Want to avoid card fees for cash withdrawals abroad? Here’s how… | consumer affairs
Using a typical credit or debit card to withdraw money while abroad can mean paying costly and unnecessary fees. But shop before you go and you could avoid overpaying.
Financial firm Moneyfacts says a holidaymaker who withdraws £250 from an ATM overseas will typically face a fee of £11.88. The same withdrawal to a credit card would typically incur a £14.95 charge, before interest.
Using cards in shops and restaurants can also be expensive, with spending £50 on a debit card attracting £1.38 in charges, and the same purchase on a credit card costing £1.50. Figures are based on HSBC accounts.
“Those who have been waiting for a holiday for a long time may be paying more for their trip and the rising cost of living could also affect their pocket money,” says Rachel Springall, finance expert at Moneyfacts.co.uk.
“Vacationers can then look to put their money to work, and avoiding a typical debit or credit card for spending abroad is a good way to avoid wasting money on unnecessary charges.”
Fees to watch out for are transaction, conversion and withdrawal fees, which often amount to 2% or more of money spent or withdrawn. Many banks also have a minimum, which means that costs can be relatively higher for small purchases and withdrawals.
Moneyfacts indicates that there are debit and credit cards that do not incur fees. For debit cards, this means opening a checking account with the provider, which could mean committing to paying a certain amount each month.
Starling Bank, Metro Bank and Virgin Money all offer no-fee checking accounts that don’t charge in Europe for using a debit card. Metro Bank and Virgin Money have transaction fees on card use in more remote countries.
Credit cards with no transaction fees are available, but there will be other costs associated with this type of expense, including interest on the cash you have withdrawn in most cases.
Barclaycard Rewards Visa, Halifax Clarity Mastercard and 118 118 Money Mastercard all allow travelers to make withdrawals and payments at no additional cost and can be requested by customers of any bank.
“Some holidaymakers may prefer to get cash last minute at an airport or train station, but not only can these exchange rates be low, there is also the danger of losing or stealing money,” says Springall.