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.