HIGH street bank will start charging customers for using their debit cards abroad later this summer.
Metro Bank is set to introduce a 2.99% charge on all debit card transactions made outside the UK from August 29 – including Europe, which is currently free, The Sun has revealed.
And customers withdrawing cash from their bank account anywhere abroad will pay a fee of 2.99% plus an ATM fee of £1.50.
Metro Bank, which has around 3 million customers, currently allows them to spend on their debit cards and make foreign currency cash withdrawals in Europe for free.
But last week, it announced in an email to customers that it would start charging for transactions made in all foreign countries from August.
An email sent on June 27 said: “After 29 August 2024, debit card payments made in a foreign currency outside the UK will be charged 2.99% of the converted transaction value in British pounds.
“After 29 August 2024, cash withdrawals made in a foreign currency using your debit card outside of the UK will be charged 2.99% of the converted GBP value plus a £1.50 ATM fee.
“This fee applies to every transaction you make.”
While a 2.99% fee may not sound like much, the fees can add up quickly as the fee is applied to each individual transaction.
For example, if you spend £20 on your card, you’ll pay 60p in charges.
So if you make five transactions worth £20, you’ll spend an extra £3 in fees.
And if you withdraw cash from an ATM, the fees are even higher.
Withdrawing £100 worth of foreign currency will cost you £2.99 plus a £1.50 withdrawal fee.
This means you would pay an extra £4.49 for a £100 withdrawal.
One customer who noticed the change said: “It’s very disappointing that Metro Bank will be charging a fee. I have had this account for over 10 years to use exclusively in Europe.
“Occasionally there have been large amounts on the account but unfortunately it will be canceled on the 29th August. Now I have to find 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 been declining for a number of years.”
What do other banks charge?
Most banks offer customers a way to spend abroad without paying any fees.
Some allow free transactions only in Europe, others have no fees anywhere in the world yet.
First direct
First Direct does not charge for using a debit card to pay in foreign currency or to withdraw cash in another country.
ATMs have a daily cash withdrawal limit of £500 (or foreign currency equivalent).
HSBC
Customers with an HSBC Global Money Account can spend abroad and withdraw from cash registers without fees.
Global Money accounts are available to all HSBC customers with an active current account and its banking app.
Other customers will be charged 2.75% for purchases and 2.75% plus a 2% fee for cash.
Lloyds Bank
Lloyd’s Silver and Platinum account customers will be able to use their debit card anywhere in the world for free from 1 July 2024.
However, Silver package bank accounts cost £10.00 per month, while the Platinum option costs £21.00 per month.
Monzo Bank
Monzo says customers can pay anywhere in any currency with their debit card without foreign transaction fees.
And if Monzo is your main bank account, you can make unlimited fee-free withdrawals in the European Economic Area (EEA) and up to £200 every 30 days anywhere else. After that, the bank charges 3%.
Santander
If you have Santander Edge, Santander Edge Up and Private Account debit cards, you can withdraw money without fees and you won’t have any foreign transaction fees for spending while you’re away.
All other accounts with Santander charge 2.95% on both purchases and withdrawals.
Starling Bank
Starling does not charge fees for using your debit card abroad.
TSB Bank
If you have a TSB Spend and Save Plus account, you won’t pay any debit card transaction fees worldwide.
Other account holders pay 2.99% in transaction fees and 1.5% in fees for all withdrawals.
There are no fees for cash withdrawals 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 for using your debit card abroad, although the bank has warned that some ATMs may still charge a fee.
You can read a complete guide to other banks that do not charge fees for foreign transactions here.
If you are exchanging cash for foreign currency, be sure to shop and buy in advance.
It is best not to use Bureaus De Change at the airport as they offer some of the worst rates on the market.
Alternatives for spending your vacation if you don’t want to exchange currency
THERE are some specialty cards that can give you a great exchange rate.
Travel credit cards allow you to spend money abroad without getting hit with any fees or hidden charges.
However, they may still charge you cash withdrawal fees.
We recommend Halifax’s Clarity Card as it won’t charge you any fees for using it abroad or pay any cash withdrawal fees.
But if you don’t pay off your balance in full, you’ll be charged 19.9 percent interest.
And you’ll be charged interest on cash withdrawals until your balance is paid off, at a rate of between 19.9 and 27.95 percent, depending on your credit score.
For more information on travel credit cards, you can read our guide here.
Prepaid cards: An alternative to carrying cash is to get a prepaid card.
These cards allow you to put a set 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 the card and keep that rate while you’re on holiday.
Just be aware that these cards can sometimes have hidden costs and fees, so read the fine print.
Do you have a money problem that needs to be solved? Contact us by email at money-sm@news.co.uk.
Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories