A HIGH street bank will charge customers later this summer for using their debit cards abroad.
From August 29, Metro Bank will introduce a 2.99% fee on all debit card transactions outside the UK, including in Europe. This compensation is currently free, The Sun reports.
Customers who withdraw money from their bank account abroad will pay a surcharge of 2.99% plus an additional ATM surcharge of £1.50.
Metro Bank, which has around 3 million customers, currently offers customers the opportunity to withdraw money in foreign currencies and pay with their debit card in Europe free of charge.
But last week, the company sent an email to its customers letting them know that fees would be charged for overseas transactions starting in August.
The email, which was sent on June 27, said: ‘After 29 August 2024, foreign currency debit card payments outside the UK will be charged 2.99% of the converted value of the transaction in GBP brought.
“After 29 August 2024, foreign currency cash withdrawals made using your debit card outside the UK will be charged 2.99% on the converted value of the British pound plus £1.50 at ATMs.
“These fees apply to every transaction you make.”
While a 2.99% fee may not seem like much, the fees can add up quickly because the fee is applied to each individual transaction.
For example, if you spend £20 with your card you will pay 60p in fees.
So if you make five £20 transactions, you will pay an extra £3 in fees.
And if you withdraw money from an ATM, the costs are even higher.
If you withdraw £100 worth of foreign currency, you will be charged a £2.99 fee, plus an additional withdrawal fee of £1.50.
This means that you pay €4.49 extra for taking out €100.
One customer who noticed the change said: “It’s very disappointing to hear that Metro Bank is charging the fee. I’ve had this account for over 10 years, explicitly for use in Europe.
“On a few occasions, large amounts of money have been deposited into the account, but unfortunately, it was cancelled on 29 August. I now have to look for another free debit card.”
A Metro Bank spokesperson confirmed the change, adding: “Over time, we have seen our customers’ needs and expectations evolve and demand for this service has declined in recent years.”
What are the costs of other banks?
Most banks offer customers the opportunity to withdraw money abroad without having to pay any fees.
Some only allow free transactions in Europe, while others currently do not charge fees anywhere in the world.
First direct
First Direct does not charge fees for paying with a debit card in a foreign currency or for withdrawing money abroad.
There is a daily withdrawal limit of £500 (or foreign currency equivalent) from ATMs.
HSBC
Customers with an HSBC Global Money Account can spend money abroad and withdraw money from ATMs without fees.
Global Money accounts are available to all HSBC customers with an active current account and the associated banking app.
Other customers will be charged 2.75% for shopping, and 2.75%, plus a 2% surcharge for cash.
Lloyd’s Bank
Customers with a Lloyd’s Silver or Platinum account can use their debit card for free anywhere in the world from 1 July 2024.
However, the Silver Packaged Bank Accounts cost £10.00 per month, while the Platinum option costs £21.00 per month.
Monzo bank
Monzo says customers can pay with their card anywhere and in any currency, with no foreign transaction fees.
And if Monzo is your main bank account, you can make unlimited, free withdrawals in the European Economic Area (EEA), and up to £200 every 30 days elsewhere. After that, the bank charges 3%.
Saint Nicholas
If you have the Santander Edge, Santander Edge Up and Private Account debit cards, you can withdraw money without fees and pay no foreign transaction fees when you spend money abroad.
For all other accounts at Santander, a rate of 2.95% applies to both purchases and withdrawals.
Starling bench
Starling does not charge any fees for using your debit card abroad.
TSB bank
If you have a TSB Spend and Save Plus account, you will not pay any fees for debit card transactions worldwide.
Other account holders pay 2.99% in fees for transactions and 1.5% for all money withdrawn.
There are no fees associated with withdrawing cash Euros from an ATM in an EEA country.
Virgin Money and Clysedale Bank
If you have a Virgin Money M Plus account, you won’t be charged a fee for using your debit card abroad, although the bank has warned that some ATMs may still charge fees.
You can read our full guide to other banks that don’t charge fees for foreign transactions here.
If you want to exchange cash for a foreign currency, make sure you buy the correct currency beforehand.
You should avoid using the airport exchange offices as they have some of the worst exchange rates on the market.
Alternatives to holiday spending if you don’t want to exchange money
THERE ARE several special cards that can offer you a great exchange rate.
Travel credit cards allow you to spend money abroad without incurring additional fees or hidden charges.
But they may still charge fees for withdrawing funds.
We recommend Halifax’s Clarity Card as there are no fees for using it abroad, nor are there any fees for withdrawing cash.
But if you don’t pay off your balance in full, you will be charged interest at a rate of 19.9 percent.
Interest is also charged on cash withdrawals until your balance is paid off. This interest rate ranges from 19.9 to 27.95 percent, depending on your credit score.
To learn more about travel credit cards, read our guide here.
Prepaid cards: An alternative to carrying cash is to purchase a prepaid card.
These cards allow you to put a fixed amount of cash on the card at a fixed exchange rate.
So if the rate is good at the moment, you can put money on your card and the rate will remain the same even when you are on holiday.
Please note that these cards may sometimes have hidden fees and charges. Therefore, always read the small print.
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