Using a debit card abroad: fees, exchange rates and protection

Using a debit card abroad is convenient, but on most UK current accounts it is not free. MoneyHelper, the government-backed money guidance service, says using your debit card abroad typically means a foreign exchange fee, often around 3% of the transaction amount, plus a spending or cash machine charge, typically between £1 and £3 each time you use your card, except for euros in the EU¹. Those charges apply every time you tap, insert or withdraw, so a fortnight of small purchases can add up to a surprising sum.

The scale is easy to underestimate. Which? calculated that a standard TSB debit card incurs fees of 2.99% plus £1 per transaction on purchases, and that making two £50 purchases and three £50 cash withdrawals abroad would result in charges of £15.48². On very small spends the percentage effect is dramatic: spending just £5 with a card that charges fees could set you back £1.15, an additional 23%². Halifax, one of the UK's biggest current account providers, charges a 2.99% foreign currency transaction fee on its standard debit cards, plus a £0.50 fee per foreign purchase and a £1.50 fee per foreign cash withdrawal³.

Not every account works this way. Halifax's Reward, Ultimate Reward, Student and Graduate accounts, and Bank of Scotland's Silver, Gold, Platinum, Premier, Ultimate Reward, Student and Graduate accounts, all waive debit card fees abroad³. This page explains what each charge is, how the exchange rate on your statement is worked out, which accounts skip the fees, and what your rights are when things go wrong overseas.

What a foreign transaction fee is and when your bank charges it

A foreign transaction fee, sometimes called a non-sterling transaction fee or foreign exchange fee, is a percentage charge your bank adds when you spend in a currency other than pounds. It applies whenever your card is used outside the UK, and also when you buy something in a foreign currency from home, for example ordering from an overseas website. MoneyHelper describes it as a foreign exchange fee, often around 3% of the transaction amount, charged for using your debit card abroad¹.

The fee is charged by your own bank, not by the shop or the cash machine, and it is separate from the exchange rate. When you spend abroad, the card scheme, Visa or Mastercard, converts the foreign amount into pounds using its own rate, and your bank then adds its percentage on top. Bank of Scotland states that its standard debit card foreign currency transaction fee is a 2.99% mark up over the ECB rate, meaning the European Central Bank's reference exchange rate⁷. So the rate you see on your statement is the market rate plus your bank's margin.

When the fee is charged depends on the account. Halifax states plainly that charges will apply for using your card abroad on its standard accounts⁸, and Bank of Scotland likewise tells customers there are fees for using its Visa debit card abroad, while noting it can be used for purchases and to withdraw cash at ATMs wherever the Visa sign is displayed⁵. The fee is applied per transaction, so ten small purchases attract ten separate percentage charges, and cash withdrawals can attract both the percentage fee and a fixed fee on top.

It is worth checking your own account's terms before you travel, because the difference between a fee-charging account and a fee-free one is entirely down to which account you hold, not which country you visit. The same bank can run both kinds of account side by side, as Halifax and Bank of Scotland do³.

Three charges to look for: 2.99%, £1.50 cash and £0.50 purchase fees

On a standard fee-charging debit card, up to three separate charges can stack onto a single overseas transaction. Halifax's schedule of foreign charges shows the structure clearly³:

The percentage fee is the one that scales with spending, and 2.99% is the standard level at Halifax and Bank of Scotland³. MoneyHelper puts the typical spending or cash machine charge at between £1 and £3 each time you use your card, except for euros in the EU, which matches the £1.50 cash fee and £0.50 purchase fee structure¹. The fixed fees matter most on small transactions: spending just £5 with a card that charges fees could set you back £1.15, an additional 23%⁴.

Which?'s testing shows how the charges behave in practice. On a standard TSB debit card, with fees of 2.99% plus £1 per transaction, two £50 purchases and three £50 cash withdrawals abroad resulted in charges of £15.48². The same analysis found that spending just £5 with a card that charges fees could set you back £1.15, an additional 23%². The lesson for a traveller is that the fixed per-transaction fees punish frequent small spending, while the percentage fee punishes large spending, and a card that charges both hits everything.

One further charge to be aware of sits outside the card itself. Halifax warns that when you use a debit card to withdraw cash at an ATM or branch outside the UK, a foreign currency transaction fee and a foreign cash fee or foreign currency cash fee may apply, in addition to any charges made by the service provider, that is, the cash machine operator⁹. Some foreign cash machines, particularly in tourist areas, levy their own surcharge, which appears before your bank's fees are even considered.

