Travelling abroad is costly enough without the added horror of returning home to find your bank statement littered with extra fees and charges after using your card overseas.
But there are ways to avoid extra costs when withdrawing money or using your credit or debit card on holiday.
Here we pick the best accounts which offer small or, even better, no fees - a worthwhile money-saver, particularly if you are a frequent-flyer.
On holiday? Make sure you're not spending too much on fees
On holiday? Make sure you're not spending too much on fees
Current accounts
Debit cards can be serious offenders when it comes to extra holiday costs. Charges can quickly add up, with some providers charging £1.50 every time you use your card.
Lloyds Bank, Halifax, RBS, Intelligent Finance, Santander and NatWest all charge. Don’t spend on these abroad.
However, there are a few options out there that can help you to avoid extra costs.
Metro Bank - best for Londoners
Metro Bank's current account is a relatively small newcomer, proud of its customer-centric approach to banking. Its current account is a straightforward, no-frills option.
No overseas charges in Europe
If you travel a lot, it could be a great money saver – although you will have to pay the going exchange rate, Metro Bank will not charge you for either using your card or withdrawing money from an ATM abroad.
Outside Europe:
Customers will now have to fork out for 1.9 per cent to make purchases and withdrawals in the rest of the world, as well as an additional £1 flat rate charge to take out the foreign currency from an ATM.
But, with the average fee between 2.75 and 2.99 per cent this is still fairly competitive, as is the flat rate charge which most banks set between £1.50 and £2.
What else?
Online and telephone banking and text and email alerts will help you to manage your account and avoid going overdrawn. There is no monthly fee and no interest paid on your balance.
Metro Bank will help you through the switching process – all you have to do is fill out a form and they will transfer your direct debits and salary to your new account.
If you’re not already a Metro Bank customer you will need to go into a branch to open an account. However, if you qualify for a current account, staff can print out a cheque book and debit card while you wait. You must be over 18 to apply.
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Watch out for
If you don’t live or work within the radius of the M25, this may put you off signing up because, at present, Metro only has a few branches - and most are in London and the South East.
HOW ABOUT A PREPAID CARD?
If you don't have a decent credit score and you are going on holiday, you could opt for a prepaid card, which will also help you to avoid currency exchange costs and fees.
This is Money has partnered with FairFX to offer readers a FREE currency exchange card.
Plus, if you top up your card with £550 you can get a SECOND card for free, too.
Also, if you often find yourself overdrawn, you will need to take care. Agreed overdrafts and unagreed overdrafts both incur interest at a rate of 15 per cent, which will be calculated daily on your account and applied monthly. There is no maximum, so watch out as interest will add up.
Although you are not charged for being overdrawn, you will have to fork out £10 for paid and unpaid items.
Charges are capped at six a month - but bear in mind you may have to start paying interest on them if it tips you into the red.
This Is Money verdict
This is a great account for anyone that regularly uses their card in Europe and who occasionally strays outside it. Its main attraction is that it makes life easy - you don't need to think about going into a bank or taking all your cash out at once to avoid lots of charges in Europe.
However, if you do often find yourself overdrawn, fees and interest will quickly cancel out any savings you make on foreign transaction fees.
If you don't have a decent credit score and you are going on holiday, you could opt for a prepaid card, which will also help you to avoid currency exchange costs and fees.
This is Money has partnered with FairFX to offer readers a FREE currency exchange card.
Plus, if you top up your card with £550 you can get a SECOND card for free, too.
This Is Money verdict
This is a great account for anyone that regularly uses their card abroad. The possessions insurance is also a nice touch – with handy free services if you find yourself in a fix on holiday or at home.
ANY OTHERS?
Nationwide also offers fairly low fees compared to other providers on both its free FlexAccountand its FlexPlus Account.
both purchases and cash withdrawals incur a 2 per cent handling fee when using a FlexAccount debit card overseas and It costs just £1 to make a withdrawal. The FlexPlus Account costs £10 a month, but it will not charge any handling fee or withdrawal charge for taking money out of a foreign ATM.
M&S Bank has launched a new free Current Account which charges no fee for ATM withdrawals while abroad. Customers will still be charged a 2.75 per cent handling fee.
The Post Office also offers the same deal, a 2.75 per cent transaction charge on foreign usage but it charges £1.50 for making a withdrawal on its Control, Standard and Packaged Accounts.
Nationwide also offers fairly low fees compared to other providers on both its free FlexAccountand its FlexPlus Account.
both purchases and cash withdrawals incur a 2 per cent handling fee when using a FlexAccount debit card overseas and It costs just £1 to make a withdrawal. The FlexPlus Account costs £10 a month, but it will not charge any handling fee or withdrawal charge for taking money out of a foreign ATM.
