We wanted to give you a quick roundup of the best banks for avoiding fees when using your card abroad. We’re not talking about car hire here, just for when you’re out and about on your holiday and want to pay for something or withdraw cash with your UK based bank.
Quick disclaimer: everything we say here is just our little roundup of what’s out there, we’re not giving you financial advice. We’re not sponsored, and we’ve not been paid by any of the companies talked about here. We’re also only talking about debit cards for normal bank accounts, we’re not talking about credit cards. We’re only going to talk about the best banks in each category and we’re only going to talk about free to use accounts. So, this excludes all paid for current accounts, many of which come with added perks like no foreign fees. These are bank accounts you can sign up for which are free to get and to use.
The big issue is that some bank accounts or building societies charge a fee for using your card when out of the UK. These fees when charged can range from flat rates of just 50p, to up to nearly 3% of the value of the transaction – and not all them have limits! There can also be fees to withdrawing your money at a foreign ATM. These fees can vary when in and outside of Europe too. Either way, let’s talk about how to avoid them altogether.
Paying directly with your card when abroad
Some banks charge fees or anywhere from 50p to 3% of the total for using your card to make a purchase directly abroad, regardless of whether you’re Europe or not or whether you use contactless, swipe, or chip and pin.
To get away from these fees for using your own money out of the UK, there are a few banks that can help. Top of this list is a UK based online bank called Starling. With Starling, there are no fees whatsoever for paying with your card when abroad. This includes anywhere outside of Europe. Starling also allows you to withdraw as much money from foreign cash machines as you like without any charges. This is a huge benefit not shared by many other banks so if you feel like you’ll be needing cash when abroad, Starling is a great bet if you can’t convert at a good rate before you leave.
The closest followers behind Starling is another UK online bank called Monzo. They have no fees for paying with your card but do start to charge after you withdraw over £200 when abroad. You’re charged 3% after this but the £200 balance refreshes monthly.
The worst banks out there for fees are some popular high street bank names like Barclays, HSBC and NatWest. All three of which charge you 2.75% on purchases.
Withdrawing cash abroad
Sometimes when you’re travelling, you’ll find that unlike in the UK, the ability to pay by card at any given shop or place isn’t as common, meaning you’ll need to have some cash on you. Unfortunately, quite a few UK banks charge for using your card at a cash machine to get local cash out. These fees tend to change whether you’re in or out of Europe.
Starling and M&S Bank are the two winners here, charging you nothing to withdraw money when out of the country. Metro Bank and Monzo come in close second with Metro charging nothing in Europe but £1.50 a time out of Europe. Monzo only charge 3% on withdrawals once you’re over £200 in a month.
Again, it’s the high street big names which come up short here. First Direct, HSBC, NatWest, Co-Operative and RBS charging 2% with a minimum charge of £1.50 or higher. Only HSBC caps this limit to £5 so beware if you need to withdraw a big amount from any of the other big banks!
Bank of Scotland, Halifax, Lloyds Bank and Santander charge a simple flat rate of £1.50 per withdrawal which is a bit better.
Our advice? Unless you’re with Starling, M&S or Monzo or Metro, then we’d try to avoid getting cash out abroad unless you seriously must.
Losing your card abroad
Finding out you’ve lost your card while out the country can be a seriously scary experience, it’s very easy to panic in these situations. Luckily, most banks make it easy or at least not stressful to make sure your money is safe and that you have access to funds to see you through.
It does depend from bank to bank, but your first step should always be getting in touch with your bank. If you use an App to bank, most modern banks allow you to notify them of a lost card or even freeze your card through the app instantly. This is great for your peace of mind. If you don’t use app or online banking calling your bank to notify them is the second-best thing.
In terms of getting a replacement card as quickly as possible again depends on your bank. Some banks like Revolut offer a 3-day card replacement service but this varies massively depending on where you are and who you bank with.
Lastly, watch out for purchase exchange rates
Whether you’re withdrawing cash abroad or paying directly by card, make sure you know what exchange rate you’ll be getting. Getting money out at a foreign ATM normally nets you exchange rates much higher than normal. Cash machines will normally say what their exchange rate is but they might call it a fee or conversion charge. These aren’t being charged by your bank but by the cash machine provider so try a few different cash machines to see where the cheapest rate is. If you can buy the currency before you leave in the UK, you can normally shop around for a much better rate.
If you’re paying directly by card, most modern banks won’t mark-up on the conversion rate. Instead, they might just charge you the purchase fees we talked about above. Still, it’s best to double-check with your bank how they work for this. Online banks like Monzo and Starlin simply convert the currency at the current Mastercard rate which is normally the best you’ll be able to do.
In conclusion, all you really need to do…
Check out your banks rules and charges when it comes to using your bank abroad. If your bank happens to charge, try to find ways to mitigate doing what they charge for. For instance, if they charge a hefty sum for withdrawing cash abroad, can you make sure you’ve got enough cash at a good rate before you leave?
It’s always good practice too, to make sure you’ve got any emergency contact numbers saved in your phone, just in case you lose your card or something else happens!