Paying in euros in the EEA: which fees are waived

There is one significant exception to the fixed fees, and it comes from a European rule that UK banks have kept in place. For debit card transactions in euros within the European Economic Area (EEA) or the UK, Halifax and Bank of Scotland will not charge the foreign currency cash fee of £1.50 or the foreign currency purchase fee of £0.50³. In plain terms, if you are in France or Spain spending in euros on one of their standard debit cards, the two fixed fees disappear, though the 2.99% percentage transaction fee still applies to standard accounts.

MoneyHelper reflects the same principle when it notes that the typical £1 to £3 spending or cash machine charge does not apply to euros in the EU¹. The waiver covers the euro specifically: spend in US dollars in New York or Swedish krona in Stockholm on a standard card and the fixed fees apply as normal³.

The background to this is a European regulation that capped interchange fees, the fees banks pay each other to process card transactions, within the EEA. Since the UK left the EU, that cap no longer binds UK-EEA transactions. The Payment Systems Regulator, the UK's official watchdog for payment systems, reported that since the UK left the EU, Visa and Mastercard have increased these fees five-fold for certain card transactions between the UK and the EEA where the cardholder is not present, such as online purchases¹⁰. Those interchange fees are paid between banks rather than charged to you directly, but they feed into the costs that banks recover through the fees on this page.

For the traveller, the practical points are simple. Euro spending in the EEA avoids the fixed fees on Halifax and Bank of Scotland standard debit cards, but not the percentage fee unless your account waives it³. And the waiver is a matter of each bank's own terms, so check your own bank's fee schedule rather than assuming every provider matches it.

Current accounts that charge no debit card fees abroad

A growing number of UK current accounts waive debit card fees abroad entirely, and they are not exotic accounts: several are mainstream high street options. Halifax states that holders of its Reward, Ultimate Reward, Student and Graduate accounts pay no debit card fees from the bank when using their card abroad⁶. The Ultimate Reward Current Account's terms spell this out as no debit card fees on payments in a foreign currency or on cash withdrawals, at home or abroad¹¹. Halifax's Student Current Account carries the same waiver¹².

Bank of Scotland, part of the same group, applies the equivalent waiver to its Silver, Gold, Platinum, Premier and Ultimate Reward current accounts⁵, and states that holders of its Silver, Gold, Platinum, Ultimate Reward, Student or Graduate current accounts pay nothing, described as nil, for debit card use abroad for shopping or cash withdrawal⁵. Halifax's travel guidance summarises the position for these account holders: "We don't charge any fees when you use your debit card to shop or withdraw cash abroad"³.

Beyond the big high street banks, other providers have built their card offerings around fee-free foreign use. Coutts, the private bank, states that its debit card draws funds intelligently from an account held in the foreign currency of the transaction, with no non-sterling transaction fees, for customers who hold an account in that currency¹³. PayPal launched a debit card in November 2025 with no fees for using the debit card abroad, as Which? reported¹⁴. Halifax also offers a Travel Smart service, under which customers "won't pay our foreign exchange fees if you use your debit card abroad"¹⁵.

What these accounts have in common is that the waiver is a feature of the account, not of the country you are in. The same Halifax debit card that is fee-free on a Reward account is charged 2.99% plus fixed fees on a standard account³. If you travel regularly, the account's fee schedule is the document to check, and the table of charges is where the foreign fees are listed. Our guide to current accounts covers how to open or switch one, and travel money compares the different ways to take money abroad.

Debit card, credit card or prepaid card for spending abroad

Each of the three plastic options behaves differently abroad, and the differences are mostly about fees and how quickly interest starts running.

A debit card spends money already in your account. Citizens Advice explains that when you buy something on a debit card or a prepayment card, you are using money which is already in your bank account or loaded onto the card¹⁶. There is no borrowing, so no interest, and the only costs abroad are the fees your bank charges, if any. On a fee-free account that can mean spending abroad at close to the card scheme's exchange rate with no charges at all.

A credit card borrows money, and abroad the costs stack up. Most credit cards add a foreign transaction fee of around 3% on non-sterling purchases and cash withdrawals, according to Which?'s guide to credit cards¹⁷, and Citizens Advice notes that most credit card companies will charge a commission charge when you use your card abroad¹⁸. Cash is worse still: Which? found you can expect a fee of around 3%, with a minimum of £3, when you take money out of an ATM with a credit card, and you will be charged interest on cash withdrawals straight away, with no interest-free period². Citizens Advice adds that a foreign transaction fee may be charged on top of the usual cash advance fee¹⁸. Halifax's own credit card guidance confirms that a foreign exchange fee, usually a percentage of the transaction amount, may be charged on cash withdrawals abroad in addition to a cash transaction fee¹⁹. Halifax's credit cards charge a 2.95% foreign currency transaction fee, and its example shows a €100 purchase outside the UK attracting a fee of £2.56³.

