Hole in the wall leaves hole in the pocket

Brits abroad make around £6 billion worth of cash withdrawals every year mainly from foreign ATM machines.

And every year Brits will be charged £250 million just for the privilege of taking out cash on holiday. That’s a lot of spending money gone straight to the coffers of the banks back home.

As summer approaches, now is the time to sort your finances so that you can take that trip abroad stress-free. If you decide in advance how to use your cash, it’s one less thing to worry about as big day approaches.

Counting the cost

Banks and building societies will often charge you twice for the same withdrawal from an ATM overseas – once for using an ATM abroad with your debit card, and again with a so-called "conversion" or "handling" fee.

For example, if you withdraw £100 abroad using your debit card, you could be charged £2.50 plus a 2% conversion fee, meaning you’ll have paid a whopping £4.50 just for accessing your cash.

Who to avoid
A handful of banks don’t charge for using ATMs abroad, and only one – Nationwide – won’t charge you for the conversion fee either, meaning its current account is the only one you could use abroad to get cash completely free with a debit card.

That means everyone else will charge you something – so check what your bank does now so you can decide how to pay for things on holiday before you travel.

The most expensive are:

Bank / Building Society Handling Fee ATM charge Cost of £100 withdrawal


Royal Bank of Scotland

2.65% 2.25% (max £4) £4.90

Lloyds TSB



2.75 2% (min £2) £4.75

As most have a minimum charge, the golden rule if you have to take out cash is ‘the more the better’ per withdrawal. Taking out a tenner is going to cost you proportionally more than taking out £100.

Your options

As long as you don’t get into the habit of taking out small amounts of cash at every turn, using ATMs can be a cheap and safe way to get foreign cash. Bank’s exchange rates are usually competitive and – especially if you’re with Nationwide – the one-off fees can work out cheaper than finding a local dealer to exchange your travellers’ cheques.

Travellers cheques however are a bit like a safety catch – you’re covered if they get stolen and you can exchange them everywhere, even in your hotel. Not so with a card – if that gets stolen you might be covered by travel insurance but it can take a while to get emergency cash to you. Plus often foreign ATMs aren’t as well stocked as those in the UK so it can be a bit of a nightmare finding somewhere to give you money.

Credit cards are a good alternative and can be cheap to use. The chances are you will get a better rate of exchange using a credit card than using travellers cheques or getting cash from a cash machine – so if you can put it on the plastic, it’ll be worth it. Hint: get a 0% purchase credit card and you won’t pay interest on anything you buy while abroad.

Warning: don’t rely on the credit card for cash abroad – you’ll be hit with similar fees to the debit cards, so only use it in shops and restaurants, plus most cards charge a higher APR for cash.

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