Metro Bank axes fee-free spending abroad

Metro Bank Holdings Plc Branches As Lender Seeks Capital Raise

Metro Bank customers are disappointed about the upcoming change to debit card fees

(Image credit: Bloomberg / Contributor)

published 2 July 2024

Metro Bank will start charging customers to use their debit cards abroad later this summer.

The high-street bank currently allows customers to spend on their debit cards and make cash withdrawals in a foreign currency in Europe free of charge.

But from 29 August, there will be a 2.99% fee on all debit card transactions made outside the UK.

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Customers withdrawing cash from their bank account abroad will pay the 2.99% fee plus an additional £1.50 ATM fee.

The move follows a string of changes to Metro Bank’s savings accounts. Metro Bank will cut the rate on its Current Limited Edition savings accounts to 3.95% on 8 July.

At the start of the year, the bank pulled its top 5.66% one-year fixed saver from the market and slashed its Instant Access Saver rate from a market-leading 5.22% to 4.51%.

We look at Metro Bank’s foreign fees in more detail, and highlight the best travel debit cards to pack for your next trip so you avoid getting ripped off on holiday.

Why is Metro Bank making this change?

Metro Bank has about three million customers, many of whom have enjoyed being able to use their debit card free of charge when travelling in Europe.

However, last week, it emailed customers saying it would start charging for transactions made in all foreign countries from the end of August.

The email said: "After August 29 2024, debit card payments made in a foreign currency outside the UK will be charged 2.99% on the converted British pound value of the transaction.

"After August 29 2024, cash withdrawals made in a foreign currency using your debit card outside the UK will be charged 2.99% on the converted British pound value plus £1.50 ATM fee.

"This charge is applicable for each transaction you make."

Customers have been disappointed by the news, with some saying they will switch to a different bank.

On X (formerly Twitter), Lateralam said: “Well done @Metro_Bank. for adding fees & flat additional charges for using card abroad. Pretty much the only reason for having the accounts. As the Bay City Rollers once said, Bye Bye Baby...”

Dimitar Christoff tweeted: “I've been with @Metro_Bank for so many years but the recent change to charges for using your debit card abroad is unacceptable. Going to redirect moneys to Monzo.”

The 2.99% fee may not sound that high, but the charges can quickly rack up, especially for say a two-week family holiday.

For example, if you withdraw £100 at an ATM three times, the total fee for getting out travel money with your debit card would be £13.47. If you also used your debit card to pay for things 20 times for an average amount of £30, Metro Bank would charge a total of £17.94.

This means a family could fork out £31.41 just to use their current account when they’re abroad. That’s enough for a round of ice-creams and a few beers, possibly with change left over.

Explaining the change, a Metro Bank spokesperson said: “Over time we’ve seen our customers' needs and expectations evolve and the demand for this service has been declining over a number of years.”

Which are the best debit cards to use abroad?

Many banks and building societies will add a fee to debit card transactions made abroad.

According to travel debit card Currensea, UK holidaymakers are estimated to be paying around £2.7 billion a year in unnecessary fees.

However, some banks don’t charge anything for using a debit card outside the UK. It’s worth noting that ATM withdrawals may still incur a fee, which can be as high as £5. So, double-check before using a foreign ATM.

The top-five current accounts with no monthly charge and no fees when you use your card abroad, according to financial ratings company Defaqto are:

Swipe to scroll horizontally

Provider	Product	Other perks
Chase	Current Account	1% cashback on purchases for 12 months
First Direct	1st Account	£250 interest-free overdraft
Kroo	Current Account	4.35% AER interest
Starling Bank	Current Account	3.25% AER interest
Virgin Money	M Plus Account	2.02% AER interest

If you don’t want to switch your current account, you could take out a fee-free travel credit card.

Another option is to take out a Currensea card. This debit card links to your existing current account, and has no fees on spending or ATM withdrawals abroad.

See Best debit and credit cards to use while travelling abroad for more debit cards, and for fee-free credit cards to use abroad.

Ruth is an award-winning financial journalist with more than 15 years' experience of working on national newspapers, websites and specialist magazines.

She is passionate about helping people feel more confident about their finances. She was previously editor of Times Money Mentor, and prior to that was deputy Money editor at The Sunday Times.

A multi-award winning journalist, Ruth started her career on a pensions magazine at the FT Group, and has also worked at Money Observer and Money Advice Service.

Outside of work, she is a mum to two young children, while also serving as a magistrate and an NHS volunteer.