A MAJOR high street bank has plans to make its UK debit cards fee-free for customers using their plastic abroad.
HSBC is set to simplify the pain of spending abroad after the bank confirmed its ambition to make all UK-based debit cards fee-free for holidaymakers, The Sun can reveal.
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The move would mark a significant departure from traditional banking practices and underscores HSBC’s commitment to enhancing customer experience globally.
Currently, most major high street banks charge fees when customers use their debit cards for spending and cash withdrawals abroad.
Only First Direct 1st account and Virgin Money M customers benefit from fee-free spending and withdrawals when using their bank cards overseas.
Fees usually differ from provider to provider and card to card – but they can add up quickly.
These charges tend to fall into two categories:
But stopping off on the way to the beach and spending £5 on a drink and a bite to eat could cost you an extra £1.15 in fees.
While it might not seem much initially, multiple small daily transactions can quickly rack up sizeable costs.
However, HSBC current account customers can avoid paying fees abroad if they sign up for the bank’s Global Money Account.
Customers are issued a separate Global Money debit card to use abroad.
In the Global Money Account on the HSBC app, customers can deposit and convert pound sterling into a range of currencies including euros, U.S. dollars and Australian dollars and transactions are paid in the local currency.
They can also withdraw up to £1,000 a day at foreign ATMs without facing a fee.
However, this setup has its downsides, including the fact that it’s only open to those who have signed up for mobile banking.
But The Sun can now reveal that the bank has plans to eventually waive all fees on its UK-based debit cards to ensure that nobody pays more in fees than others when travelling overseas.
Sources told The Sun that the change will begin with Premier current account customers before funnelling down to HSBC Advance and standard bank account customers.
They stressed that while the plans are in early works, the change isn’t confirmed to happen anytime soon.
In the meantime, HSBC current account customers without a Global Money Account continue to be charged a 2.75% non-sterling transaction fee and a 2% cash withdrawal fee (excluding Premier Account customers).
What are the alternatives for spending abroad?
THERE are other specialist cards that can give you a great exchange rate and fee-free spending and cash withdrawals when abroad.
These cards include travel credit cards and pre-paid cards which can let you pay abroad without fees or at a set exchange rate.
Travel credit cards
Travel credit cards allow you to spend money abroad without being hit by any fees or hidden charges.
But, they may still charge you for taking cash out.
We recommend the Barclaycard Rewards Visa because it doesn’t charge for using it abroad, and there are no fees for withdrawing cash if you pay off your bill in full each month.
You must always pay off your balance before the end of the month with these cards to ensure that any money you save isn’t wiped away by paying interest.
Prepaid card
An alternative to carrying cash or your debit card around is to get a pre-paid card.
Brands like Revolut, Wise and EasyFX all provide prepaid travel cards.
HSBC launched its Zing subsidiary in January 2024, which gives existing and non-HSBC customers access to a prepaid debit card without fees.
The card can hold up to 10 currencies and be used in more than 200 countries.
These cards allow you to put a set amount of cash on the card at a fixed exchange rate.
So if the rate is good now you can put money on your card, and it will stay that rate when you are on holiday.
But, these cards can sometimes have hidden costs and charges so be sure to read the small print.
What other debit cards come with fee-free spending abroad?
A number of smaller online-only banks offer fee-free spending abroad when current account customers use their debit cards overseas.
But First Direct, an HSBC subsidiary, is the latest big brand to axe fees for processing debit card payments in foreign currency and withdrawing cash.
It’s joined a growing list of other names.
Chase
Anyone with a Chase debit card can make payments or withdraw cash outside the UK without being charged fees.
However, there is a cash withdrawal limit of £1,500 a month.
Any purchases abroad have the current Mastercard exchange rate applied.
Meanwhile, you may be charged additional fees by local banks when using their cash machines.
You can sign up for a Chase bank account by visiting www.chase.co.uk/gb/en/.
Starling
Challenger bank Starling offers fee-free debit card withdrawals and payments made in local currency when abroad.
It also passes on Mastercard’s real exchange rate and doesn’t add anything on top.
But you can only withdraw up to £300 every day.
You can sign up for a Starling current account by visiting www.starlingbank.com/current-account/.
Monzo
Another challenger bank, Monzo, also lets customers use their debit card in certain countries abroad without applying additional fees.
It also passes Mastercard’s exchange rate directly on.
You can make unlimited fee-free cash withdrawals if you’re in the European Economic Area (EEA).
However, outside this area, you can withdraw up to £200 every 30 days for free. If you go over this amount, you are charged 3%.
Again, you can sign up for a Monzo bank account by visiting monzo.com.
Kroo Bank
Challenger bank Kroo offers fee-free debit card withdrawals and payments made in local currency when abroad.
Overseas ATM withdrawals are only fee-free up to £200 a month, after which you’ll need to pay a 3% fee.
You can find out more by visiting kroo.com/current-account.
