MARTIN Lewis has warned holidaymakers over five simple mistakes to stop losing money while travelling abroad.
The money guru returned to the Martin Lewis Money Show to reveal how tourists can avoid paying extra charges - and save money.
While travelling abroad, most tourists tend to pay in pounds as it seems to be the obvious choice.
However, choosing this option can make you pay more when tapping your card on a foreign machine.
This is because the overseas bank will do the conversion to pounds and the rates are more unfavourable.
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If you choose to pay in the local currency your card will instead do the conversion which is usually much more favourable.
And if you are using a specialist travel card you will get a "near perfect" exchange, while those not using the card will likely face 3 per cent fees.
Martin warned that you should always opt for paying in the local currency when asked and not select the option for paying in sterling.
He said: “When you are paying in plastic overseas, you always pay in the foreign currency - you do not pay in pounds.
"Here’s why: if you pay in pounds, it’s the overseas ATM or shop that does the conversion and every time I’ve tested this - and I’ve done this many times - it’s a pants exchange rate.
The money expert also warned that airports are the worst place to take cash out while going on a foreign trip, simply because you pay the highest fees at airports.
He said the best place was to compare rates online and then make an order.
"If you just want cash for travelling abroad… go on to a comparison tool and get yourself the best rates. So for $1,000, you’re going to be paying less than £800 for the best rates, £810 or more on the high street.
"Do it at the airport and it could cost you up to £950. If you’ve left it so late that you have to do it at the airport, call them up and prebook your money - you’ll get a better rate."
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Martin's third warning was about using a credit or debit card to get the best exchange rates.
Debit and credit cards usually offer exchange rates for the day you tap the card.
However, using prepaid foreign exchange cars, you could get the best exchange rates for the day you actually top it up.
Marti said: "With prepaid cards, you can opt to get the rates of the day you top the card.
"So if you thought the Euro rates were gonna drop, you could lock in today's rate. And if you think the rates are going to go down further, you could put 50 per cent money today and 50 per cent on some other day to get the best exchange rates and spread the risk."
Another warning from Martin was to stop taking out cash to give pocket money to minor children.
While it may sound like the easiest way to give your little ones some cash to spend around, you actually lose more money while withdrawing from a foreign ATM.
Martin advised on getting prepaid cards for those under 18.
You can load any amount you wish to give your child and they can spend it without losing money on cash.
He said: "Prepaid cards for minors have spending limits - you can set up how much you want them to spend and see what they are spending money on.
"And almost all of them give near-perfect exchange rates."
The last warning from Martin was that visitors should change their currency before the trip - and not while they are abroad.
This is because it is better to change the currency while still in the country, simply because you have more options in terms of exchange agencies to choose from and get the best rates.
He said: "What I would normally favour is to change to Euros before the trip. I would do it via a comparison site."
