Do you use your standard/main/everyday credit or debit cards when you are abroad? Or when you buy online on foreign websites? You are losing money, or you could be saving a lot.
All cards from standard banks have a lot of hidden charges, such as foreign transaction fees (“non-sterling”, if your account is from the UK), cash withdrawal fees and interest charges even if you pay off in full your credit card bill. Moreover, banks and credit cards normally give you very bad exchange rates.
For instance, the image below shows a transaction paid by American Express (UK) in Italy. You can see a “non-sterling” transaction fee of £2.72 plus a poor exchange rate of 1.09.
Although some standard banks (e.g. Barclays) offer special cards with less or no fees, there are now digital, mobile-only banks and online money transfer services that offer far more benefits and let you save real money with no effort.
The three fees that cost you money at ATMs abroad
Most people know about one ATM fee. There are actually three — and together they can cost you €5–15 on a single withdrawal. FreeATM has a clear breakdown of all three, but here is the short version.
1. The ATM operator fee
The company that owns the ATM charges you directly for using it. This is the fee shown on screen before you confirm — the one you can at least see coming. Euronet ATMs, which are everywhere in tourist areas across Europe, charge €3–6 per withdrawal. In the UK, all major bank ATMs (Barclays, HSBC, Lloyds, NatWest, Nationwide) are free to use. The fastest way to find a free ATM wherever you are is freeatm.app — it maps operator-fee-free machines near you.
2. Your bank’s foreign transaction fee
Your own bank may charge 1–3% on every foreign transaction, on top of whatever the ATM charges. This one doesn’t appear on the ATM screen — it shows up on your statement later. A 2.5% fee on a €200 withdrawal is €5 you never saw coming. This is the main reason to use one of the cards below when travelling: they eliminate this fee entirely.
3. Dynamic Currency Conversion — the trap most people fall into
This is the most expensive and least visible of the three. When an ATM asks whether you want to pay in your home currency or the local currency, always choose the local currency. If you’re withdrawing euros in Spain and the machine offers to charge you in pounds “for your convenience,” that conversion happens at the ATM operator’s own exchange rate — typically 5–8% worse than your bank’s rate. On a €200 withdrawal that’s up to €16 lost on top of any other fees.
Euronet ATMs are particularly aggressive about this, with screens designed to make the wrong option look like the sensible choice. The rule is simple: always pay in local currency, regardless of what the ATM offers.
Revolut
Revolut is also a British company that offers a prepaid debit card (MasterCard or Visa), fee-free currency exchange, commission-free stock trading, cryptocurrency exchange and peer-to-peer payments.
The Revolut mobile app supports spending and ATM withdrawals in 120 currencies and sending in 29 currencies directly from the app. It also provides customers access to cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), and XRP by exchanging to or from 25 currencies.
Revolut currently charges no fees for the majority of its services (but for capped usage), uses interbank exchange rates for its currency exchange on weekdays, and charges a markup from 0.5% to 1.5% on weekends (to cover rate fluctuations).
In July 2019, Revolut launched commission-free NYSE & NASDAQ stocks trading within its app for customers in its “Metal” plan (not free).
Key features:
| Admin fee | Transaction Fee | Cash withdrawal Fee | Card Issuer | UK residents only |
| 0 | 0 | None up to £200 per 30-day period, 2% above | Mastercard or Visa | No (see supported countries below) |
It is supported only in the European Economic Area (EEA), Australia, Canada, Singapore, Switzerland, and the United States (check their official website).
Referral offer! Get £15 once you open an account and add any amount of money using this link. Steps:
- Install the app.
- Verify your identity.
- Add money (you can easily do it from your smartphone without extra fees).
- Order a physical card from the app.
Monzo
Monzo is another very popular UK-based mobile-only bank. Originally operating through a mobile app and a prepaid debit card, in April 2017, their UK banking licence restrictions were lifted, enabling them to offer a current account.
Behind the scenes, Monzo uses TransferWise (find more about its partnership here), so rates are normally the same.
Monzo app keeps gaining popularity in the UK, and it is adding additional services regularly. Some of these are:
- Open joint accounts.
- Energy provider switch service.
- Loans (3.7% APR Representative on loans of £7500 to £15000, and 19.5% on loans up to £7500).
- Earn loyalty points.
- Pay interest on savings (in ‘Savings Pots’ above £1,000).
- Cash ISA (UK).
Latest news! Monzo has removed ATM fees and limits for countries in the European Economic Area (EEA). Read more here.
Key features:
| Admin fee | Transaction Fee | Cash withdrawal Fee | Card Issuer | UK residents only |
| 0 | 0 | None up to £200 per 30-day period, 3% above. None in EEA | Mastercard or Visa | Yes |
Wise
Wise is a British online money transfer service founded in 2011 in London. It was the first company which started this kind of service in the UK and Europe. The company now supports more than 750 currency routes across the world, including GBP, USD, EUR, AUD and CAD, and provides multi-currency accounts.
The idea behind this is simple and consists of linking local bank accounts in countries all over the world. Detailed explanations of how this all works and how it can be cheaper than banks can be found here.
Some other great features, mostly covered in all the cards in the list, are:
- Hold 40+ currencies for free (see all supported currencies here).
