Expert issues warning about one thing you should never do on holiday

An expert has revealed the one common holiday mistake which could end up seriously costing you.

With many of us about to jet off for our summer holiday, we're being bombarded with travel warnings such as why you shouldn't put baggage tags on your suitcase, and the airport mistake that can cost you up to £200.

Well, get ready for another one, and this time it's to do with how you pay for that round of cocktails, the delicious tapas or to pick up a souvenir.

Paying abroad could cost you more if you make this mistake. (ArtistGNDphotography/Getty Images)

If you're paying for things on holiday by card, you'll then have to answer that question of whether you should pay in your own currency (GBP) or use the currency of where you're staying.

What you might not realise is that choosing one while travelling could cost you a lot more than the other.

Let's allow money saving expert Martin Lewis to explain.

He said in one of his recent newsletters last month: "These days, buy most things abroad and the store will pressure you to pay in pounds (as will overseas ATMs), but is it the right thing to do?

Martin Lewis has come to the rescue ( David M. Benett/Alan Chapman/Dave Benett/Getty Images)

"In short, the answer's NO. The main reason is if you say yes, the overseas bank does the conversion and the rates are poor.

"Yet say pay in 'local currency', and it's your card doing the conversion. And especially if you've a specialist card, that means the rate is near-perfect."

According to Money.co.uk, paying in a different currency to where you are holidaying could see you hit with fees costing you more.

The website writes: "It’s always better to pay in the local currency when you’re on holiday.

"If a retailer offers to convert your card transaction into pound sterling, politely decline and continue with the transaction in the local currency. So if you’re in France, pay in euros, if you’re in the United States, pay in US dollars."

They explain the reason why you should avoid paying in your home currency is because you're 'at the mercy of the retailer’s exchange rate, which is likely to be far less favourable than your card provider’s'.

This applies to ATMs as well, which might also give you the option of using your home currency, in which case you should decline.

You could be hit with fees of around three per cent from your card provider if you don't pay in local currency. (praetorianphoto/Getty Images)

The newsletter continued: "If you get a specialist overseas card, then there is no doubt that using it and paying in euros is always correct.

"Yet even without one of these, if you're using your plastic abroad, while there's a very minor gain with one bank for paying in pounds – it's negligible. Whereas get it wrong, and you can lose out a lot.

"So for safety and simplicity's sake, the golden rule is if using a card and you’re asked whether you want to pay in pounds or pay in local currency (eg, Euros) ALWAYS say the local currency (the same almost certainly applies US dollars when in the States or other currencies elsewhere too)."