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Card fee warning for Bank Holiday travellers

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Written by: Emma Lunn
23/08/2021
Holidaymakers heading abroad this coming Bank Holiday weekend should check the cost of using their debit or credit card before using it overseas.

Moneyfacts looked at the cost of using a ‘typical’ debit card overseas this summer. It used the debit card attached the HSBC Bank Account as a typical card. It charges a transaction fee of 2% (minimum £1.75, maximum £5) and a conversion fee of 2.75%.

This means it would cost £11.88 in charges to withdraw £250 in cash abroad.

Using a credit card can be even more costly. Again, HSBC was used as a typical card – its Rewards Mastercard, charges a 2.99% (minimum £3) cash withdrawal fee and a 2.99% usage fee on both cash withdrawals and purchases. This means a £250 ATM withdrawal would cost £14.95 before interest is applied.

The best debit and credit cards to use abroad

Starling Bank, Virgin Money’s M Plus current account, Nationwide’s FlexPlus and TSB Spend and Save Plus all offer free cash withdrawals and purchases worldwide using the associated debit card. But of these, only Starling and Virgin Money don’t charge a monthly fee for their current account.

The best credit cards to use abroad are Halifax’s Clarity Mastercard and Barclaycard Rewards Visa.

Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Using a credit card or debit card abroad may be the easiest way to pay or withdraw cash, but it’s a convenience that can cost depending on the fees charged for each transaction.

“Switching a bank account is simple and using the Current Account Switch Service, customers can move their account within seven working days. If consumers plan to travel more frequently in the months to come, either for work or leisure, choosing a current account that will not charge for using their debit card abroad could be a wise choice.

“Starling Bank, Metro Bank and Virgin Money all offer fee-free current accounts which do not charge in Europe for using a debit card, either for a cash withdrawal or retail transaction.”

“Consumers may prefer to use a credit card for spending abroad, which is understandable as they can easily be cancelled if lost or stolen and spenders are protected under Section 75 of the Consumer Credit Act on purchases between £100 and £30,000 if a service or goods are not provided or damaged.

“Carrying around cash might be convenient but it is clear to see how quickly a holiday can become a disaster should someone’s hard-earned cash be lost or stolen and getting cash last minute at an airport is unwise due to poorer exchange rates.”

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