- Instant sign-up and use.
- Freeze and unfreeze your card instantly.
- Spend on your card in any currency.
- Easy-to-use mobile app.
- Split bills with friends.
- Set savings goals, budgets, recurring payments and more.
Key features:
| Admin fee | Transaction Fee | Cash withdrawal Fee | Card Issuer | UK residents only |
| 0 | 0 | None up to £200 per 30-day period, 3% above | Mastercard | No (See below) |
The Mastercard debit card is only available in these countries:
- Europe: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France (only Metropolitan), Germany, Hungary, Iceland, Italy, Ireland, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom, Gibraltar (British Overseas Territory) and the UK Crown Dependencies: Guernsey, Isle of Man, and Jersey.
- Asia: Singapore.
- Oceania: Australia and New Zealand.
- North America: The US
However, with their fee-free transfer service (without a plastic card) you can transfer money from and to all these countries/currencies.
Starling
Starling Bank is another popular digital, mobile-only bank based in the United Kingdom, offering current and business accounts, money transfers and loans.
It is a fully registered bank and a member of the Financial Services Compensation Scheme (FSCS), so any money you keep with them will be fully protected, up to £85,000. They also have a partnership with the Post Office in order to allow cash to be deposited.
They pay interest rates on current account balances: 0.5% AER up to £2,000 and 0.25% up to £85,000.
Key features:
| Admin fee | Transaction Fee | Cash withdrawal Fee | Card Issuer | UK residents only |
| 0 | 0 | None up to £200 per 30-day period, 2% above | Mastercard | Yes |
Halifax Clarity Credit Card
This is the only credit card on the list. Halifax Clarity Credit Card offers 0% fees when used abroad.
What about the exchange rate? Mastercard sets the exchange rate the day after the transaction, using the average interbank rate for that currency over the preceding 24 hours. In practice this is close to the mid-market rate and usually competitive — often within 0.5% of what Revolut or Wise would charge on a weekday.
The key difference from Revolut and Wise is timing: those cards lock in the spot rate at the exact moment of purchase, which means you might catch a favourable moment — or an unfavourable one. Mastercard and Visa use the previous day’s average, which smooths out intraday swings. Over time the difference is small either way. What matters more is avoiding the Dynamic Currency Conversion trap described above — that 5–8% hit dwarfs any difference between card network rates.
N26
N26 is a digital, mobile-only bank based in Berlin, Germany. It operates throughout most of the Eurozone, the UK, Switzerland and the US, and it is expected to start operating in Brazil soon.
N26 provides a free basic current account and a debit Mastercard card to all its customers, as well as a Maestro card for their customers in Austria, Germany and the Netherlands. Additionally, customers can request overdrafts and investment products. N26 also offers premium accounts (N26 You and N26 Metal), which offer additional features for a monthly fee.
In the Eurozone (except Austria and Italy), ATM withdrawals are limited to five per month for primary account holders and three per month for others. N26 charges a €2 fee for any additional withdrawal. In the UK, free ATM withdrawals are unlimited.
ATM withdrawals in foreign currencies are also subject to a 1.70% fee for a basic account and are free for N26 You and Metal account holders.
| Admin fee | Transaction Fee | Cash withdrawal Fee | Card Issuer | UK residents only |
| 0 | 0 | 1.7% | Mastercard | No |
How Much You Actually Save
Scenario: €500 spending over a week in a foreign country
| Method | Exchange Rate Loss | ATM Fees | Total Cost |
|---|---|---|---|
| Traditional UK bank card | €15-25 (3-5% markup) | €10-15 (2-3 withdrawals) | €25-40 extra |
| Spanish ATM (w/fees) | €0 | €10.50 (3 × €3.50) | €10.50 extra |
| Wise / Revolut / Monzo | €0-2.50 | €0 (under £200 limit) | €0-2.50 extra |
You save €22-37.50 on just €500 spending—enough for a nice dinner in most places.
Quick Setup Guide
Before your trip (2-3 weeks ahead):
1. Choose your card (Wise recommended for simplicity)
2. Sign up online (takes 10 minutes)
3. Verify your identity (passport photo)
4. Order physical card
5. Set up the mobile app
One week before:
1. Activate your card when it arrives
2. Load money in your home currency
3. (Optional) Convert to EUR if using Revolut during weekdays
In Mallorca:
1. Use your card for everything possible
2. Withdraw cash once for small expenses (stay under the free limit)
3. Always select “EUR” when asked about currency
4. Keep your phone charged to track spending
FAQ: Digital Banks
Are these cards safe?
Yes. Wise, Revolut, and Monzo are all FCA-regulated (UK) and insured up to €100,000 under deposit protection schemes. They use the same security as traditional banks.
What if I need more than £200 cash?
Make multiple withdrawals across different months, or accept the small fee (0.50% for Wise = €2.50 on €500, still cheaper than Spanish ATM fees).
Can I use these for hotel deposits?
Yes, but some car rental companies may prefer credit cards. Check terms before booking.
Do restaurants in Mallorca accept contactless?
Yes, contactless (tap to pay) works almost everywhere, even for larger amounts.
What if my card gets lost/stolen?
Freeze it instantly in the app (30 seconds), then order a replacement. Keep a backup traditional card for emergencies.