Do you use your credit or debit card abroad? If so, you’ll know just how frustrating it can be to get charged extra bank fees each time you use your card. Whether it’s foreign transaction fees or ATM fees, read on to find out how to avoid them on your next trip overseas.
Know your fees
Before we begin, let’s take a quick look at the possible fees you could be charged whilst away:
- Non-sterling transaction fee – a charge for every transaction you make with your card. For UK customers this is usually in the region of 2.75-2.99%
- Non-sterling purchase fee – charged every time you make a purchase using the card. Usually about 0-1.25%.
- Cash withdrawal fee for foreign ATMs – charged every time you use a foreign ATM. Ranges from about £1.50-2.
These are rough estimates, and will vary from company to company. It’s always good to familiarise yourself with your own bank’s fees and charges before you go away. Don’t forget that on top of these fees, you’ll also be charged extra by bureau de changes and foreign banks when converting currency.
Now let’s look at some easy ways you can avoid these fees.
1. Get a prepaid currency card
Get yourself a card like EasyFX Card and you’ll never have to pay those pesky fees again. Prepaid currency cards are a great way to carry your holiday money with less risk. Use them instead of your usual bank card and you’ll be paying for everything in the local currency, thus avoiding all those foreign bank fees. EasyFX’s card is completely free and involves no hidden charges. You simply top up your account with a credit or debit card, purchase your currency and start spending. Find out more here.
2. Use Global Alliance ATMs
A group of banks across the world have come together to form the Global ATM Alliance, a network of major international banks who allow their customers to use their ATMs with no fees. For UK customers, Barclays is the main bank participating in this. If you’re a Barclays customer you can use foreign ATMs from banks such as Deutsche Bank, Bank of America, BNP Paribas and Westpac without being charged foreign fees.
3. Never choose to “pay in sterling”
When using your debit or credit card to make a purchase abroad, you’ll often be asked whether you want to pay in the local currency or in sterling. At first, paying in sterling seems like a great idea because you know how much you’ll be paying in your own currency and there are no surprises. But don’t be fooled. Choosing to pay in sterling will always be more expensive due to something called Dynamic Currency Conversion. This is where the vendor gets to set their own exchange rate, which will usually leave you out of pocket when compared to your own bank’s exchange rate. Choose instead to pay in the local currency and let your bank apply the exchange rate later on.
4. Avoid the airport bureau de change
The exchange rate you see offered in airports is usually not good, and airport exchange booths are best avoided unless you want to pay a hefty commission fee on top of a poor exchange rate. Some alternatives include purchasing your currency at your high street bank before you go, or buying it online where some of the best exchange rates can be found. Even using an ATM to withdraw currency is going to give you a more favourable rate than the airport booths, so it really does pay to plan ahead on this one.