Martin Lewis' MoneySavingExpert reveals the 4 biggest holiday mistakes which are costing you money | The Sun

HIDDEN costs can cause unwanted stress and worry while on holiday.

Whether at a cash machine, or in hidden transaction fees, an unexpected hit to the travel fund is never a nice thing to have to pay, no matter how much.

However, there are ways of avoiding unwanted costs, which have been revealed by MoneySavingExpert, Martin Lewis.

In a recent post on his website, Lewis revealed four of the biggest mistakes Brits make when they go abroad and how they could be costing them money.

He then explains how best to avoid those errors, in order to prevent as much unnecessary spending as possible.

1. Always pay in local currency

First on Lewis' list of hidden costs to avoid are those that come when asked if you would prefer to pay in pounds, instead of the currency of the country you're visiting.

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This option will sometimes be offered to visitors who are paying for items with their card, or when withdrawing from a cash machine.

Lewis advises to always pay in local currency, for a very simple reason.

If you pay in the local currency, it is your home bank or credit card company that calculates the conversion rate.

However, if you pay in pounds, it is the foreign bank that does the currency conversion.

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Lewis explains that the home bank's rate will either be the Visa or Mastercard exchange rate, which is an almost "perfect rate" whereas the conversion fee will often be far higher if it is charged by the foreign bank.

2. Beware fees from cash machines

While card fees will apply when withdrawing money, some ATMs have now started adding their own fees too, which can make withdrawing cash quite expensive.

However, not all cash machines will charge the same fee and Lewis advises trying several machines in order to find the cheapest one available.

The range in fees can be pretty staggering, with some charging as little as €2 and others as much as €7, so it's worth assessing your options.

3. Don't buy travel money with a credit card

Lewis explains that most credit card companies consider withdrawing money as a cash transaction, so will charge both fees and interest on top.

He recommends using a debit card for buying cash and for loading a pre-paid travel card too.

4. Withdrawing cash abroad on a credit card could harm your credit rating

While it can sometimes be cheaper to withdraw cash with a credit card when abroad, Lewis recommends not doing it.

He reveals that other lenders are "likely see it as a danger sign" and that they would "probably assume that you're having to make the cash withdrawal because you have no money left in your bank".

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This holidaymaker revealed how to avoid unwanted costs when using cash machines abroad.

Here's how to dodge fees when sending cash abroad.

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