Prepay your way to a budgeted get away

If you are going on holiday this summer you will most likely spend hours finding the best deals on flights, hotels and even sun cream, but you should make sure you get the best deal on your travel money too.

By taking the time to get a prepaid card before jetting away, you could save an extra £20 for every $500 or €500 spent - enough for an extra ice cream every day.

And although other ways of spending abroad are still more popular, many people others have wised up to the benefits of prepaid cards and the industry is growing rapidly. In response to the new entrants joining the market every week, moneysupermarket.com is launching its new prepaid card channel - which will not only list the best deals available, but also segment the market into foreign and domestic use. For more information go to moneysupermarket.com/prepaidcards/

Peter Harrison, head of travel money at moneysupermarket.com said: "Prepaid cards consistently offer great foreign exchange rates and are available to everyone. Not only could you get more Euros and Dollars for your Sterling, but you can also make sure you don't go overboard on your holiday budget."

If you plan on using a prepaid card when buying US Dollars for the use of withdrawals abroad, you should use the Caxton FX Global Pre Paid Card which has an exchange rate of $1.613 to the pound, and no transaction fees. Compared to using your normal high street bank's debit card you could save a bundle, and it's always worth checking the small print. For example whilst the NatWest Current Plus Account has a higher exchange rate of $1.64 to the pound, it has transactional fees of 2.75 per cent, and ATM charges of two per cent (minimum £2) - so it will cost you an extra £15.78 on 10 withdrawals of $50.

If you want to use a prepaid card when travelling around Europe and making purchases, you should use the FairFX.com prepaid card which has an exchange rate of €1.175 to the pound and no transaction fees. Whereas if you used your NatWest Current Plus Account debt card with an exchange rate of €1.18 to the pound you will get stung by the 2.75 per cent transaction fee, and it would cost extra £22.35 on 10 purchases of €50.

Peter added: "By taking the time to shop around before you go, and deciding which prepaid card suits your needs best, you can save a bundle on your holiday spending money. Also, beware of less competitive prepaid cards that often levy an application charge, a monthly fee and usage costs.

"But it's worth bearing in mind that although prepaid cards have their benefits and they will save you money versus some traditional debit cards, the Nationwide BS FlexAccount is still the most competitive way to spend both Euro's and Dollars this summer - it all depends what you want from your card."