Brits heading off on holiday overseas this summer may still be unsure about how to manage their money while abroad. There are so many options to choose from, whether using a credit card, debit card, pre-paid money card or even travellers' cheques. It can be very confusing, with little clarity on which method is the most sensible and saves the most money. Follow these tips to make sure that summer holidays are affordable.

Prepaid cards or debit and credit cards?

The first thing British holidaymakers should do is look in their wallets and purses to see what cards they have, explained financial journalist Andrew Hagger. For those that have credit or debit cards, they should get on the internet, go to their provider's website and find out exactly what the costs are of using these cards abroad.

Once they are aware of the charges, they should look to the prepaid card markets and compare the prices. It is more than likely travellers will find they will be able to save a quite a bit of money.

When it comes to prepaid cards, there are two options: sterling-based cards and specific currency cards. With the sterling cards, holidaymakers add however much they want to the card and then every time they make a transaction, the exchange rate at that given point will be used.

For the currency cards, travellers get a card in, for example, US dollars or euros, and then have the exchange rate locked on the day they put the money on it.

"[With currency cards] you know exactly what you're getting for your money – it protects you from any fluctuation in the rate," said Mr Hagger.

"Although it could go the other way – you could lock in and it could improve. [However], for people who are going on holiday in a week or two, I don't think you're going to see a massive change."

These are the two different types of cards, but it is important to understand that different providers have varied charging tariffs, so it is important to shop around. Regardless of which prepaid card holidaymakers choose, they will find they are cheaper than debit or credit cards.

The problem, however, is that it's quite difficult at the moment to compare different prepaid cards, when it should really be very easy.

The hidden costs of debit and credit cards abroad

Travellers using debit and credit cards could expect quite high charges while they are using their plastic overseas. So try to seek out banks that offer free cash withdrawals abroad.

"You know exactly what you're getting for your money – it protects you from any fluctuation in the rate. Although it could go the other way – you could lock in and it could improve," Mr Hagger explained.

Halifax, for example, charge £1.50 each transaction, no matter how much is spent, which is something holidaymakers should be very wary of if they tend to make lots of small purchases.

Travellers' cheques are still an option

Travellers' cheques are still available and an entirely viable and safe way to manage money while on holiday. But one issue to be aware of is the cost of exchanging them, Mr Hagger added. It can be particularly pricey if swapped in a hotel.

They work like pre-printed cheques for a fixed amount of cash that can be used abroad instead of money or exchanged while away. They are issued in either the local currency or in sterling and can be spent in shops and restaurants or swapped in banks and bureau de change.

Many people choose to use travellers' cheques because they are a safe way to carry money around, so long as whoever has them takes a note of the serial number of each one. This means they can be replaced if they are lost or stolen.

He believes that travellers' cheques are on the decline at the moment, given the fact that using a card is typically cheaper and they are almost accepted everywhere these days, with cash machines on every street corner in the majority of cities worldwide.

Holidaymakers who do choose to use travellers' cheques should make sure to shop around to look at a wide number of deals before they buy, different providers offer them at varied rates.

Exchanging money at the airport or destination

For travellers who don't have enough time to exchange their sterling to a foreign currency before they depart, there's no need to fear as there are plentiful ways to get cash before the flight or even at the destination. However, be wary as some are more pricey than others.

Never exchange money at an airport bureau de change. Much like the eateries and shops in the departure lounge, they use their monopoly to charge sky high rates, leaving the customer greatly out of pocket.

There are some services on the internet that allow travellers to order their currency online and pick it up at the airport. It means the cash can be picked up just before the flight, but is also at cheaper rate than at the terminal kiosks.

It may be easier to just use a bureau de change or bank at the destination country, as these will be cheaper than those in the airport. However, it is still important to shop around, as facilities in touristy areas may still charge a premium.