Why was I charged for cash in France with my Starling card?

Paying a fee to spend abroad or withdraw cash from an ATM has long been a real pet peeve of mine, so over the years I’ve spent some time tracking down debit cards that allowed me to avoid this.

My most recent foray into this was having a bank account with Starling, which offers free spending and withdrawals abroad in addition to its impressive take on digital banking.

I’ve been happily using my Starling debit card for this for several years (having a card for overseas spending is a classic money-saving trick), but then, just after New Years, something strange happened.

I went to get some money from an ATM on a family trip to Innsbruck, Austria, in early January, and a warning flashed that I was going to be charged.

I wanted to withdraw about €80 and the machine told me I would have to pay about €4 for this.

Free but not free: My Starling Bank account doesn’t charge for foreign transactions or withdrawals, but the ATM had other ideas

I was somewhat surprised by this. After all, with my Starling card I do not pay any costs for withdrawing cash abroad. Thinking it must just be a quirk of this particular ATM – and somewhat offended – I abandoned the transaction and decided to find another ATM.

Unfortunately we didn’t encounter any on our way back to the hotel. Inevitably, the sod law meant that this led to the increasingly rare scenario of needing some money the next day.

“I thought you had some money last night?” my wife said.

“No, it wanted to sue me,” I replied.

“Well, make sure you get some out next time, no matter what,” she said.

Of course I didn’t, because the next machine I went to wanted to charge me too.

Thinking I might have just been unlucky with two machines from the same bank, I tried to track down another one.

Except that another bank’s machine wanted to pay me too.

Finally I gave up and paid to withdraw some money.

I didn’t really think about this – except that I attributed it to indictments, perhaps because it was an Austrian banking oddity – until two weeks ago when I was in France.

I went to get some cash from an ATM at a Credit Agricole branch, this time in the French Alps – and there was another charge warning.

The ATM wanted to charge a €5 fee on my €80 withdrawal. I canceled the transaction and checked that the same fee applied to €100. It did, so as this was a fixed amount I decided to pay the higher amount and lumped it together because I didn’t have time to try and track down another bank.

What is going on here? Why do I suddenly have to pay to withdraw money from foreign ATMs when I have a debit card that supposedly makes it free?

First off, this isn’t Starling’s fault. Our savings and banking guru Ed Magnus got in touch and the bank told him that nothing has changed at Starling. So it was the ATM that had other ideas about being free, not my bank.

Usually when something like this changes we hear grumbles from This is Money readers, but that hasn’t been the case this time, so it’s hard to say if this is now commonplace.

But a little detective work seems to show that it might be something related to Brexit.

Under EU law, banks are not allowed to charge customers from another European Union country more for withdrawals than their domestic customers.

There is no ban on charging money for ATM withdrawals or limits on fees, but they should be the same for domestic customers and customers from other EU countries.

We’ve lost this protection with Brexit and while charging doesn’t seem to be widespread yet, some European banks have clearly decided to take this as an opportunity to milk some money out of the British.

Credit Agricole is one of these banks and has introduced that hefty €5 ATM withdrawal fee just like the banks I tried in Austria, the name that appears in my transactions was Hypo Tirol Bank.

I suspect these won’t be the only banks – so if you’ve also been unexpectedly charged when you thought it should have been free to withdraw cash abroad, please email and tell us at editor@ thisismoney.co.uk with foreign cash in the subject line.

These charges increase the incentive not to use cash abroad and stick to card spending instead.

I would say they make finding a debit or credit card that offers free spending abroad even more important. Otherwise you run the risk of being stung by your own bank and those abroad.

> Check out our roundup of the best foreign spending cards


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