We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies. You can understand more and change your cookies preferences here.


When you click on a retailer link on our site, we may earn affiliate commission to help fund our not-for-profit mission.Find out more.

9 Aug 2018

7 ways to avoid being ripped off at the cash machine on holiday

We reveal how to save money on debit or credit card transactions abroad

You may have spent months saving up for your summer holiday, so don't waste your hard-earned cash on foreign ATM fees and transaction rip-offs.

Which? rounds up some of the most common ways you risk losing money when using your debit or credit cards overseas.

Be more money savvy

Get a firmer grip on your finances with the expert tips in our Money newsletter – it's free weekly.

Email address (required)

This newsletter delivers free money-related content, along with other information about Which? Group products and services. Unsubscribe whenever you want. Your data will be processed in accordance with our Privacy policy

1. Don't opt to convert into pounds

In popular holiday destinations, especially in Europe, you'll often be given the option of converting to pounds when withdrawing from a cash machine or paying on card.

But it's usually best to turn this down and choose to pay in the local currency instead. If you opt to convert, the ATM or card terminal provider will set its own exchange rate - often significantly worse than the one offered by your own bank or card provider.

In one recent case Which? has seen, an ATM in Greece charged a whopping £200 to withdraw 200 euros at an exchange rate of just 1.0144. By contrast, the pound-to-euro Mastercard exchange rate on that day was 1.126, meaning the same transaction could have yielded 25 euros more.

To add insult to injury, the ATM also charged a £2.95 card fee.

Be wary, as the wording on the ATM display is often confusing, and you may be prompted several times to accept the currency conversion.

2. Beware hidden card fees

If you're using your debit card to withdraw cash overseas, you'll generally be charged a foreign exchange fee, which is often between 2.75% and 2.99%.

Many providers will also charge either a 2% withdrawal fee or minimum charge, whichever is higher, every time you use the card. And some will add on a flat fee for each transaction.

As an example, for every transaction on your TSB, Lloyds Bank or Bank of Scotland debit card, you'll be charged a 2.99% foreign exchange fee, an additional £1 as a flat fee and a 1.5% withdrawal charge (at a minimum of £2 and maximum of £4.50).

3. Withdraw lump sums

To avoid being stung with fees on each transaction, consider making a single large withdrawal and paying in cash.

As an example, two £50 purchases and three £50 cash withdrawals on a Santander card would net you fees of £15.35. If you withdrew £250 as a lump sum, you'd pay £11.25 instead.

Just make sure you keep the money in a secure place. It may be sensible to carry a small amount in your wallet and keep the rest in the hotel safe.

It's also worth checking whether your travel insurance covers lost or stolen cash, as some policies will reimburse you up to a set limit.

4. Consider a fee-free card

There are a number of providers on the market that offer fee-free transactions.

Online-only Starling Bank charges no fees for any overseas spending or withdrawals, while Monzo offers free transactions abroad and £200 of free withdrawals a month.

You could also opt for a prepaid card. Revolut, for example, allows you to transact in different currencies and spend, transfer and exchange up to £5,000 a month fee-free. You can also make overseas cash withdrawals of up to £200 a month.

You can also read our reviews of these challenger and mobile banks.

5. Avoid withdrawing cash on your credit card

A number of credit cards offer fee-free transactions abroad at competitive exchange rates, which might be an attractive option as long as you can pay off your balance at the end of the month.

But wherever possible, you should avoid withdrawing cash on your credit card. As soon as you make the withdrawal, you'll start incurring interest, and usually at a higher rate - even if you pay the balance off in full during your usual billing period.

These transactions may also impact your credit score, especially if you rack up a large number of withdrawals in a short time.

6. Use your credit card to pay in advance

If you're making a large purchase, you'll have extra protection if you pay on card. This can be especially important if it's a service you're paying for in advance, such as flights or a hotel booking.

Purchases that cost more than £100 and up to £30,000 are protected under section 75 of the Consumer Credit Act, meaning that if anything goes wrong, you can reclaim the money from the retailer.

Debit cards don't fall under the legislation, but many major card providers - including Visa and Mastercard - are part of the Chargeback scheme. This offers a similar level of protection, although rules vary from provider to provider.

7. Beware of scams

Fraud is a worldwide problem, and whether you're at home or abroad, it's worth remaining alert.

When using a cash machine, look for signs of tampering, like a wobbly or bulky part that doesn't belong on the machine. Action Fraud has warned that fraudsters have been known to insert card skimmers that steal your details, or devices to trap your card, into otherwise functioning ATMs.

Take a look around you to see whether anyone is standing close to you and cover your pin with your hand.

It's also important not to let your payment card out of your sight. For example, if you're in a restaurant and the waiter or waitress wants to take your card to the till to make the transaction, go with them.

Even if you don't think anything suspicious has happened on your travels, keep an eye on your statements. If you notice any transactions you don't recognise, report it to your bank as soon as possible.