I have used the Halifax Clarity card for years, and indeed, they do use the same rate as Monzo.
For foreign cash withdrawals they do charge you the standard interest from the working day after you made the withdrawal, until you have paid it off. So, if you pay off the withdrawn cash immediately it’s free. If you withdraw £100 and wait a full month to pay it off, it would be about £1.50 or so.
Interesting to know you essentially have up to 24 hours to pay it off, I didn’t realise that. As you say, if you do a bill payment for the withdrawn amount immediately (or in advance?), you could avoid any interest. Quite a faff, and potential for missing the window, but a useful emergency backup.
Well, if you really wanted to be 100 % fee free it’s not that easy: you won’t know the precise GBP amount until the payment settles, which can be a few days. You also mustn’t have a positive balance on the account as per their T&C, so you’d need to eyeball it, and pay a bit more than you’d expect, but not too much so you don’t go above 0. But frankly, even if you only pay off after it settles: let’s assume you withdraw. £100 and pay it off 1 week later. That’s about 30p in interest. Considering that I just paid at least 100 to 1000 times as much for the plane ticket to get to wherever I’m on holiday I really don’t care…
What I would say is that free withdrawals without having to do this balancing act was the only reason I got a Monzo card. I travel mostly to countries where card payments are not widely done, so it’s nice. However, if Monzo were to introduce fees then I’d need to see: if there are other providers offering free withdrawal (Starling?) I’ll switch to them. Otherwise I’ll just use the cheapest one available. (shrug)
The main account vs travelcard is important to me too. I put 95% plus of card transactions through Monzo (all UK so far) and keep a balance. This is very different from getting card topping up by £50/£100 and withdrawing abroad straight away, come home out card in draw till next holiday
Thanks nanos for clarifying the reality of trying to avoid fees, and the scale of them in any case.
Fair enough, if that’s your only interest in Monzo (a free travel card), that’s a reasonable decision.
But this isn’t the service Monzo is trying to provide. They’re trying to provide a modern bank and financial control centre which doesn’t surprise people with charges. So I can’t see them trying to tailor the product to the kind of use you’re looking for. It’s expensive and can only be supported by punitive charges elsewhere (either for you or other customers).
I guess the summary is: enjoy it while it lasts and re-evaluate when the current account launches, but don’t get your hopes up that there will be large overseas free cash withdrawals. That’s just not Monzo’s focus or intended main use case.
I guess I have grown to like Monzo, but there are two thing that prevent me personally from using it “for everything” right now : the disability to export transactions to my accounting software (I suggested this in another thread) and the lack of a Web client. If these two were added then I could see myself switching to monzo for everything, but now we are getting seriously off topic… My apologies…
Not true. If you look at the Barclaycard Platinum travel card details on moneysaving expert it specifically states:
There are no fees for spending or withdrawing cash abroad until 31 August 2022.
You don't get charged interest on spending or cash withdrawals abroad, provided you pay them off in full by the date shown on your statement.
Any cash withdrawals in pounds will be charged interest from the day you make them at 27.9% representative APR, so it's best to avoid.
The rate you'll get is set by Visa, which you can check here – it tends to be slightly lower than Mastercard's rate.
Make sure you pay off any purchases IN FULL or you'll be charged 18.9% interest, which'll quickly wipe the gain from this being fee free overseas.
I wanted to reply yesterday but could only post 3 times and I’d have to waste part of my day reading other posts I’ve no interest in to qualify for ‘basic user’ access which is a complete nonsense.
Anyway due to Monzo staff not having a clue what is happening I’ve cancelled my card and I’ll move on so a company that knows what they’re doing.
But regardless, there’s obviously downsides to using a credit cards for foreign transactions. Everyone who applies will have a credit check added to their history & plenty of people will end up paying interest.
You also won’t have Monzo’s live transaction notifications & the ability to freeze your card from the app (which helps protect you from fraud) & you won’t have the detailed transaction history, with automatic budgeting either, along with the rest of the Monzo features.
Some users will choose other options but the fee’s & charges obviously aren’t a zero sum game and if this sort of approach is adopted, I’d hope that not many people will be put off -
If you are put off, that’s fine too. Monzo obviously doesn’t want to subsidise limitless ATM withdrawals outside the UK & EU and it should only be a small portion of all potential users that will end up choosing alternatives because of a fee like this being introduced.
I have just read the 2017 Monzo financial statement and I was particularly drawn to this one part
“Around 40% of the per-customer loss is due to international ATM usage outside the UK or EU, with a small minority of our user-base driving the majority of this cost. As a result, we will explore ways to reduce this cost in collaboration with our community – it will not be a profit-making exercise. UK and EU ATM usage costs us much less, and we aim to keep this free. We still believe foreign exchange at point-of-sale (in shops, restaurants and online) can be provided to customers for free.”
This leads me to believe that Monzo are looking to potentially scrap the ATM usage for customers that travel outside the EU, which could be a little problematic when travelling to some countries.
Perhaps a way of keeping this feature instead of removing it is to limit the yearly usage of free ATM usage to a limited amount per year outside of the EU? I wonder what other peoples thoughts on this are, because the idea of being able to withdraw money for no charge at ATM’s really appeals to me, because call me old fashioned, but I love to use a countries currency when I go abroad.
Whilst nothing has been decided, I’m confident that Monzo will have a fair use policy for withdrawals outside the EU. In my opinion this will most likely involve revised daily/monthly/annual limits which would suit most holidaymakers but not regular and long-term travellers who will be required to cover Monzo’s costs over the revised withdrawal limits… or I maybe I’m just talking a load of tosh.
The fact that you love to use a country’s currency (while Monzo is paying the costs) but perhaps less willing to do so if you had to cover those costs, should bring home the reasoning behind Monzo taking some action to reduce these high costs incurred by a small minority.
To me an annual limit makes the most sense(give maximum flexibility). Would be good to see the limit be varied by amount of ‘normal’ use too. In terms of day to day while abroad, how about a notification saying how much limit you have left and cost once over that