UK Markets closed

Top debit cards for overseas use curtailed

Metro Bank and Norwich & Peterborough (N&P) Building Society are making changes to their current accounts.

N&P is scrapping its Gold Light account, which offers fee-free card transactions abroad, from 13th January.

Meanwhile, Metro Bank will start to charge for debit and credit card transactions outside of Europe from 18th March.

Metro Bank scales back

Holidaymakers that have a Metro Bank account will have to pay a 1.9% non-sterling transaction fee for debit and credit card purchases from March. On a transaction of £100 that’s a £1.90 charge.

For non-sterling cash transactions or withdrawals a transaction fee of 1.9% plus a £1 cash fee will be applied. On a transaction of £100 that’s a £2.90 levy.

However, the bank won’t charge for non-sterling transactions made in Europe.

Back in 2010, Metro Bank was the first high-street bank to launch in a century and claimed it was bringing a banking revolution. Many signed up because of the unique perks offered like instant replacement of lost or stolen debit cards and better opening hours, as well as the rare offer of fee-free card transactions abroad.

Craig Donaldson, Chief Executive of Metro Bank, put a positive spin on the news that this major perk is to be scaled back. He said: “The overwhelming majority of our customers’ card transactions occur in the UK or Europe, so we’re confident that by offering completely free transactions in Europe and outstanding value in the rest of the world our customers will continue to benefit.”

[Compare current accounts]

N&P scraps Gold Light

Meanwhile Norwich & Peterborough Building Society is also dealing a blow to holidaymakers.

Its Gold Light Current Account, which offers fee-free debit card and cash transactions abroad, is being scrapped and replaced by the Gold Start Current Account, which is missing this feature.

The Gold Light account will be withdrawn from 13th January, but existing customers will continue to receive the benefits of the account.

N&P hasn’t yet revealed how much it will charge new Gold Start customers for non-sterling card purchases or cash transactions.

New customers can go for the Gold Classic account for fee-free card use abroad. However, it comes with a £5 monthly fee unless £500 is deposited monthly and a balance of £5,000 is maintained.

Where to go now

N&P’s Gold Classic, as well as Cumberland Building Society’s Cumberland Plus (for local customers), are now the only (potentially) fee-free current accounts that offer debit cards that won’t attract charges when used abroad, while Metro Bank can help if you don’t plan to travel beyond Europe.

The Nationwide FlexPlus account doesn’t charge for cash withdrawals abroad, but it does attract a 2% fee on card purchases. The account costs £10 a month, which gets you a range of other benefits including worldwide travel insurance and 3% in-credit interest on balances up to £2,500.

Credit card alternatives

However, if you are happy to put your travel spending on a credit card there are a range that won’t charge you fees. Just remember to clear your balance when your bill comes through to ensure you avoid any interest payments.

The best of the bunch is the Halifax Clarity Card as it doesn’t charge a cash advance fee nor a card purchase fee when used abroad.  If you make any cash withdrawals, you won't be charged a fee but you will be charged interest from the date the withdrawal is made.

Meanwhile the Post Office Platinum MasterCard, aqua Advance MasterCard, Nationwide Select Credit Card and Capital One Classic Extra won’t charge you for card purchases, but they will for cash transactions. These cards also come with other perks like 0% balance transfers, interest-free purchases and cashback.

The Saga Over 50’s Platinum Visa won’t charge you for card purchases either and comes with a rare 0% on cash advances of up to 55 days. But a cash advance still attracts a 2% fee (or £2) at home or abroad. This card is only available to those aged 50 or over.

Finally the Nationwide Visa card is another alternative for fee-free spending abroad, but you’ll have to work for it. For every £5 you spend in the UK you will earn £1 to use fee-free abroad. There’s no limit to how much you can build up and you can carry over what you rack up from year to year. However, if you spend more than your allowance you will be subject to a 2% fee on purchases. A 2.5% fee applies to any cash transactions.

[Compare credit cards that don't charge for overseas use]