Best accounts to get fee-free spending abroad: Top deals to avoid getting stung with fees

If you’re jetting away on holiday this summer, the way you spend abroad is likely to have changed from pre-pandemic.

Previously, most of us would have taken a bundle of foreign currency to spend.

And while it's likely most do still take some physical money, the majority of major holiday spots accept card payments and contactless.

So, once you've found your cheap flight and a good hotel deal, the way you spend abroad can also help shave costs.

Plenty of high-street banks have moved away from charging customers for transactions and withdrawals, but now require you to sign up for a paid monthly account. Others offer free spending abroad, but they come with monthly limits.

It means that you will need to think carefully about which bank offers the best deal, depending on how often you travel and how much you might spend.

We look at what the major banks offer their customers and whether it’s the best deal for you.

If you use your Barclays debit card abroad, you’ll be charged a 2.99 per cent non-sterling transaction fee, which includes cash withdrawals.

If you choose to pay for your transaction in sterling, which some cash machines and terminals do, the fee will not apply, but there may be commission charges that make it more expensive.

However, Barclays offers a ‘travel wallet’ which allows you to buy foreign currency in the Barclays app and use your debit card as a travel money card. This is only available if you have the app.

It will charge you each time you convert GBP into another currency but you won’t be charged to convert it back.

Chase doesn’t charge for using your debit card abroad and applies the current Mastercard exchange rate to any transactions made in the local currency. This means you’re getting the up-to-date exchange and you don’t pay any fees on top of this.

You can also withdraw up to £500 a day from cash machines, whether in the UK or abroad, but there’s a £1,500 limit on withdrawals abroad in any calendar month.

One of the attractions of opening a Chase account is their generous cashback scheme, but this doesn’t apply to any purchases made outside the UK or Channel Islands, or if you pay in currencies other than sterling.

You should note that if you’re planning a holiday in a restricted destination, such as Cuba, North Korea and Iran, you won’t be able to use your card or any Chase services.

First Direct changed its fees for spending abroad a few years ago and now customers won’t pay anything for transactions.

Customers can take out up to £500 in cash daily without any charges, although there might be separate ATM fees.

Halifax does not charge any fees for transactions made in the European Economic Area for the UK.

However, for spending outside these areas, you’ll face a withdrawal fee of £1.50, another £1.50 if you choose to convert your cash to pounds, and a £0.50 charge for each transaction.

On top of this, Halifax will charge 2.99 per cent to convert your cash, which means you could run up a huge bill.

However, you will not pay any of these fees with Halifax’s Ultimate Reward debit card, which costs £19 a month and includes worldwide family travel insurance, AA breakdown family cover, mobile phone insurance and home emergency cover.

You will need to add ‘travel ready’ to your ultimate reward account, which costs £7 a week, to avoid paying debit card fees, but you may have to pay separate charges for currency conversion.

You can add up to 6 weeks of travel ready to your account and each time you book a trip, you can add one or more weeks to your account.

HSBC’s standard travel fees are 2.75 per cent for transactions, 2.75 per cent on cash withdrawals, plus a 2 per cent fee (minimum £1.75, maximum £5).

However, if you apply for a global money account, these fees are waived, and you can spend and send money around the world for free.

It’s not a prepaid debit card but you can convert the currency you need before you go and hold it in your balance to use.

Lloyds customers face a you’ll face a withdrawal fee of £1.50, another £1.50 if you choose to convert your cash to pounds, and a £0.50 charge for each transaction. On top of this, Lloyds will charge 2.99 per cent to convert your cash.

Customers with a Club Lloyds account, which costs £3 a month and £5 from June, will be able to use their debit card to make purchases or withdraw cash free of charge.

The fee-free spending abroad also applies to the Silver and Platinum accounts, which charge £11.50 and £16.95 a month, respectively.

When Monzo launched in 2015, it promised to offer a better way to spend abroad. All customers can use their debit or credit card anywhere and pay in any currency with no foreign transaction fees or hidden costs.

It also still offers free cash withdrawals for customers whose main account is with Monzo.

Monzo classifies this as someone who has paid at least £500 into their account over 30 days and has at least one active direct debit.

Customers have unlimited fee-free withdrawals in the European Economic Area, and up to £200 every 30 days anywhere else. After that, it will charge 3 per cent.

The 30-day period resets 30 days after your first withdrawal, rather than at the start of the month.

If you upgrade to Monzo Max - which costs £17 a month and has a three-month minimum term - you’ll have £600 fee-free cash withdrawals abroad and worldwide travel insurance.

Nationwide charges 2.99 per cent of a transaction amount for Flex account, Flex direct and Flex Basic accountholders, as well as an additional 2.99 per cent for cash withdrawals.

These fees are waived for people with a Flex plus account, which costs £18 a month and includes travel and mobile insurance, as well as vehicle breakdown cover.

Natwest customers with a Select Silver, Select Platinum, Reward, Student, Foundation, Premier Reward, Adapt and Basic account will pay a 2.75 per cent transaction fee and 2.75 per cent on cash withdrawals.

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However, customers with Reward Black, Black, Premier Select, Reward Platinum and Reward Silver fees don’t have to pay for transactions, but will have to pay a 2.75 per cent charge for cash withdrawals. But like other high street banks, you will have to pay for these accounts.

There is a workaround, though. A free travel account is available to all existing account holders registered for mobile banking doesn’t charge fees for the first Euro/USD 200 for withdrawals every 40 days.

Travel accounts hold up to EUR/USD 10,000 and have a 10,000 daily spending limit.

To pay for something from the account, you must hold enough foreign currency to cover the transaction. If you don’t the payment will debit the linked account and will be subject to any fees.

Like Monzo, Revolut launched with the promise to make it easier to use your debit card abroad.

It does not charge foreign transaction fees, but depending on your plan, you may be limited in the amount you can withdraw in cash a month.

If you’re on the free standard or Revolut Plus plans, you can take out £200 a month, while Revolut Premium customers - who pay £7.99 a month - can take out £400 monthly.

Metal customers—who pay £14.99 a month—have an £800 limit, while Ultra customers have £2,000. However, the plan will set you back £45 a month.

There are also limits to currency exchange without incurring additional fees. The standard plan allows a £1,000 monthly limit on weekdays, before charging 1 per cent on weekends.

The Plus plan gives customers a £3,0000 limit, with 0.5 per cent charges on weekends, while Premium and Metal customers have no fair usage or fees on weekends.

Starling customers can pay with their card and make withdrawals while away without paying any fees.

Like Chase, Starling uses Mastercard’s exchange rate and doesn’t add any fees on top.

Starling’s withdrawal limit is slightly less generous at £300 per day, both in the UK and abroad.