STEPHEN LEWIS checks out how to get a good deal on foreign currency if you're jetting abroad

EVEN if you're not heading out to the Far East next week to watch England's World Cup heroes in action, chances are you'll be planning a holiday abroad somewhere this summer.

If you are, you'll face the same old dilemma you do every time you jet off overseas: should you take travellers' cheques or foreign currency - and where can you get the best deal when it comes to buying them?

Current best advice from Moneyfacts, the personal finance data analysts, is that it is best to take the bulk of your holiday money in travellers' cheques, with just a small amount of cash in the form of foreign currency.

That way, says Moneyfacts's savings research editor, Rachel Thrussell, your holiday won't turn into a nightmare if your money is stolen.

"If you take £500 in cash with you and it gets stolen, there is not a lot you can do," she says. "But most travellers cheques, as long as they were signed when you purchased them and you kept a record, will be refunded within 24 hours."

It is also a good idea to take a credit card as back-up, Rachel advises - it will be accepted at major banks in most countries.

When it comes to buying your travellers' cheques or foreign currency, like with most things it pays to shop around.

A survey commissioned by Marks & Spencer Financial Services revealed what you pay may depend partly on where you live. Some leading travel agents, the survey revealed, were charging customers more for their foreign currency in some parts of the country than others, with differences both in the exchange rate offered and the amount of commission charged.

The cost of buying US$500 from Thomas Cook, for example, varied from £362.71 in Edinburgh, to £357.61 in Manchester, and only £354.61 in Cardiff, on the day the survey was conducted. That was because in Edinburgh, holidaymakers got both a comparatively-poor exchange rate (US$1.39 to the pound) compared with the rate offered by the same company at other locations, and were also expected to pay a £3 commission. In Manchester, Thomas Cook offered a better exchange rate (US$1.41 to the pound) but still levied a £3 commission charge, while in Cardiff, holidaymakers were being offered both the better exchange rate and no commission.

Thomas Cook is not alone in charging its customers variable rates for foreign cash depending where they live. Travelex, according to the Marks & Spencer survey, charged more in Bristol than in London for U.S. dollars and euros, while International Currency Exchange (ICE) was charging customers in Ashford more for their U.S. dollars than customers in Edinburgh.

Andrew Lindsay, of Marks & Spencer Financial services - which does not charge commission on foreign currency transactions - says people don't have to put up with such practices.

"It is assumed that there is little disparity in price or practice in the travel money market, but, as this study shows, clearly there is a difference and it is well worth shopping around," he says.

So how do you make sure you get a good deal? According to Moneyfacts, there are a number of other organisations, as well as Marks & Spencer, which don't charge commission for foreign currency or travellers cheques. They include Darlington Building Society, Leeds and Holbeck Building Society, the Halifax (one per cent commission on sterling travellers cheques only), the Nationwide, the Post Office (1.5 per cent commission on sterling travellers cheques) and Tesco.

Updated: 09:31 Thursday, May 23, 2002