How to Avoid Annoying Bank Fees While Travelling

Last Updated | 3rd February 2023

You’ve had the trip planned for ages and spent hours working to save up spending money. The last thing you want is for banks to take a hefty cut of your hard-earned travel fund. However, if you’re not careful and don’t do some preparation ahead of time, bank fees, charges and poor exchange rates can soon add up. In this post, we outline the best ways to avoid these pitfalls, keep your money safe and ensure you’re able to spend more of it on the stuff that really matters.

There are 3 key areas to focus on when using and accessing money overseas. These are:

1. Eliminating bank foreign exchange fees and charges
2. Avoiding ATM fees
3. Getting the best exchange rate

So how do we go about tackling the above? The crucial starting point is with the bank you choose to bring on your travelling journey. There are many great travel products out there and we outline the best options below.

Debit Cards 

The easiest and most accessible way to store your money. The two banks we recommend, Starling Bank & Chase are set up and managed directly from your smartphone. With no hard credit checks, fee-free spending and cash withdrawals when abroad. They are the perfect way to access your money while travelling. Although they aren’t your household name high-street banks, rest assured, they are equally as credible and often more highly rated. In fact, both are app-based banks and don’t have branches, so you won’t find them on the high street (although Starling lets you deposit cash at Post Offices if required). Simply transfer money into your account, then like any normal debit card, use it for online or in-person card payments and ATM cash withdrawals while abroad. All for free at the best exchange rate regardless of currency. The apps are also great at helping you budget and showing you what you’ve spent your money on. Probably more flight tickets…

Starling Bank – Mastercard

• No fees on spending or at ATMs
• ATM limits: six withdrawals per day, max £300/day

Chase – Mastercard

• No fees on spending or at ATMs
• ATM limits: £500/day, max £1,500/month overseas
• 1% cashback on most spending for one year, once activated in the app

We seriously recommend anyone travelling, regardless of destination, set up one or both debit accounts. It’s quick, easy and free to do so. Simply download the bank’s app to your smartphone, apply, transfer in your spending money and save yourself a small fortune on your next adventure. Besides if you have both you can keep one card on you while out and about and the other safely locked up in your accommodation. This gives you a backup in case one is lost or stolen #protip! Plus if one is lost or stolen, within the app you can quickly block the card.

Credit Cards

More traditional banks offer travel credit cards that can come with, fee-free spending and ATM withdrawals while overseas. Additionally, some cards offer cash back or the chance to earn rewards from your spending. Another benefit of a travel credit card is if something goes wrong with a supplier or you purchase a faulty item. You can claim back the money from your bank. Provided you paid on the credit card and the value was over £100. Credit cards are also handy for emergencies, but always be mindful that you’ll need to pay them off in full each month to avoid interest and potential fees. The best option for a travel credit card is:

Barclaycard Rewards – Visa

• No fees on spending or ATM withdrawals overseas
• No interest on cash withdrawals if paid IN FULL
• 0.25% cashback on most spending
• Five months of free access to Apple Music, Apple Arcade, Apple News+ and/or Apple TV+

Getting a credit card does require a hard credit check and approval though. Plus you have to ensure you always pay off the balance in full each month or things can again get costly.

Money Transfer Cards

The products listed here are similar to the debit card options with many of the same perks. However, you can pre-load and exchange your money into the local currency within the app, and then spend this pot of predefined money. Additionally, they also double up as international bank accounts, allowing you to receive payment like a local, with your own local account details. These products are also a great way to transfer money between countries, you’ll get better rates and much cheaper fees than traditional banks. So as well as opening one of the debit card accounts, we highly recommend you open one of the accounts listed here. Both are app-based again, so upon downloading to your smartphone, simply apply within the app.

