Euro exchange can be an unfair exchange, so look for good deals

If you are travelling to the Continent on your hols, you will still have to change pounds to euros after the Chancellor's decision to hold off on the single currency, but beware of the measly exchange rate offers. Commission costs and exchange rates offered by foreign exchange bureaus at holiday airports are punitive, and the closer you get to the Continent the fewer euros you will get for your pounds.

Last week, the total cost of €700 at Travelex's bureau in Heathrow was £534.21, but £519.67 at Marks & Spencer on the same day. At Dover E Dock, Travelex charged £545.04. There are regional discrepancies in outlets such as Travelex and Thomas Cook. The cost of €700 at Travelex in Manchester airport on 3 June was £549.23, while on the same day, Thomas Cook charged £537.35 for €700 in London, but stung Mancunians for £540.46.

Thomas Cook says the prices reflect the difference in local overheads and ensuring the office was "competitive with local competition". Anthony Wagerman, head of marketing at Travelex says: "The rates charged depend on the costs prevailing where we are operating. The rates charged at airports are stipulated in an agreement we have with the landlord. Heath-row is owned by BAA and Manchester airport is not, and that is why the rates differ."

But when Kayzi Ambridge and her French partner, Manu, sought local currency on holiday on the Caribbean island of St Lucia, they were surprised to find a far better exchange rate in a bar than at the bank. Ms Ambridge, a Coventry-based utilities systems analyst in her 30s, says: "We came across an 'English' pub owned by British people in Rodney Bay, the main tourist area. Someone said it was a great place to get local currency at a good rate for sterling if you bought food or drink there at the same time.

"I think the owner limited you to one transaction per day or he'd run out of money, but he gave four Eastern Caribbean dollars (EC$) to the £1 as opposed to EC$3.25 elsewhere, so it was a significant benefit and helped him to get UK customers through word of mouth."

Before Ms Ambridge left the UK, she had bought EC dollars through American Express at EC$3.25 plus £2 commission. The couple found a two-tier pricing structure operated, with cheaper prices for locals and higher rates for visitors. By asking for a loaf in French, Ms Ambridge paid EC$1 instead of EC$2 if she ordered in English. Locals would also get a lower charge per night for a room than the standard EC$20 charged to others. The lack of local, willing labour meant some hoteliers would offer a free room for the night or reduced rates for guests prepared to whitewash their rooms.

Many of us look for the best deal in holiday money before we leave the UK. Most surveys place Marks & Spencer Financial Services (M&SFS) as the cheapest, closely followed by the Post Office, mainly because they have non-commission deals, as does Tesco Personal Finance. The high street bank Lloyds TSB has recently moved up the league table by eliminating commission on foreign exchange deals until 30 September, and HBOS is waiving commission until 31 December.

But getting hold of anything other than US dollars or euros can be difficult. AmEx holds 50 currencies in stock and provides access to many more, including the Lithuanian lita, Polish zloty, Slovenian tolar and the Slovakian koruna. Even AmEx does not offer the Romanian leu or the Kazakhstan tenge. But US dollars are happily accepted in former Eastern Bloc and used-to-be-USSR territories. The range of currencies offered elsewhere is growing, with 60 offered commission-free by Tesco in person, on the phone or by internet, from Australian dollars to Venezuelan bolivars. Marks & Spencer offers 52, the Post Office 21.

Another feature being offered by an increasing number of providers is delivery of an order to your home or workplace. M&S, Tesco, HBOS and the Post Office will deliver to your home for £5 the next day, and M&S waives the fee for orders of more than £500. But not everyone sorts out all their money before they go, and holiday money nightmares usually involve cashpoints that swallow debit or credit cards.

Imagine confronting a cash point that demands a six-figure PIN. This can happen in Portugal, South Africa and the US, but should not affect UK travellers because your four-digit PIN is cross-checked with your card number. The other cause of panic is being asked for a PIN when using a credit or debit card in a shop. In France, so-called chip and PIN cards have been in use for a decade.

But if you are confronted by a French retailer who insists on you entering a PIN, NatWest advises you to say this, prepared by the French Government Tourist Office: "Les cartes Britanniques ne sont pas des cartes puce, mais a piste magnètique. Ma carte est valuable et je vous serais reconnaissant d'en demander la confirmation auprès de votre banque ou de votre centre de traitement." In English, this means: "British cards are not chip cards, they have a magnetic strip. My card is valid. I should be grateful if you would confirm this by telephoning your bank or authorisation centre."

Another difficulty is when your card is refused by retailers or swallowed by a cash machine because your issuer suspects it is being used fraudulently and places a temporary referral on it. Barclaycard has a number for cardholders to inform them they are going away (0870 010 0578). This could be a double-edged sword, if someone gets hold of your number in notorious card-fraud countries such as Thailand.

The other factor to consider is what are you being charged for either using your card to buy something or to get cash. Some providers, such as Liverpool Victoria, are fee-free, but others, such as Barclaycard, impose a 2.75 per cent charge. But Barclays has joined five foreign banks in the Global ATM Alliance which means the customers of each can use the other banks' machines without the 1.5 per cent access fee.