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The Post Office will stop charging commission on foreign curr- ency from 18 July. This is great news for those heading abroad since research shows that commission cost UK holiday makers pounds 190m last year. But for tourists not wanting to take wads of cash away with them, another option is to use a debit card to withdraw cash from an ATM at their destination.

It is often assumed you get a bad deal when withdrawing money from a cashpoint abroad. However, a debit card can be the best option, even though charges vary depending on which card you have.

The fact that Visa and Mastercard bulk-buy foreign currency means you'll get a better exchange rate if you withdraw money from an ATM rather than at a bureau de change or high-street bank. But you will probably incur charges, offsetting some of the benefits.

These charges are split into a cash-handling fee and the commission (also known as the loading fee), which includes the Visa or Mastercard processing fee plus the exchange rate calculations. You may also face a surcharge from the bank whose ATM you use.

Nationwide customers currently get the best deal as they aren't charged anything for taking out money. Barclays customers can also benefit from lower charges in certain countries. The bank has recently announced an ATM alliance with four other international companies: Bank of America, Deutsche Bank, Scotiabank in Canada and Westpac in Australia.

From 1 July customers can withdraw money from any of these banks' cashpoints without incurring a handling fee or a surcharge. The one cost will be the 2.75 per cent commission. As it's only available via four banks, this scheme is limited, although Barclays plans to expand the network.

Until then, customers taking cash out from other ATMs will be charged a handling fee of 1.5 per cent or pounds 1.50 (whichever is greater) on top of the commission.

The other three big high- street banks - HSBC, NatWest and Lloyds TSB - have no plans as yet to develop similar international networks. All three have a handling fee of 1.5 per cent and a loading charge of 2.25 per cent.

Using a debit card to get access to cash when you're abroad is worth while, but it is not advisable to withdraw money using a credit card. The charges are higher and there is no interest-free period with cash withdrawals, so you will start accruing interest immediately.

It is therefore better to keep your credit card for shopping purchases and restaurant bills, and get your cash with a debit card.

# posted by Medical Information : 4:49 AM