Holiday makers preparing finances for their trip should consider a prepay travel card as a cost effective option compared with more traditional methods such as travellers cheques or using a credit card, claims one financial adviser.

The Post Office is the latest company to introduce the new flexible card, following in the footsteps of American Express, Western Union and Travelex.

Travellers can use the card, which is issued with a PIN, to make purchases and ATM withdrawals while overseas and as with travellers cheques, it is protected and replaced if lost or stolen.

Consumers opting for the Post Office prepay card will have to pay £10 upfront and then 1.5 per cent on sterling loaded on the card although euros and dollars are commission free.

Replacement card will cost £35 and those who choose to cancel the card will pay £5 for the privilege or the balance if lower.

"As with most foreign money transactions it is a difficult to compare options, with varying fees and rates," said Rachel Thrussel from Moneyfact.

"However, as this market continues to grow, undoubtedly these products will become increasingly competitive and a common feature in any traveller's bag. More choice and better priced products can only be good news for the consumer!"