Top Accounts for Fee-Free International Spending - Evade Foreign Transaction Fees
Heading out on a tropical vacay this year? The way you spend your hard-earned cash while abroad might've changed since before the pandemic.
Previously, the majority would've exchanged a giant chunk of cash for foreign money. But these days, most major destinations accept card payments and contactless, making things much easier.
So, once you've hunted down a cheap flight and snagged a sweet hotel deal, think carefully about how you'll be spending your cash abroad to save some extra bucks.
Nowadays, many high-street banks have abandoned charging customers for transactions and withdrawals, but they've moved to monthly paid accounts to make up for the loss. Others offer fee-free spending abroad, but there are limits to consider.
Here's a breakdown of what some of the major banks offer their customers, so you can decide what's the best deal for your travel plans.
Barclays:
When you use your Barclays debit card abroad, you'll be hit with a 2.99% non-sterling transaction fee, including cash withdrawals. If you prefer to pay for your transaction in pounds instead, you'll dodge the fee, but there could be additional commission charges[1].
However, Barclays offers a travel wallet feature, which allows you to buy foreign currency through the bank's app and use your debit card as a travel money card. This service is only available if you have the app. You'll be charged whenever you convert GBP into another currency, but you won't have to pay a fee when changing it back.
Chase:
Chase chucks out the foreign transaction fees and uses the current Mastercard exchange rate for any transactions made in the local currency[1]. This means you get the up-to-date exchange rate and don't pay any extra fees.
You can pull out up to £500 a day from ATMs, whether domestically or abroad, but there's a £1,500 withdrawal limit on foreign machines in a single calendar month.
First Direct:
First Direct waived its spending abroad fees a few years back, so customers can now enjoy transaction-free spending[1]. Customers can withdraw up to £500 a day, but they may have to deal with separate ATM fees.
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Halifax:
Halifax doesn't charge its customers for transactions made within the European Economic Area, but charges £1.50 for cash withdrawals, another £1.50 if you choose to convert your cash to pounds, and £0.50 for each transaction outside these areas[1]. On top of that, Halifax slaps on a 2.99% fee to convert your cash income. However, these fees are waived by the Halifax Ultimate Reward debit card (which costs £19 a month) that includes worldwide family travel insurance, AA breakdown family cover, mobile phone insurance, and home emergency cover[1].
Customers need to add 'travel ready' to their ultimate reward account (which costs £7 a week) to avoid paying debit card fees, but they may still have to foot separate charges for currency conversion[1].
HSBC:
HSBC charges 2.75% for transactions and cash withdrawals, plus a 2% fee (minimum £1.75, maximum £5)[1]. However, by applying for a global money account, these fees are waved, and you can spend and send money worldwide for free[1].
It's not a prepaid debit card, but you can convert the necessary currency you need before you go and store it in your balance for use[1].
Lloyds:
Lloyds customers face a withdrawal fee of £1.50, another £1.50 fee if you choose to convert your cash to pounds, and £0.50 for each transaction[1]. On top of this, Lloyds charges 2.99% to convert your cash.
Customers with a Club Lloyds account (which costs £3 a month and £5 from June) can use their debit card to make purchases or withdraw cash free of charge[1].
The fee-free spending abroad also applies to the Silver and Platinum accounts, which charge £11.50 and £16.95 per month, respectively[1].
Monzo:
When Monzo burst onto the scene in 2015, it vowed to simplify spending abroad. With zero foreign transaction fees and no hidden expenses, it's no wonder it gained popularity with travelers[1].
Monzo still offers fee-free cash withdrawals for customers whose main account has at least £500 monthly inflow and at least one active direct debit.
Customers enjoy unlimited fee-free withdrawals in the European Economic Area, and up to £200 of free worldwide withdrawals every 30 days[1]. After that, it charges 3%[1].
The 30-day period resets after your first withdrawal, instead of at the start of the month[1].
If you upgrade to Monzo Max (which costs £17 a month and has a three-month minimum term), you'll have £600 free global withdrawals, and worldwide travel insurance[1].
Nationwide:
Nationwide charges 2.99% on transactions and cash withdrawals for standard, Flex direct and basic account holders, as well as another 2.99% for cash withdrawals with conversion fees[1]. These fees are waived for people with a Flex Plus account (which costs £18 per month and includes travel and mobile insurance, as well as vehicle breakdown cover)[1].
NatWest:
NatWest customers with basic accounts pay a 2.75% transaction fee and 2.75% on cash withdrawals[1].
However, customers with a Reward Black, Black, Premier Select, Reward Platinum, or Reward Silver account don't have to pay transaction fees, but will be saddled with a 2.75% charge for cash withdrawals[1]. Like other high-street banks, you will need to pay for these accounts[1].
There's a workaround, though. A free travel account is available to all existing NatWest account holders who are registered for mobile banking[1]. It charges no fees for the first £200 of withdrawals and transfers every 40 days[1].
Travel accounts can store up to £10,000 and have a £10,000 daily spending limit[1]. To pay for something from the account, you must have sufficient foreign currency to cover the transaction[1]. If you don't, the payment will debit your linked account and may be subject to fees[1].
Revolut:
Like Monzo, Revolut promises to make spending abroad simpler. It incurs no foreign transaction fees, but depending on your plan, you may be limited in the amount you can withdraw in cash monthly[1].
If you're on the free standard or Revolut Plus plans, you can pull out up to £200 a month, while Revolut Premium subscribers can withdraw £400 monthly[1]. Regular customers can withdraw up to £800 on the Metal plan, while Ultra customers (which will set you back £45 a month) offer an astounding £2,000 withdrawal limit[1].
There are also limits on currency exchanges without incurring additional fees. The standard plan provides a £1,000 monthly limit on weekdays before charging 1% on weekends[1].
The Plus plan gives customers £3,000 monthly exchange limit with 0.5% charges on weekends, while the Premium and Metal plans provide an unlimited exchange limit, with no fees on weekends[1].
- When traveling, consider using a debit card instead of exchanging foreign currency to make transactions easier.
- Some high-street banks offer fee-free spending abroad, but charging for transactions and withdrawals through monthly paid accounts.
- Research the specific offerings of different banks, such as Barclays, Chase, First Direct, Halifax, HSBC, Lloyds, Monzo, Nationwide, NatWest, and Revolut, to find the best deal for your travel plans and expenses.
- Consider budget travel insurance, as some bank accounts, like Halifax Ultimate Reward debit card, offer travel insurance benefits.
- Be aware of the limits and fees associated with bank account offerings while traveling, such as withdrawal and exchange limits or transaction fees.
- To save on fees and receive up-to-date exchange rates, some banks, like Chase, do not charge for transactions made in the local currency abroad.
