/ Money

Thanks to banks, buying holiday cash costs more

Pile of foreign notes

The banks now have holidaymakers in their sights, charging extra fees to buy foreign currency even before they’ve left the UK. And that’s on top of what the Bureau de Change already charges you…

Pop down to the Post Office, Marks & Spencer or your local Bureau de Change to buy some currency before you go on holiday, and you’ll probably get stung by your bank with debit card charges.

You’d expect this with a credit card – cash withdrawals on credit cards are notoriously expensive, with most imposing transaction fees, high APRs and no interest-free period. But a debit card?

Sneaky currency charges

Some banks do more than simply charge you for using your debit card overseas – they will also charge you for foreign currency purchases in the UK, as well as abroad.

The Co-operative Bank is one of the highest chargers for buying foreign currency in the UK. If you go to a UK cash machine to withdraw cash with your Co-op debit card and then use that money to buy foreign currency, you won’t pay any debit card fees.

But if you pay directly with your debit card in this country, the Co-op will charge you an extra 2% (minimum £2 with no upper cap). And that’s on top of any commission charges imposed by the Bureau de Change itself.

Barclays, Santander, NatWest, RBS and Lloyds TSB will all charge you for using your debit card to buy currency at a UK Bureau de Change.

They’re not all bad

On the plus side, there are some ‘good guys’ that don’t charge you for using your debit card to buy currency in the UK: First Direct, HSBC, Nationwide, Halifax/Bank of Scotland and Yorkshire Bank don’t impose any extra charges.

And if you’re looking for an all-round good-value bank account for overseas use, look no further than Norwich & Peterborough Building Society. Not only does it not charge you for buying foreign currency in the UK, it won’t charge extra for cash withdrawals or purchases overseas either.

When it comes to charging fees for buying currency by debit card, if some banks can make a profit without hitting their loyal customers with sneaky charges, why can’t the others? Unless, of course, they think of their customers as nothing more than cash cows to milk for a quick buck, especially now their PPI wheeze has dried up.

Comments
Guest
James Harrison says:
31 May 2011

This is yet another financial robbery which the omboudsman and possibly parliament will have to get heavy with the banks on. Just like they did with the banks causing a global financial meltdown! It is not only unfair but criminal to charge for using one’s card to ‘purchase’ an item, this one being money. A small percentage may be allowable for utilising the services of a foreign bank, but with the global economical mechanisms, even this is unnecessary and should be stopped. Banks are a business, I agree, but they make money out of the money we entrust to them. If we don’t like it, we can always move….

Guest
Doug Knox says:
31 May 2012

We should object to secret charges, not directly visible prior to commiting to a purchase.
Preditory traders ought not hide behind charges advised after the event or in small print.

Guest
Mike says:
31 May 2011

This is disgraceful –
Happily I have accounts with two of the good banks as well as three of the bad ones!
I shall move money from bad ones to good before using good ones to buy foreign currency !
Or would the banks prefer that I use a cheque !!!!
That’ll cook their goose.

Each time they pull a stunt like this they lose more of my goodwill.
Perhaps we should each ask the banks who’ve introduced these charges to remind us when, and how openly ( ie honestly? ), if at all, they informed us of the change.

Guest
Sophie Gilbert says:
1 June 2011

Ah, when the world has only one currency, won’t we all be better off. (I’m allowed to dream, aren’t I?) In the meantime I have opened an account with Nationwide and will deal with my foreign currency through them as appropriate.

Guest
Elitist says:
6 August 2015

No we will not with your Fake unity talk, what’s next one religion, one government one world under one command! “”I joke… obviously :P””

Guest

How does the bank know it was currency I bought? The transaction goes through in Sterling as you are not allowed to make a transaction in this country in a currency other than Sterling, otherwise you could buy Dollars using Euro and not be required to “pass through” Sterling to do it. Also note that the last time I bought currency at the Post Office, they would not accept a debit card and suggested I visit the ATM first.

Guest
Mr_Tickle says:
10 June 2011

Mr Beck,

The bank know because the card machines used are either programmed as Retail (the type you use in high street shops) or Bureau De Change machines.

I work for a high street currency provider and it’s infuriating when banks make a charge and when the customer complains they direct them to us thinking we’ve made the charge.

Guest
Stefan Kowal says:
3 June 2011

Watch out for the exchange rates. Even the good guys might not be that good. On my last trip abroad, I used cash obtained at the best rate I could find at a high street ‘money shop’. I know that some folks might not want to carry too much cash around but it was the most financially efficient way that I could do it. I’m just sick of handing over my money to the bank. The bank exchange rates were a joke and the cost of using the cards abroad expensive.

Guest
LIL says:
12 June 2011

Fed up of the banks charging for travel cheques and foreign currency bought and sold,my husband bought a body money belt which he wears even in bed.We now only take enough curency to do us for a day as we can exchange our sterling at a much better rate than we get back home We have saved a great amount over the years instead of the greedy bankers pocketing our hard earned cash.