Payment Cards: Fees Abroad

At a glance

Find out how to use payment cards abroad, the fees charged, and how to use your card wisely.

The comparison website TopCompare gives us some interesting explanations below on the costs of using debit and credit cards abroad:

Using a credit or debit card while travelling abroad is an easy and safe way to pay.

However, financial institutions charge usage fees that can vary quite a bit, depending on whether you use the card to withdraw cash or to make payments, and whether you're inside or outside the eurozone.

Credit card or debit card: what's the difference?

First, a quick clarification. There are two types of payment cards:

a credit card lets you make purchases or cash withdrawals that will be debited from your account at the end of the month. You therefore benefit from a form of "credit" during that period. However, the credit limit is capped.
a debit card (e.g. a Maestro card) lets you make purchases or cash withdrawals that are debited immediately. The amount is therefore taken from your account straight away. Some debit cards don't allow a negative balance.

Fees for using a credit or debit card

Within the eurozone

If you withdraw cash in a country within the eurozone, you generally don't have to pay any extra fees. However, those with a free current account will usually pay a fee if they withdraw cash from an ATM that doesn't belong to their own bank. Transaction costs are generally around 50 cents per withdrawal. There are, however, a number of free current accounts that let you avoid these fees, such as Argenta's Giro+ account or Keytrade Bank's Keypack.

Any transaction fees applicable to a cash withdrawal with a debit card are, in any case, lower than those for a credit card. Looking at the rates of the four major banks in Belgium, you'll pay at least €5 if you use your credit card at an ATM.
Most banks use the following formula to calculate fees: a flat amount + a percentage of the amount withdrawn. At some banks, you only pay a certain percentage of the money you withdraw. Keep in mind that most banks apply a minimum threshold. For example, if you use an ING credit card, you pay 2% in transaction fees. This major bank charges a minimum fee of €5. So if you withdraw, say, €50, you still pay €5 rather than €1 (2% of €50).

For payments made within the eurozone, you don't need to pay any transaction fees, whether with your credit or debit card. Note, however, that a credit card can sometimes involve other costs, such as interest charges linked to a card with a credit facility. In that case, you pay monthly interest if you spread repayment of the credit amount over several months. If you use a prepaid card or a card without a credit facility (the credit amount is debited from your account the month after your purchases), you avoid interest charges.

See the comparison tables below this article for an overview of fees by bank

Outside the eurozone

The situation is different for those planning a trip within Europe outside the eurozone (such as Denmark, Sweden, Hungary, Poland, the Czech Republic, Bulgaria, Romania or Croatia), or to far-flung destinations such as the United States or Asia. In these countries, you pay in a different currency, so you have to pay a currency exchange fee. In most cases, the exchange rate is lower for credit cards than for debit cards.

Using a credit card as a payment card

If you use your credit card, for example, in a shop or restaurant, you generally only have to pay a currency exchange fee. This fee usually ranges between 1.5 and 2%. If you carry out the same operation with a standard debit card, on top of the exchange fee, you'll also pay a transaction fee. How this transaction fee is calculated varies from bank to bank. Some banks work with a percentage, while others prefer a flat fee. Other banks opt for a combination of a flat fee and a certain percentage of the amount withdrawn.

Withdrawing cash

If you withdraw cash abroad, the situation is a little more complicated. For some banks, it's more cost-effective to use your card up to a certain threshold. Banks sometimes use complex formulas to calculate these costs.

Let's take the example of BNP Paribas Fortis, the market leader. To calculate the cost of a cash withdrawal with a bank card, this bank uses the following formula: 0.30% of the amount + €2.86 + 1.63% (exchange fee). For a withdrawal with a credit card, it uses the following calculation method: €6 + 1.6% (exchange rate). BNP Paribas Fortis only applies a flat fee for cash withdrawals with a credit card. From €1,000 onwards, withdrawing cash is therefore cheaper with a credit card. For smaller amounts, it's better to use your standard bank card. The calculation method for costs is shown in your bank's pricing information sheet.

See the comparison tables below this article for an overview of fees by bank.

Neobanks

If you travel regularly outside the European Union, it may be worth taking a look at what "neobanks" have to offer. These new, entirely digital banks are becoming more and more common in Belgium.

At N26, for example, you don't pay any fees for withdrawals made with your credit card outside the European Union if you choose one of its payment plans.

Revolut, meanwhile, offers a current account with which you can make payments in a foreign currency at the interbank exchange rate. What's more, depending on the plan chosen, cash withdrawals are free up to a certain amount.

A few tips

Are you a customer at several financial institutions where you have a credit or debit card? Take into account the fees and commissions you'll be charged so you can use the most advantageous card.
Get in touch with your bank to ask about the current rates.