M&S Bank has launched a new free Current Account which charges no fee for ATM withdrawals while abroad. Customers will still be charged a 2.75 per cent handling fee.
The Post Office also offers the same deal, a 2.75 per cent transaction charge on foreign usage but it charges £1.50 for making a withdrawal on its Control, Standard and Packaged Accounts.
Credit cards
Most cards add around 3 per cent cost to the exchange rates banks themselves get. You can avoid this by picking a specialist card, which helps you to access perfect exchange rates that challenge even the best bureaux de change. Make sure you repay in full to avoid interest.
Halifax - best for cost-cutting
The Halifax Clarity credit card is currently the market-leading no-frills option for overseas spending.
No fees!
It costs nothing to transfer your balance or withdrawal cash at home and abroad, and there is no annual fee - so there are zero extra costs as long as you pay off your balance in full every month.
Additional cards are available and you can manage your account online.
PROTECT YOUR SPENDING
Another major bonus if you are spending on a credit card is the consumer protection you are entitled to, under Section 75 of the Consumer Credit Act 1974.
Put simply, if you use the credit card to buy something worth more than £100, here or abroad, the card issuer is equally liable if something goes wrong.
Watch out for
Interest is charged immediately at the card’s standard rate of 12.9 per cent. Still, if travellers pay off their balance promptly, this will work out cheaper than withdrawals with most debit cards. Unfortunately it is not permitted to preload the card with a credit balance for this purpose.
You will be charged £12 if you pay your balance late, have a payment returned or go over your limit.
This is Money verdict
You get a near-perfect exchange rate and are charged no fees with this card, making it the cheapest way to spend abroad – as long as you pay your bill in full at the end of the month to avoid interest charges.
If you are going to pay off your holiday credit card bill over several months, a 0 per cent spending will probably be better.
Another major bonus if you are spending on a credit card is the consumer protection you are entitled to, under Section 75 of the Consumer Credit Act 1974.
Put simply, if you use the credit card to buy something worth more than £100, here or abroad, the card issuer is equally liable if something goes wrong.
Saga - best for over 50s
Over-50s provider Saga offers a Platinum Credit Card which allows you to pay for goods and services abroad, without forking out for foreign currency fees on transactions. You can also benefit from discounts on Saga holidays if you pay using your Platinum card.
No overseas charges
As well as steering clear of overseas charges, when you use your Saga Platinum credit card on board any of Saga’s cruise ships, you will enjoy a 5 per cent discount, helping your money go further on holiday.
In addition, if you book a Saga holiday with your Saga Platinum credit card you will only pay a 1 per cent transaction fee, rather than the standard 2.5 per cent cost.
Read more about which holidays are available with Saga.
The Saga Platinum online service also allows you to keep track of all your spending, even when you’re on holiday. You’ll be able to check recent and past transactions and request a credit limit increase while abroad.
Platinum card holders will benefit from 0 per cent on purchases and balance transfers for the first nine months (with a 3 per cent balance transfer fee). Interest then jumps to a representative 11.9 per cent APR (variable) on purchases
You can enjoy up to 55 days of interest free credit on all withdrawals - at home and abroad. This will also apply to purchases after the 9 months introductory offer is over, which will help you to continue to spread the cost of your spending.
Watch out for
If the balance is always settled in full by the payment due date. After that, interest will be charged from the date the transaction is debited to your account.
There is a 2 per cent fee (minimum £2) for each cash advance, whether it is made abroad or in the UK.
Remember, although Saga will not charge you for your overseas spending, a local bank processing the cash withdrawal may apply a surcharge.
Watch out for
But it does charge a 2.5 per cent fee for cash withdrawals and you'll be charged 27.9 per cent representative APR interest on that money even if you repay in full. That means that while it is good for spending it is not good for taking money out of cash machines.
It is only available to Nationwide customers.
This is Money verdict:
This is a good multi-purpose card so it is a shame that it is only available to Nationwide customers who hold a current account with the building society.
If you are unhappy with your bank, it's worth a look if you are thinking about opening a new account anyway.
Nationwide's Flex Account features on This is Money's five of the best current accounts. But don't go straight for it if you haven't shopped around first for the best deal - there are plenty of good offers available at the moment for new customers.
If you do decide to switch, read our guide for step-by-step advice on how to change to a better bank account.
In Source : Daily Mail
In Source : Daily Mail
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