A prepaid card is loaded with money before you travel, and ABTA notes that a prepaid card can be loaded with foreign currency before you go and used abroad like a debit card²⁰. Prepaid cards can be a way to fix an exchange rate in advance, but they carry their own risks. Which? has reported on travellers unable to get their money out of prepaid foreign currency cards, and advises aiming to use unused funds within 12 months of returning home, or before the card's expiry date, whichever is sooner²¹. Some prepaid cards also charge fees for withdrawing cash in the UK, so it may be cheaper to pay for purchases with the card than to withdraw what is left²¹.

The Financial Conduct Authority's rulebook treats a debit card withdrawal in a foreign currency outside the UK as a cash transaction, which matters because banks' cash fees and credit card cash advance rules then apply²². Bank of Scotland tells its credit card customers that additional fees and interest may be charged for non-sterling purchases or for buying non-sterling currency²³.

In practice, the choice tends to work out like this: a fee-free debit account suits everyday spending and cash abroad; a credit card suits larger purchases where the stronger consumer protections matter, provided the balance is cleared; and a prepaid card suits travellers who want to fix a rate in advance and can use the funds up within the time limits. Our comparison of a prepaid travel card or debit card and of taking cash or using a card go into more detail.

Pay in pounds or local currency: the exchange rate choice

When you put your card into a machine abroad, you will often be asked whether you want to be charged in pounds or in the local currency. This is dynamic currency conversion, and the answer is almost always the local currency. ABTA's advice is to choose the local currency when asked whether you want charging in pounds or the local currency, because you will get a better exchange rate²⁰.

The reason is who sets the rate. If you choose the local currency, the conversion is done by your card scheme at its own rate, with your bank's fees on top⁷. If you choose pounds, the merchant or machine operator does the conversion at a rate it sets, which is typically less favourable, and the difference is how it makes money from the service. Your bank may also treat the transaction differently: Halifax states that where you allow the cash machine operator or financial service provider to make the conversion to sterling, it will not charge a currency conversion fee but will charge a foreign cash fee of £1.50 for each withdrawal²⁴.

The same choice appears at shop tills and in taxis, and the same logic applies. Choosing pounds means accepting an exchange rate set by someone whose interest is in the rate being poor for you. Choosing the local currency keeps the conversion with your own bank and card scheme, whose rates, as Bank of Scotland explains, are a mark up over the ECB reference rate⁷. Our dedicated guide to dynamic currency conversion explains the mechanics in full.

Where protection stops, and where to get help

The protections you have at home do not all travel with you, and it is worth knowing where the edges are before you go.

Spending on a debit card abroad uses your own money, so there is no borrowing and no interest to worry about¹⁶. But debit cards do not carry the Section 75 protection that credit cards do for purchases over £100, so if something you bought abroad goes wrong, your route is a chargeback claim through your bank rather than a legal claim against the card issuer. If your card is lost or stolen abroad, the steps are the same as at home: contact your bank immediately. Our guide to lost or stolen cards and cash abroad covers what to do, and emergency financial help abroad explains what consular support can and cannot do.

Prepaid cards sit furthest outside the protections. Because the money is loaded onto the card in advance, it is your money sitting with the provider, and if the provider runs into trouble you may struggle to get it back. Which? has documented cases of travellers unable to withdraw their own funds from prepaid foreign currency cards, and its advice is to use unused funds within 12 months of returning home, or before the card's expiry date, whichever is sooner²¹. Our guide to prepaid travel money cards sets out the protections in detail.

Buying foreign currency itself has a trap worth knowing. Halifax states it will not charge for buying foreign currency or travellers cheques on its debit card, but other providers might, so check for charges before you go ahead⁹. On a credit card, buying currency can be treated as a cash advance, meaning a cash fee and interest from day one¹⁹. Our guide to buying foreign currency covers the options.

Finally, the fees themselves are regulated in how they must be shown. The Financial Conduct Authority's rulebook defines a debit card withdrawal in a foreign currency outside the UK as a cash transaction for the purposes of banks' disclosure rules²², which is why the fees appear as separate lines on your statement rather than being hidden in the exchange rate. If you believe a fee has been charged wrongly, complain to your bank first, and if you are not satisfied with the outcome, the Financial Ombudsman Service can review the complaint free of charge. MoneyHelper offers free, impartial guidance on banking complaints¹.