bank accounts

Metro Bank to charge for non-EU transactions from 18th March

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metro-bank-logo

If you’ve got the Metro Bank account, you’ll have received a letter informing you that they’ll be charging for using your card outside of Europe: 1.9%, plus an additional £1 fee each time you use a cash point.

To be honest, this possibly shouldn’t have come as a surprise. Visa (as does MasterCard, I believe) charge a 1% fee for handling non-EU transactions, and banks that offering 0% were simply absorbing that fee. In an age where profit margins (especially on current accounts) are being squeezed (and remember that Metro Bank is currently losing money), this was probably unsustainable.

What isn’t great is the additional charges that have been placed above and beyond the 1% fee: Metro Bank will charge 1.9% for non-EU transactions, with an additional £1 fee for using a cashpoint. Whilst this is lower than many of the other banks (they usually charge around 3%), it’s still 0.9% above and beyond what they’re getting charged by MasterCard.

What’s your alternative?

Norwich and Peterborough are still offering a current account that offers free overseas usage, but they come with usage rules or a monthly fee of £5 applies. You’ll need to:

  • Pay in £500 a month, and:
  • Either make at least five transactions a month (you may be able to cycle money through there using standing orders), or keep a balance of £5000 in your account (this really isn’t worth it, as it’s a non-interest bearing account. If you kept it in a Lloyds Vantage or Santander 123 account at 3%, you’d be earning £10 a month after 20% tax)

Interestingly, their “light” account where you wouldn’t have to pay in the £500 monthly is being withdrawn from tomorrow – I wonder whether this is in response to Metro Bank’s new charges.

Personally, I’m lucky to still have the Santander Zero Current account, which is unfortunately closed to new customers, but the future of that account is probably also in question too.

This really isn’t great news if you’re travelling outside Europe after 18 March. It’ll probably be cheapest to purchase travel money in advance of going abroad (try TravelMoneyMax from MSE for a comparison – usually the best rate is by prebooked your currency exchange and picking it up in London), and try to keep spending to one of the credit cards that offer better rates.

Getting a copy of your credit report

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When you’re applying for credit: whether that be a mortgage, an overdraft, a credit card, or even a mobile phone contract, your credit report will be checked by the lender to make sure that you’re a good credit risk.

Your credit report includes a history of the accounts that you’ve used in the past: from credit cards to bank accounts, each of these is reported back to one (or more) of the three Credit Reference Agencies in the UK.

You should check your credit report at least annually, just to make sure that nothing untoward is on there: if you don’t recognise something on your report, you could be the victim of identity fraud.

 

How can I check my report?

There’s a free service called Noddle, run by CallCredit, the smallest of the three credit reference agencies. This allows you to get a free copy of your credit report, as well as a score out of five. There’s also a few paid add-ons, but the free service is the easiest way to get a copy of your file from CallCredit.

There’s two more credit reference agencies (Equifax and Experian), which may have slightly different information about you. Unfortunately, neither of these offer a free service, and whilst both Equifax and Experian offer online credit monitoring (Credit Watch and Credit Expert), they both charge a monthly fee after the free trial is up: plus you usually have to go through a sales pitch over the phone to cancel.

For a small fee of £2, you can get a copy of your credit report, but without a score. For Equifax, you can view it online instantly, but for Experian, they’ll send you a code in the post if you request to view your report online: so it’s probably best to just ask for the whole thing by post.

You might also want to check whether credit monitoring is included with your credit card – some Capital One credit cards includes a limited version of Equifax Credit Watch that doesn’t include your credit score, but does let you refresh your credit report twice a year, and sends you alerts when your account changes.

Free Travel Insurance from your Bank

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I’m back from holiday now, but I’m still in the travel mood, so here’s a quick guide about free travel insurance with free bank accounts.

If you’re travelling abroad, you need travel insurance to cover you for medical expenses abroad, lost or delayed baggage, and trip cancellation, should you need to postpone your holiday due to illness. Hopefully none of these things will happen to you, but it’s always safer to be covered, particularly if the insurance is free!

Please ensure you read the policy documents – in particular the key facts boxes, in order to ensure that the insurance is right for you.

Free Worldwide Travel Insurance with Citibank Plus / Citigold

If you’ve got £1,800 to credit into your bank account each month (use your salary or a standing order), and have two direct debits paid out a month, the Citibank Plus account gives you free worldwide travel insurance, including winter sports cover. This covers your family (partner and children).

If you’ve got £5,000 to credit each month, then you can apply for a Citigold account, which gives you a concierge service and eight free SWIFT/CHAPS transfers a month to make payments abroad each month in addition to the travel insurance.

Free European Travel Insurance from Nationwide

If you aren’t travelling outside of Europe, Nationwide’s Flexaccount offers a lower monthly credit requirement: £750, and no need to transfer over direct debits. You do need to plan a bit in advance though, the money needs to be credited in for three consecutive months, and they’ll write you a letter when you’re eligible.

High interest current accounts – two 3% accounts

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It might not be the most interesting item to tick off your financial checklist, but don’t overlook the importance of having a good current account. Since you’re likely to have a bit of money in there to cover your everyday expenses, it’s important that you select one with a good interest rate.

At a time in which savings accounts don’t often get above the 3% mark, it’s also a good place to put in your excess savings (after you’ve exhausted your tax free ISA allowance, of course!)

Santander 123 Account

If you’re paying for your phone contract, utilities and council tax, then the Santander 123 account could be right for you.

It comes with a rather unique features: cashback on your direct debit bills. With 3% cashback on phones, TV and broadband, 2% on gas and electricity, and 1% on your council tax and water (and Santander mortgage payments), it could work out as quite good value. The caveat is the £2 monthly fee – you need to do a few sums to work out whether the cashback will outweigh the charge.

If the account makes sense for you, then it pays 3% on balances above £3,000 up to £20,000 when you pay in £500 a month.

Plus, apply through TopCashback and you’ll earn £45.45*

Lloyds Classic Account with Vantage

Someone else paying the utility bills? Here’s an alternative account for you:

Lloyds TSB’s basic current account offers a great 3% on balances between £3,000 and £5,000: and if you’ve got more than £5,000, you can simply open up to two more. To be eligible, you need to pay in £1,000 a month and stay in credit.

Find out more at the Lloyds TSB website.

*I earn a commission from this click if you are a new TopCashback user. An amount equal to this commission will be donated to charity once it it paid to me.