Holidaymakers are now accustomed to using cash machine cards to withdraw money when abroad. But a Jobs & Money survey has found that tourists can lose up to £5.50 for every £100 they withdraw.
We asked the major banks to tell us how much it would cost to take out €200 from a cash machine in Paris, using a debit card.
As the table below shows, Nationwide was unique in not charging customers, while Royal Bank of Scotland and NatWest levied charges equal to 5.5% of the amount withdrawn. At its Ulster Bank subsidiary, its charges for customers taking out smaller amounts are even higher.
This means that a family which withdraws €1,000 during a two-week holiday in Spain this summer will pay £37.70 more if they are NatWest customers rather than banking with Nationwide.
There is also evidence that charges are creeping up. For example, Lloyds TSB will next month increase its minimum cash advance fee from £1 to £2, on top of a 2.75% foreign exchange administration fee. Minimum fees mean that travellers are better off withdrawing large sums infrequently rather than small sums regularly.
Nationwide, which is the only high street financial provider not to charge a foreign currency loading fee for customers using its cards abroad, estimates that holidaymakers are losing around £500m through unnecessary charges.
It says: "Virtually all other card providers charge a fee of 2.75% when you use your credit or debit card abroad. The reality is there is only a very minimal cost when consumers use their cards abroad. Nationwide absorbs these costs, whereas banks use it as an opportunity to over-charge customers to increase their profits.
"We would like to see other card providers remove this fee and start acting in the interests of their customers."
The banks use a bewildering array of fees and charges. For example, NatWest charges a 2.65% "exchange rate transaction fee", plus a commission fee of 2.25% up to a maximum of £4 per transaction. HSBC applies an "exchange rate loading" of 2.75% plus a transaction charge of 1.5%, with a minimum of £1.75.
Despite the fact that Jobs & Money asked all the banks to quote based on a withdrawal on Wednesday April 13, it was remarkable how much the exchange rates used varied from bank to bank. Some quoted us the Visa Euro rate for the day, others a Mastercard rate.
"The actual rate the customer receives depends on the time that the transaction is processed by MasterCards systems and not the time the monies are withdrawn from the ATM," said an HSBC spokeswoman.
Taking out €200 in Paris
The figure quoted below is how much your account will be charged for withdrawing €200 from an ATM in Paris:
Nationwide
£137.18
0%
Barclays
£140.70*
2.6%
Clydesdale/Yorks
£142.16
3.6%
Halifax
£142.45
3.9%
Abbey
£142.79
4.1%
Barclays
£142.82
4.1%
HSBC
£143.25
4.4%
Lloyds TSB
£143.40
4.5%
RBS NatWest
£144.72
5.5%
Notes * If ATM is part of Barclays' global alliance. Based on rates on Wednesday April 13, 2005.
Research by Jobs & Money