Wise – Mastercard

Sign up with this link to get a fee-free transfer of up to £500

• Card Delivery Fee £7
• Uses interbank exchange rate, plus fee of 0.41% on conversation
• ATM limits: two per month free up to £200/month, 1.75% + 50p after this
• 179 countries you can use the card in
• 49 currencies you can exchange in advance
• 10 currencies you can get local account details

Revolut – Mastercard or Visa

• Card Delivery usually £4.99
• Uses interbank exchange rate, however 1% fee at weekends or for Thai Baht, 0.5% fee if exchanging over £1000/month
• ATM limits: first five/£200 free per rolling month, 2% (min £1) after this
• 200+ countries of use
• 30 currencies you can exchange in advance

ATM Fees

It’s important to note that while all the cards and accounts mentioned above won’t charge foreign transaction or ATM withdrawal fees (provided you stay within the defined limits). The local ATM you end up using could still charge you a fee, so be mindful of this. This fee is a result of the ATM bank in your destination, not your home bank. Therefore a little bit of research is needed for each country you travel to. Often banks have partner banks in other countries that allow customers to withdraw money for free. If this proves to be unsuccessful, search which bank ATMs in your destination country are free / charge the lowest fees. Avoid ATMs in strange locations / not attributed to banks, as these often charge higher fees. If all else fails and you’re forced to pay local ATM fees think about withdrawing more cash in one go. The fee is often a flat rate and charged regardless of the amount being withdrawn. For example, taking out £10 or £500 will cost the same. Getting money out in bulk can cut down on the number of local ATM fees and help stop them from adding up. Although there is now a trade-off with keeping the cash safe. Carrying large amounts of cash means there is more chance this could get lost or stolen.

Exchange Rates

Whether withdrawing money from an ATM or paying by card, online or in person. When prompted to select either the local currency or your bank’s home currency, ALWAYS select the local currency option. This ensures you get the best rate and avoid any potential fees from the destination bank. It’s also worth noting that Mastercard products often have better exchange rates compared to Visa, but the difference is marginal.

Another important note on exchange rates is the further removed you get from the near-perfect interbank exchange rates. The worse a rate you’ll get. This is why it’s a terrible idea to exchange currency at local exchanges or the airport itself. These services are so far down the chain that after everyone has taken a cut, you’re the one left with an awful rate. With the products mentioned above, you go from little old you, on the foreign exchange market. To having the financial clout of Mastercard or VISA behind you, whom are able to get rates very close to the interbank exchange rates. Which in turn is directly passed onto you in the form of better exchanges rates!

Cash

If you need to use cash, or the destination you’re visiting still widely operates everyday transactions in cash. Then avoid exchanging this at home and especially at the airport before you fly! If you’re 100% sure you will need cash on arrival, then only exchange the bare minimum needed. Alternatively, upon landing at your destination, use a local ATM at the airport. You’ll likely get a much better rate than you would have done at home, especially for more obscure currencies. Although if you can wait, we recommend withdrawing your cash away from the airport ATMs, as you’ll likely get even better rates and further reduce the chance of any potential local ATM fees.

Conclusions

For ease and accessibility, we think everyone should get their hands on one if not both the recommended debit cards (Starling Bank or Chase). You get the same if not better perks than you would with the credit card option. But don’t have to worry about hard credit checks, remembering to pay off the bill or potential interest. If you really wanted to cover yourself the credit card (Barclaycard Rewards) could be kept for emergencies.

For anyone wanting to transfer sums of money between different countries, be sure to use either Wise or Revolut. Both offer super-low transfer fees and great exchange rates. Far cheaper than what you would pay on international transfers with standard banks. Plus both accounts come with debit cards and work almost as well as the debit accounts.

Don’t get currency at home. Don’t exchange money at airports. Always pick the local currency when offered the choice. And find ways to avoid/cut down on local ATM fees wherever possible.

If you follow the above advice you’ll avoid having to pay annoying bank fees while travelling. Allowing you the chance to spend more of your money on the stuff that matters, like flights, accommodation, activities, food, sunset drinks and so much more!!

Disclaimer: Although the fundamental principles apply regardless of your home nationality, the products mentioned are from a UK-based perspective. However, your home country likely has equally great products with similar benefits. Before taking out any of the products mentioned be sure to read the small print and check the product is suitable for your needs. Any of the products that have been recommended are in no way affiliated links and are based purely on trying to provide the best advice and options available.