Dark, dismal days, rail chaos, lingering Christmas hangover - yes, it's January again. As we struggle to keep warm and dream of daylight, one of the few distractions from midwinter depression is planning a holiday, preferably to warmer climes.

But while most of us will take time to find the best flight and accommodation deals, few will apply the same care to how and where they acquire their holiday spending money.

Most tourists order travel money from a branch of their own bank and use their credit card when abroad. However, Guardian Money found that many people are paying much more than they think for holiday money and, by shopping around for the best credit card and foreign currency deals, holidaymakers spending £1,000 abroad could save up to £25.

Most banks will gladly advise travellers to finance their holiday spending from more than one source - usually a combination of travellers' cheques, some foreign currency and credit cards for both purchases and withdrawing cash. They are less forthcoming about the commission and other charges levied on this.

The majority of credit card issuers impose a foreign usage loading of around 2.75% for using the card abroad, and charge 1.5% to 2% for withdrawing cash overseas. In addition, some levy interest immediately on the amount withdrawn. Most banks will also charge between 1% and 2% commission for issuing foreign currency, with a minimum charge of anything between £1.50 and £3.

Travellers' cheques, recommended as the safest form of holiday money, are generally even more expensive - you pay a fee on issue and you may pay again in the exchange rate when you convert.

And, while our fellow citizens in the eurozone can now move within the 12 countries using the same currency, the advent of the euro has made little or no difference to currency transaction costs for Britons travelling to the eurozone.

According to Stuart Cliffe, of the National Association of Bank and Insurance Customers, most major banks are happily treating the euro as a foreign currency and levying the same transaction charges, despite the substantial saving they are now enjoying from not having to administer the various different exchange rates. Mr Cliffe believes there is now little justification for this, as he says all major banks have computer systems fully capable of handling euro transactions as easily and economically as pounds and pennies.

So just how can potential holidaymakers reduce the amount they pay for holiday money? Kate Coney of Liverpool Victoria, one of the few issuers whose credit card has no foreign usage loading, advises customers to think carefully about what they want and need from their credit card.

"Low annual percentage rates (APRs) alone are not appropriate for all consumers; for many a more flexible provider could prove more suitable," she says.

"Customers need to realise there can be many charges, other than the APR, levied on to their credit card."

Travellers should always check out their own bank's commission and transaction charges, as some have preferential rates for existing customers. Nationwide does not charge commission and has no currency loading on travel money for account holders. There is no foreign usage loading on their Visa card and no commission charges for withdrawing cash overseas with a debit card.

For other prospective holidaymakers, a trip to the local Post Office could prove cost-effective. Since June 2001, some 30 major foreign currencies have been available, commission free, from all 18,000 Post Office branches nationwide, as well as over the phone and online. American Express travellers' cheques (excluding sterling) can also be purchased commission free.

As with any other financial service, it always pays to shop around when arranging travel money - and you may even dispel some of those January blues deciding what to buy with the savings you have made.

Tips on travel money:

· Always take time to compare rates and charges from more than one provider.

· Make sure you always check out exchange rates: savings on commission charges can be wiped out by a poor exchange rate from the same provider.

· If you plan to use your credit card abroad, you could well be better off choosing a card with no foreign usage loading, compared to one with a low APR or balance transfer rate.