What's cheapest abroad: prepaid, debit or credit card?

I'm going to be going abroad for the summer, what is the cheapest way to spend money and access cash abroad, a prepaid, debit or credit card?

While specialist credit cards for foreign use are often the cheapest way to spend abroad, there are situations when credit cards may not always be suitable.

When the top deals for travel can't be accessed, other credit cards can prove much more expensive than alternative options such as prepaid cards.

Additionally, there may be times such as when parents are helping to fund their child's gap year when opening up lines of credit may not be the best option.

The principle behind and general limits of a prepaid card can therefore provide an alternative solution for safer spending abroad and also a way for parents to provide emergency funding for exploratory teens.

Prepaid cards abroad

As their name suggests, prepaid cards are 'loaded' with money prior to spending, making them a good option for those wanting to cap their spending at any one time.

If a prepaid card is lost, most providers will replace the card for a fee of about £10 with all the card's funds intact.

Additionally, prepaid cards have the added benefit of not being tied to your credit file or your current account, which is safer in terms of preventing ID theft as well as limiting fraudulent transactions.

They're also less likely to incur excessive surcharges.

One leading prepaid card for use abroad is the FairFx .

Currently, the Euro card doesn't charge fees for spending in Europe or for loading with foreign currency. The card can be topped up for free by bank transfer or debit card, though there is a charge of 1.50 Euros for cash withdrawals.

FairFx also offers a Dollar card and an 'anywhere' card but the charges differ.

The CaxtonFx card currently does not charge a fee for cash withdrawals outside the UK but it does have a slightly poorer exchange rate than the FairFx.

Similarly, CaxtonFx offer a Euro, Dollar and a Global card version, each with slightly different fees.

The Travelex Cash Passport prepaid card is another alternative choice and offers a similar exchange rate to the above two cards.

Travelex offer more specific currency cards, which offer cheaper use for defined places (currencies) of travel, as well as a global version.

Note these deals and the exchange rates are likely to vary, so it's always a good idea to look at the details before choosing a particular card, as well as whether there are other options available.

Credit cards abroad

While credit cards cannot be preloaded, it's still possible to avoid interest charges on purchases by paying off the full balance at the end of every month.

Although most credit cards add a 3% charge to the normal exchange rates, a few refrain from charging a loading fee and, therefore, offer exchange rates that are better than the best bureau.

The Post Office credit card* and Sainsbury's Bank Gold credit card* are two options that offer 0% foreign transaction fees on purchases.

* Click through for the full cost of credit details.

A quick look at the Post Office's small print puts it ahead: there's no annual fee to pay compared to the Sainsbury's Bank Gold card's £5 monthly fee.

Unlike the Post Office card, however, with the Sainsbury's Gold cash advances are included in the interest free period, so cardholders can clear the balance in full and really enjoy fee-free use abroad.

In addition, the Sainsbury's card bundles in an annual travel insurance policy.

See our guide to using credit cards abroad for more information on these deals.

Debit cards abroad

Another option to consider is using the debit card of a current account.

While using debit cards sidesteps any interest issues (except of course borrowing on an overdraft) the problem however with debit cards, is that most of them have the very worst fees for spending abroad.

For example, one leading bank's debit card charges £1.50 for each transaction abroad, plus a loading fee amounting to 2.75% and an additional cash withdrawal fee of £1.50.

So as always, check the small print of any debit or credit card before packing it for use abroad.