I’m heading to the US for Christmas. What’s the best way of spending: credit, debit or prepaid card?

Credit cards are widely used in the US, and you’ll find plenty of vendors that accept Visa, Mastercard and American Express. But expect to be hit by foreign transaction fees of up to 3%, exchange rate mark-ups, as well as cash withdrawal charges for the privilege. More travel-friendly options do exist — Barclaycard Rewards and Santander All in One credit cards, for instance, don’t charge transaction or withdrawal fees when used abroad. It’s worth remembering that the benefit of using a credit card overseas is the protection they provide against fraud, theft, or if the vendor fails to deliver or goes bust, plus insurance on travel delays and lost luggage.

Much of the same applies when using debit cards in the US — watch out for fees on foreign transactions or when withdrawing cash. One of the main risks is that if your debit card is stolen, it’s the amount in your account that’s at stake rather than just the credit limit.

Prepaid cards such as Revolut or Wise are probably the best option for overseas spending because they don’t usually charge fees for foreign exchange or cash withdrawals and often offer competitive exchange rates. Revolut’s card is free and uses the interbank (the most competitive) exchange rate if you change money between Monday to Friday. You’ll only be charged a fee if you withdraw more than £200 per month. Wise’s card, however, uses the interbank exchange rate, plus a 0.35% fee every day of the week, and allows two fee-free cash withdrawals of up to £200 each month.