pay on a debit card, as they can't charge fees for it.

DON’T PAY IN POUNDS: Opt to pay in the foreign currency not pounds if they ask. If you’re paying on plastic and they ask you whether you want to pay in pounds or euros (or the local currency of where you are). Pay in euros. Then your card does the exchange rate, if not they do it, it’s usually worse.