There are ways to cut the cost, however, so check out these tips and save yourself some cash.
For purchases abroad
For UK residents who need to make purchases or withdraw cash abroad, a specialist credit or debit card could be the cheapest option.
The Halifax Clarity card does not charge a foreign exchange fee anywhere in the world, ensuring that you get the best possible rate. Neither does it charge for cash withdrawals. You will, however, be charged interest, ranging from 12.9% up to 21.9%, and though that's not a huge sum for regular spending abroad, you're really only going to save money if you pay off the full balance each month.
Ideal for sending money as a gift, online services for one-off payments are available as long as you're not sending huge sums of money.
Currencies Direct, for example, allows UK residents to transfer money in 25 different currencies usually within two days. Send anything from £500 up to £15,000 and you won't be charged a fee, so you'll get similar rates as if you were simply taking travel cash.
FairFX offers a similar deal, though the minimum fee-free transfer amount is £600, while Travelex is fee-free if you send more than £2,500, but below that the charge is only £7. The latter also boasts a price promise, so they'll match a competitor's quote provided you find a cheaper alternative within 30 minutes of getting your Travelex quote. All of the above have the advantage of being authorised by the Financial Conduct Authority (FCA) so your money will be protected if anything goes wrong.
For even smaller amounts, PayPal offers an instant transfer service provided both parties have an account (free to open), with no minimum amount. The sender pays a fee of 2.5% of the amount sent, while the recipient pays up to 4.9%, depending on the destination. Be aware that the transfer is instant, but it can take up to nine days for the cash to be available in the recipient's bank.
Cheaper still could be peer-to-peer money transfer system Transferwise, which allows you to send anything from £1 upwards, and the fee is just £1 on sums up to £200, and only 0.5% above that. The cash usually arrives abroad within three days.
The right option if a loved one needs emergency funds while on holiday, instant transfers aren't always the cheapest option but the cash can be picked up from an agent's branch without having to worry about waiting for money to clear.
Major operators Moneygram and Western Union typically charge the sender a fee, but not the recipient. You can do it either online or in a branch, and fees start from around £2.50, depending on the location, but these charges vary greatly and often work out more expensive if you are only sending small sums of money.
Do you regularly send money abroad? What service do you use? Leave your comments below...