How to save money while on holiday with fewer bank fees

Switching to a fee-free card could help you travel smarter.

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Published: July 10, 2026 at 12:02 PM

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If you're going abroad on holiday this summer, make sure your bank doesn’t charge you every time you pay with plastic.

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Most credit and debit cards come with a foreign use charge of between 2.75% and 2.99% of what you spend. So if you pay £100 on a family meal out, your bank will serve itself a £3 portion. And if you use a card to pay a £1,000 hotel bill, your bank will snaffle its own £30 gratuity.

The only reliable way to avoid this levy is to use one of the growing number of cards that don’t charge it.

On my count of 121 credit cards listed in MoneyFacts, 92 make the charge of up to 2.99% and 29 do not charge anything for foreign use.

Many banks have some cards with a charge and some without – and those without may have a monthly fee, such as NatWest Rewards Black, which does not charge for foreign use but costs £7 a month.

Fee-free cards include Halifax Clarity (though other Halifax cards charge 2.95%) and Lloyds Ultra (but not its Platinum cards, which also charge 2.95%).

Debit cards are much the same.

All the major banks make the foreign use charge, but many of the newer banks – including Starling, Chase UK, Revolut and Monzo – do not, and nor does First Direct (even though it’s part of HSBC, which charges the maximum 2.99% on debit card transactions).

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You may also want to check the fees charged for using your card to withdraw cash abroad.

Travellers are often confused by the offer that many foreign shops and restaurants make at the till: asking if you want to pay in sterling or the local currency.

Always say local currency, as the charges made locally for converting your money into sterling will be higher than the Visa or Mastercard charges if you pay in the local currency – as much as 10% in some cases.

Barclaycard, Lloyds and NatWest also add on the foreign use fee even if you pay in sterling. Santander and HSBC do not do this, but HSBC specifically warns that its 2.99% fee is often cheaper than the charges the local retailer and bank will take.

Before you leave the UK, check if the cards you have are free for foreign use and take those abroad. If not, take out a new fee-free card.

And whatever you do, never accept the local “pay in sterling” offer – it will always cost you more.

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*This article is intended as generic information only and is not intended to apply to anybody’s specific circumstances, demands or needs. The views expressed are not intended to provide any financial service or to give any recommendation or advice. Products and services are only mentioned for illustrative rather than promotional purposes.

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