Metro Bank drop free use abroad outside EU

13 January 2014, 14:50   By Julia Kukiewicz

ONE of the UK's best current accounts for spending and taking out cash abroad will get a little less useful for travellers in two months time.

metro bank branch
Credit: ChrisGhinda/

From March 18th, Metro Bank customers will only get free use abroad when travelling to countries in the Single Euro Payments Area (SEPA).

Metro Bank told us that rising fees for making transactions abroad, outside of SEPA countries, meant they were "simply unable" to continue offering the service.

Metro free use countries

Austria Belgium Bulgaria Croatia Cyprus Czech Republic
Denmark Estonia Finland France Germany Greece
Hungary Iceland Ireland Italy Latvia Liechtenstein
Lithuania Luxembourg Madeira Malta Monaco Netherlands
Norway Poland Portugal Romania Slovakia Slovenia
Spain Sweden Switzerland

As you can see, most of Metro Banks free to use countries are in the Eurozone plus some SEPA members, like Iceland.

In all, it still makes the account a good deal for most UK consumers who, as Metro Bank point out, are far more likely to use their cards in Europe than further afield and are likely to face high use abroad fees from other banks.

"The overwhelming majority of our customers' card transactions occur in the UK or Europe, so we're confident that by offering completely free transactions in Europe and outstanding value in the rest of the world our customers will continue to benefit," Craig Donaldson, Chief Executive of Metro Bank said.

Even so, the feeling that free use abroad is too expensive seems to be catching, and we're unlikely to see any other UK banks make transactions in SEPA countries free either.

Down to one use abroad debit option

Norwich & Peterborough building society also withdrew one of their free use abroad accounts today.

From three at the start of the month we're now down to just one free to hold, free usage abroad debit card, with the Norwich & Peterborough Gold Classic account.

Useful Links
More on use abroad: here
Best cards for travel: here

The building society told us that they wanted to replace the old Gold Lite account with a more straightforward current account - the Gold Start, available from today - but it's notable that the Gold Classic must be used as a main account.

That is, account holders must pay at least £500 a month into the account or hold a balance of £5000 or more, to avoid a £5 monthly account charge.

How much to spend abroad?

Perhaps, like Nationwide, N&P found that consumers were taking their account just for the use abroad perks, causing the business to lose money on the accounts.

Nationwide scrapped their free use abroad and started offering free annual European travel insurance for main account holders and cheaper use abroad with a specialist credit card or by 'earning' with a general credit card.

Most other banks also prefer to offer a credit card as a use abroad option.

That's left most ordinary debit cards potentially very expensive for customers travelling abroad.

For example, the Norwich & Peterborough building society's new Gold Start account charges 75p for every debit card transaction account holders make (i.e. each purchase) and £2 for every ATM withdrawal when the card is used abroad.

And that's perhaps one of the cheaper options on the market.

A standard Natwest debit cardholder, for example, will pay a fee of 2.75% of any purchase they make (and at least £1 per transaction) and a 2% fee for any cash transaction like an ATM withdrawal (and at least £2 and up to £5 per transaction).

SEPA and use abroad

As we said above, Metro Bank's action shouldn't be taken as a sign that the SEPA scheme will make paying or taking out cash in France or Spain any cheaper, at least any time soon.

The SEPA scheme is intended to make it easier for businesses and individuals to transfer money or make recurring payments like Direct Debits more quickly and reliably.

It won't affect any of our UK schemes like Faster Payments but it will make it easier and to make payments to euro accounts.

However, it'll be most useful for people living in countries with the Euro, who should find electronic transactions between Euro accounts much improved.

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