NatWest current account customers may be able to benefit from its summer offer, where it’s waiving foreign transaction fees until 2 September.
Most banks charge 2%-3% in conversion fees on every transaction you make in foreign currency. The NatWest offer could be a hassle-free way to spend money on your holiday, but how does it compare to other debit cards? And is there a better way to pay?
Here, Which? shares our best tips for avoiding costly card fees and extortionate exchange rates when you’re on holiday.
What is the NatWest spending abroad offer?
NatWest won’t be charging any foreign transaction fees (also known as non-sterling transaction fees) on some of its debit or credit cards until 2 September. The offer started at the end of June.
Crucially, to be included in the offer, you must register your card for travel on the NatWest app at least 24 hours before you make any foreign transactions. To do this, in the app you should go to ‘Home’, select ‘Choose your account’, then ‘Manage my card & Google Pay’, then ‘Going Abroad’, before selecting ‘Register card’.
If you’re going to more than one country on the same trip, you’ll need to register each one. Joint account holders must register separately.
Debit cards linked to the following current accounts are included in the offer: Graduate, Student, Basic, Select, Premier Select, Select Silver, Adapt, Select Platinum, Premier Select Platinum, Foundation, Reward, Premier Reward, Tailored.
Eligible credit cards include its Reward Credit Card, Purchase & Balance Transfer Credit Card and its Balance Transfer Credit Card.
Under the offer, you can purchase goods and services while on holiday – but it doesn’t include ATM withdrawals, cash advances, refunded transactions or money transfers.
After 2 September you’ll be charged the usual 2.75% foreign transaction fee if you use your card abroad.
What other debit cards offer fee-free spending abroad?
If you’re keen to use a debit card abroad, here are the best providers that don’t charge fees on foreign purchases.
Starling Bank current account
Starling Bank is a Which? Recommended Provider, with customers rating its mobile app highly. The account is free; when you’re spending abroad it uses the Mastercard exchange rate and doesn’t charge for ATM withdrawals.
Virgin Money M Plus account
This account is free to open and you get in-credit interest of 2.02% paid monthly on balances up to ?1,000. You won’t get charged for spending on your card or withdrawing cash abroad; it uses the Mastercard exchange rate.
Chase current account
This free account also uses the Mastercard exchange rate, and you can withdraw up to ?500 a day from cash machines abroad. There is a ?1,500 limit on cash withdrawals for each calendar month.
With the account, you also get 1% cashback on everyday purchases home and abroad for the first year.
Monzo Bank current account
Monzo’s free current account doesn’t charge any fees for spending abroad, and uses the Mastercard exchange rate.
You can withdraw up to ?250 in Europe (?200 outside Europe) every 30 days fee-free; withdrawals over this are charged at 3%.
Metro Bank current account
This account does not charge foreign transaction fees within Europe; however, outside the Single European Payments Area (SEPA), you’ll be charged a non-sterling transaction fee of 2.99% and a non-sterling cash fee of ?1.50 for withdrawing cash.
Find out more: best debit cards to use abroad
What fees could you be charged abroad?
There are three different types of charges that can be layered on when spending abroad with a debit card that doesn’t include any fee-free advantages:
For purchases, you’ll usually pay a non-sterling transaction fee for converting the local currency, which applies every time you use your card to paySometimes you’ll also be charged a non-sterling purchase fee on top, often of fixed value (eg ?1.50), but it can also be a percentage of what you spendCash withdrawals at a foreign ATM incur a non-sterling transaction fee for the conversion, as well as a non-sterling cash fee (as a flat fee or a percentage).
Which? Money Magazine
Find the best deals, avoid scams and grow your savings and investments with our expert advice. ?4.99 a month, cancel anytime.
Other options for foreign spending
Besides a fee-free debit card, you could also consider a travel credit card or prepaid card.
Credit cards come in handy on holiday, particularly if your hotel or car-hire firm asks to temporarily hold a specific amount of the available balance upon booking.
You will have added protection with a credit card as you are covered by Section 75, which means you can get reimbursed if something goes wrong. Some cards also allow you to earn rewards on your spending – just remember to to pay off your balance in full every month to avoid paying interest.
Top travel credit cards include the Halifax Clarity card, Barclaycard Rewards (which also pays 0.25% cashback) and the Metro Bank personal credit card. These won’t charge you for spending or withdrawing cash abroad (in the case of Metro Bank, this applies in Europe only).
You can visit our best travel credit cards guide to find out more.
Prepaid cards can be easier to apply for than a new credit card, as there’s no need for a credit check. Loading up a set amount of money can also help you stick to a budget.
However, there are several drawbacks to factor in. Firstly, there may be an application fee (often ?5-10), and some cards then charge ?2-5 a month.
There may be minimum top-up requirements, which isn’t ideal if you only want to load a small sum to see you through the final days of your trip.
If your prepaid card expires while you still have money loaded onto it, you may have to shell out up to ?10 to reclaim it.
If you’re keen to use a prepaid currency card, opt for one with the lowest fees and check sterling card options.
Find out more: best prepaid travel cards
Which? Money Podcast
Join us on our weekly audio show for the latest money news and personal finance hacks to help make you better off.
Top tips for spending abroad
Wherever you’re travelling this summer, check our top tips to get the most out of your money.
Always pay in the local currency
Whichever card you’re using, always pay or withdraw money in the local currency – reject the option to pay in sterling. The rate used by your card provider will usually be lower than the merchant, or foreign bank, when paying in sterling.
Shop around for currency
You’re likely to find the most competitive exchange rates online rather than in buying travel money on the high street, but check the total cost.
While some websites offer favourable exchange figures, they might add delivery or handling charges on top, which could negate the benefits. You can get around this if you have a branch nearby – collection is often free.
Also look out for minimum amounts. The Post Office requires a minimum online order of ?400. M&S Bank’s minimum is just ?150; however, although it allows you to collect for free in-store, the rate can be worse if you want to collect your money on the same day.
Find out more: buying travel money online
Write down your bank’s contact details
Make a note of your bank helpline number before travelling – it’s usually printed on the back of your card. That way, you can still get in touch even if your card is stolen or swallowed by an ATM. It’s always good to carry some cash, in case card payments aren’t accepted.
Find out more: travel money advice guides