Friday, 24 January 2014

Withdrawal symptoms as financial institutions cut free overseas cash transactions


Holiday Complaints
No sooner had I blown out the flames on the burning Christmas pudding then it was time to book the summer holiday. Besides getting a very good deal on a sofa, there have been countless advertisements on the television, showing sun kissed beaches, children hurtling down water slides or slow river cruises with happy couples sipping a large G&T whilst gazing out at the passing scenery. 

However, they do fail to mention just a few of the practicalities of life whilst on holiday, namely consumers trying to get money out of a cash machine abroad without paying more in banking fees than the actual Euros, dollars or other currency, you are withdrawing. If like me, you went with a fee-free benefit on one of the more generous current accounts then be warned, in 2014 there are changes afoot that could affect you.

From March 18th this year Metro Bank will be charging for both credit and debit transactions outside of Europe, whilst the Norwich and Peterborough are now getting rid of their Gold Light current account which up until now has allowed free overseas spending. Metro state that outside of Europe the charges for withdrawing cash will be 1.90% plus a £1 ATM fee, so if withdrawing £100 for example you will be paying another £2.90 on top as a levy. The main difficulty for consumers is that they are tied to their debit card unless they change their current account, and some of us have shopped around for some time to find an account that suits all our needs.

Unwary consumers caught out with additional debit card fees whilst abroad

Consumer advice from money experts are telling us to alter our spending pattern and take out a larger amount of cash, rather than just smaller amounts, if we are going to get charged each time we go to the ATM whilst on holiday. From a security point of view whilst abroad I don’t want to be carrying around larger amounts of money and neither do I suspect, do many others. It is not just the ATM fee and bank levy that is being charged but some banks such as Halifax, Lloyds, TSB, Santander and RBS are also adding an additional loading fee anywhere between 2.75 to 2.99% regardless of how much is withdrawn.

The choice is getting smaller as to the banks or building societies that do not add on these fees. The Norwich and Peterborough do still have a debit card as part of their Gold Classic that is free of fees, however, you have to maintain a balance in this account of £5,000 and make a monthly deposit of £500 or they will charge you £5 per month. Metro Bank can still be used fee-free within Europe and NationWide FlexPlus but NationWide still charge 2% for transactions and monthly fee, but there are a range of benefits that some consumers may feel is worth the £10 per month, such as UK breakdown cover, worldwide travel insurance and others.

Consumers advised to check cash transaction fees before travelling abroad

The main point is just to check with your building society or bank before you go abroad regarding their current charges and fees, and also check if, as some people still do use them, whether banks abroad will change travellers cheques. For the last two years I have only found one bank in Corfu for example who are happy to change these, I took them as backup in case the ATM swallowed my card as it did the year before, and in one region of France, got no joy whatsoever with travellers cheques.

If you have had problems or been charged for cash withdrawals from abroad then let us know – we’re listening!

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