Traveller checks for spending abroad

Holidaymakers should be aware of the pros and cons of using cash or cards when planning a foreign trip, writes Laura Slattery.

Assuming you're still in the red after paying for your SSIA celebration holiday, organising your money needs when overseas will require only a touch of common sense.

If you've booked a fortnight in a chalet on a remote mountain in the Alps, it's more than likely that cash will be king at the local village boulangerie. On the other hand, if you prefer your holidays to involve foreign but urban civilisations, you can pretty much use your ATM card and credit card as you would at home.

The former should have the Cirrus, Plus or Link logos on them to access overseas ATMs.

Inside the euro zone, cross-border regulations mean it should cost the same to withdraw cash from your current account at an ATM in Copenhagen as it does in Cork. But if the cash withdrawal is in another currency, account holders will be charged a currency conversion fee based on prevailing interest rates.

The same is true for credit-card transactions. Non-euro purchase fees on credit cards range from 1.5 per cent of the transaction value to 2.75 per cent.

If credit cardholders make cash withdrawals using their cards, they will pay cash advance fees of 1.5 per cent of the transaction value. Some card providers will waive this if cardholders have loaded up their cards so that they're in credit rather than in debt after they have made the withdrawal, but cross-border handling fees will still apply.

Using a credit card for cash withdrawals can be a dangerous game in any case as, according to the financial regulator's credit card cost survey, only AIB, Bank of Ireland, Permanent TSB and American Express offer an interest-free period on cash.

Not everyone wants to use their credit cards on holiday. The temptation to spend more than you can afford to repay within the interest-free period may be too strong, and exposure to double-digit interest rates will swiftly follow.

Carrying too much cash, however, is a little unnerving from a security point of view, even if it is stored in a padlocked moneybag.

The traditionally safe option used to be travellers' cheques. While these were always a little more trouble than they were worth, they are now virtually impossible to buy and cash in.

Debit cards don't pose the same degree of risk to our long-term finances as credit cards - even if overseas travellers have an authorised overdraft, it is unlikely to be as high as their credit-card limit.

Up until recently, however, Irish bank customers could only avail of Laser debit cards, which is the national debit card scheme.

Laser cards with the Maestro symbol will be accepted abroad in shops that take Maestro, but not everywhere does.

Halifax now offers its customers a Visa debit card that can be used internationally at payment terminals and ATMs. Visa is ahead of the national debit card schemes in its compliance with the EU's Single Euro Payments Area (Sepa) programme, which is designed to standardise all European debit card schemes.

The idea is that a debit card issued in one country should be automatically accepted by card-reading terminals in another euro-zone state. By 2011, national debit card schemes - like Laser in its current form - will be phased out.

Sepa is likely to make spending money within the euro zone even more straightforward than it is under the single currency.

For people travelling outside the euro zone, it's still a matter of planning ahead and having enough cash to get by should plastic cards fail.

And the most organised of holidaymakers will remember to order currencies at their local bureau de change up to five working days before departure.