We belong to that generation whose first real experience of foreign travel was conducted under the auspices of Her Majesty's Government, when European towns were teeming with black marketeers trying to prove to every young serviceman that 200 British cigarettes were really worth 200 or even 300 Deutschmarks. Travellers' cheques and banks hardly existed and credit cards, like ballpoint pens, had not yet been invented. Our trust in ready cash as the essential ingredient for trouble-free travelling is no doubt due to this early conditioning. Cash is, of course, intrinsically less safe to carry than travellers' cheques, especially when these are fully refundable when lost (this is not always the case, particularly if a 'finder' has cashed them in before the loss has been reported).

Nowadays, we carry all three: travellers' cheques, credit cards and cash. However, our book of travellers' cheques is a slim one, which we hold in reserve in case we do run out of cash - and for use in countries with restricted currencies (which basically means you can't obtain their cash outside their borders - Tanzania and Cuba are examples).

Credit cards can be a very useful way of getting hold of money, especially if you are on an extended trip and don't feel like carrying several months' worth of cash with you at all times. Try not to use them to get hold of cash, however, as most card providers charge higher rates of interest for cash withdrawals than they do for direct payment for goods and services. And remember that, if you are travelling for more than a month, it's vital to set up some kind of direct debit system back home to make sure that your credit card bill is paid off.

A new service which combines the advantages of credit cards and travellers' cheques is the Visa Travel Money card. This is a 'smart' card which can be 'loaded' with a finite amount of money and used to withdraw that amount in local currency at Visa cash machines abroad. When all the money has been withdrawn, you throw away the card. For security you have a PIN number, making this a safe and convenient system. Currently it is only offered by some banks in the UK (RBS, Alliance and Leicester, Bank of Scotland).

When it comes to both credit cards and travellers' cheques, it is worth taking photocopies of all you might need to recoup your losses should the worst happen. In the case of credit cards, this means photocopying the front so that the serial number is clearly visible; with travellers' cheques, this will be the list of serial numbers and the receipt from the bank or bureau de change where you purchased them. Also make a note of the emergency-line phone numbers all financial organisations provide. These tend to operate on a 24-hour basis and it is an intense relief, if your wallet does get stolen, to be able to cancel the old card and get another one issued and on its way to you with a simple ten-minute phone call.

Small change

There are a number of cogent reasons for equipping yourself with the currency of the country you are about to visit before you get there:

1. Even on the plane you may find you can make agreeable savings by paying in some currency other than sterling.

2. Immediately on arrival it may be difficult to change your money and you may be doubtful as to whether you are being offered a good rate of exchange.

3. The immediate problem of tipping a porter, making a phone call and paying for a taxi or airport bus must be solved long before reaching your hotel. And when you do eventually get there, this does not necessarily get rid of your problem as not all hotels exchange travellers' cheques for cash (and, even if they do so, the facility is not necessarily offered at any time of day or night) and if they do, the vexed question of the rate of exchange arises once more.

Many countries do not allow unrestricted import or export of their currency - and in a number of countries for 'unrestricted' read 'nil'- so one has to exchange travellers' cheques or hard cash on arrival (there is usually a small exchange rate advantage in favour of the cheques). In addition, if you plan to visit several countries, it is usually best not to keep bank notes of a currency no longer required on that journey (although we do hold on to small change and some low-denomination notes if there is a likelihood of another visit).

Remember that every exchange results in a loss, but the sums involved are usually not large. It is certainly not worth spending a morning traipsing from one bank and bureau de change to another in the hope that you will find a rate that is significantly better than the first one you tried. Check out, at most, two or three banks, and then make a decision on that basis. You'll find that any difference in the exchange tariffs is usually minimal - and is often balanced by the rates of commission charged by each organisation.

Finally, remember to keep a record of all financial transactions, particularly in sensitive countries, as you may well be asked to account for every note before you are allowed to leave.

Nest eggs

If you are planning to be away for a long time, and possibly travel through many countries, there is one other way to ensure that you don't have to carry too much with you and risk losing it all in some remote village. Before you leave home, set up a number of accounts along the way through banks affiliated to your own and arrange for money to be wired over to you at regular intervals. Ask the foreign section of your bank to advise you on the best way of doing this.

While this is a simple-sounding operation, as with most aspects of travel, the reality is infinitely more complex, each transaction taking weeks longer than claimed and your money being misplaced en route or misfiled on arrival. The bureaucracy alone could make the whole exercise too difficult to be worthwhile, never mind the fact that you are having to place an immense amount of trust in bank staff who may be corrupt. It is probably not worthwhile unless you are planning to spend some considerable time in any one country. Whatever you decide to do, don't rely on having money waiting for you - keep an emergency fund for survival while you are trying to wring your money out of the bank.

Even if you haven't set up accounts along the way, ask your bank for a list of affiliated banks in the countries you will be visiting. In an emergency, you can ask for money to be wired out from home to any bank, but if you can choose one that is already in contact with yours, it should make life considerably easier. Always ask for a separate letter, telex or fax confirming that the money has been sent and specify that it should be sent to SWIFT (express).

Be careful not to wire more money than you will need into countries with tight export restrictions. No one will mind the sterling coming in, but they may well object to it leaving again, and if you are not careful you could find yourself with a nest egg gathering dust in a country you are never likely to visit again.