Home » First Direct scraps debit card fees when abroad

First Direct scraps debit card fees when abroad

by Press room

First Direct customers now get FREE spending abroad, as bank battles back against challenger rivals

  • First Direct scraps its foreign transaction fees, joining only a few other banks
  • The median foreign transaction fee faced by debit card holders is 2.75%

First Direct is no longer charging its customers for using their debit card abroad, joining just a handful of other UK banks. 

There will be no additional transaction fees or mark-ups when using the card outside of the UK, with the rate will be decided purely by Mastercard’s exchange rate.

Most debit cards come with a non-sterling transaction fee and cash withdrawal fee  every time customers use their card abroad.

New First Direct current account customers receive a £175 cash bonus if they pay in at least £1,000 within three months, and now will not be charged extra fees when spending abroad

The median foreign transaction fee faced by debit card holders is 2.75 per cent according to Fairer Finance, while a typical debit card also charges £11.88 when customers withdraw £250 in cash abroad, according to Moneyfacts analysis.

First Direct becomes one of the few banks to not charge these costly transaction fees. It will include cash withdrawals at ATMs anywhere in the world.

However, it’s worth noting that some cash machine operators may apply a direct charge for withdrawals from their cash machines, and this should be advised on screen at the time of withdrawal. 

On top of its fee-free spending offer abroad, First Direct also pays a generous £175 switching bonus, £250 interest-free overdraft and a 7 per cent regular savings account. 

It’s worth pointing out that First Direct credit card customers will continue to be charged a 2.99 per cent transaction fee when spending abroad. 

Chris Pitt, chief executive at First Direct, said: ‘At First Direct we are committed to supporting our customers as they navigate the rising cost of living. 

‘That’s why we’re waving goodbye to transaction and withdrawal fees on our current account, so customers can make the most of their travels without worrying about extra charges. 

‘We hope this will help people enjoy their hard earnt holiday with extra peace of mind.’

What other banks offer fee-free debit cards abroad? 

HSBC customers have access to its new service Global Money, which customers can apply for if they have an active HSBC current account.

Customers can order a multi-currency debit card when they apply and it can be used fee-free at home, or wherever they are. 

With this debit card, they can spend or withdraw cash with no HSBC foreign transaction fees. 

New digital bank Chase also does not charge any foreign transaction fees.

No fees or charges: When abroad, Chase won't charge for using its account

No fees or charges: When abroad, Chase won’t charge for using its account

It also allows its customers to withdraw up to £500 each day from cash machines. However, when travelling abroad it allows for a maximum of £1500 to be withdrawn each calendar month. 

Starling Bank’s current account also offers fee-free debit card withdrawals, and card spending abroad.

Just like Chase and First Direct, it passes on Mastercard’s real exchange rate, and doesn’t add anything on top. 

It does limit cash withdrawals to six each day, with a daily limit of £300, however – so it’s worth bearing that in mind if you intend to exceed that amount on any given day.

Fee-free: The debit card that comes with the Starling account doesn't charge for card spending or cash withdrawals anywhere in the world

Fee-free: The debit card that comes with the Starling account doesn’t charge for card spending or cash withdrawals anywhere in the world

Monzo customers can also use their debit card for free when abroad.

However, there is a 3 per cent fee if you withdraw more than £250 cash in 30 days in the UK and European Economic Area.

Outside of Europe, customers will be hit by the 3 per cent fee if they withdraw more than £200.

For a £5 monthly fee, Monzo customers can opt instead for the Monzo Plus account which will enable them to withdraw up to £400 for free, anywhere abroad, each month.

It pays to go local

If you’re using your card outside of the UK and given the choice of paying in pounds or in local currency, consider choosing local currency. 

By selecting this option, you’ll usually get a better exchange rate and you’ll avoid any additional conversion fees the retailer or their bank may charge.

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