James Daley

By James Daley

It's fair to say that over the past 10 years, I've had something of a minor obsession with the high fees that banks charge for using your card when you travel overseas. Typically, if you swipe your credit card in a foreign store, you'll be hit with a fee of around 3%. And if you take out cash, you're likely to be charged an additional fee of as much as £5 - on top of the 3% exchange rate fee.

So, for example, if I withdraw $100 from a cashpoint when I'm in the States, my bank First Direct will charge me just under £2 as an exchange rate "load" fee - as well as an extra £4.95 for using a cash machine. That adds up to total charges which are equivalent to more than 10% of my withdrawal. It's nothing short of daylight robbery.

Fee dodging

Nationwide, Halifax, Post Office and Saga have been offering credit cards, which charge no foreign fees, for years. And the likes of Metrobank and Norwich & Peterborough Building Society also offer bank accounts with fee-free debit cards which won't even charge you for overseas cash withdrawals.

But for people like me who aren't particularly inclined to move their main bank account, there's not been any  easy and convenient ways to step around overseas bank charges. Until recently.

Before I left for the States this Christmas, I signed up for a new(ish) service called Revolut - which allows me to change money between euros, pounds and dollars for no fees whatsoever. I can make the switch in seconds via an app on my phone, and can then spend or withdraw cash via a Revolut card.

Revolut makes its money from the fees that it receives from shops and banks when its card is used - but takes nothing from consumers like me.

Beautifully simple

The beauty of the service is its simplicity. Loading money into the app - and exchanging money - took a matter of seconds. And over the course of our trip, I've estimated that it will have saved me around £100 in bank fees.

Revolut is not the only start up offering such a service. There's another called Weswap - which has advertised heavily on the London tube over the past year. And there are other smaller brands coming into the space as well.

Bit by bit, challengers such as Revolut, Weswap - and Transferwise (which undercuts the banks if you need to transfer money from one country to another) - are nibbling away at the high fees that banks are charging customers at the margins.

For safety, I'm also now armed with a credit card that charges no fees - so if I'm careful, I should never need to pay another bank fee when I leave the UK. Hopefully it will only be a matter of time before banks are forced to start playing fair with their customers - so that we can use our own bank cards without fear of being fleeced when we head abroad on holiday.