Based on an average spend of £500 per person while on holiday, the research shows that foreign exchange and transaction fees soon add up. Moneysupermarket.com urges holidaymakers to reduce credit card charges by shopping around for the best credit and debit card deals.

Steve Willey, head of credit cards at moneysupermarket.com, said: “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 3.0 per cent.”

According to Nationwide, the often ‘hidden’ charges, accounted for more than £650 million in 2007. Despite being the most convenient way to carry and spend money abroad, these figures show that credit and debit cards are often not the cheapest option.

Jeremy Wood, divisional director at Nationwide, warned: “People who are planning to go abroad this Easter should be aware of the hidden charges that most card providers impose, which are both costly and unnecessary.”

© Fair Investment Company Ltd