Major bank axes free spending abroad and adds new £1.50 fee for holidaymakers

The new fees will be rolled out from August 29

Metro Bank will start charging customers to use their debit card abroad next month.

In an email to customers last week, the high street bank shared that it would start charging customers a 2.99% fee on debit card transactions in Europe from August 29. Customers withdrawing cash through an ATM machine will also face the 2.99% charge plus an additional £1.50 fee. Metro Bank says the fee will be added to each individual transaction.

Currently, the bank does not charge customers to spend on their debit cards or make cash withdrawals in Europe. However. outside Europe, Metro Bank charges 2.99% for spending and charges the £1.50 fee for cash withdrawals.

The email, received by customers on June 27, 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 a £1.50 ATM fee. This charge is applicable for each transaction you make."

With the new fee, Brits will now have to spend more when using their card abroad. For example, if you spend the equivalent of £100 on your debit card, you would be charged £102.99 for that transaction from August. If you were to withdraw the equivalent cash out of an ATM, then with the new fees you would be charged £104.49 according to Metro Bank's terms and conditions. For a smaller purchase of £20, a Metro Bank customers would be charged 60p in additional fees. If you made three separate £20 transactions you would be charged an extra £3 in fees.

Metro Bank told the Mirror that the charges have been introduced due to falling demand. A Metro Bank spokesperson said: "Over time we’ve seen our customer’s needs and expectations evolve and the demand for this service has been declining over a number of years.”

Metro Bank was set up in 2010 as a "challenger" bank to bigger, more traditional lenders. It was launched in the wake of the financial crisis and was the first High Street bank to open in the UK in more than 100 years. Currently, there are close to three million customers banking with Metro Bank.