How we calculated the total charges for each provider
High street banks
The published charges from these high street banks for a standard current account have been used to calculate the total charge. These can be found here:
In addition to these charges, we have included the card scheme premium above the interbank rate. To quantify this premium, we have taken a basket of 6 currencies (EUR, USD, ZAR, AUD, THB, CHF) and calculated the difference between the daily card scheme benchmark rate and the average interbank rate, where the average is defined as the mean of the high and low rates for the day. The daily ECB daily rate was applied as a further cross check to confirm these results. From 3rd January to 31st July 2022, the average card scheme premium equated to 0.52%.
We have used these published challenger banks charges for a standard, free of charge current account to calculate the total charge:
It is worth noting that although Starling and Monzo charge no fee themselves for standard transactions, their customers still end up paying a charge based on the difference between the card scheme rate and the real time interbank rate. To quantify this, we have taken the average card scheme premium as calculated for high street banks (see above). For Monzo, we have also included the ATM surcharge that would apply in the US. For Revolut, we have included the 2% ATM surcharge above £200, the 1% weekend surcharge for exchanging GBP to USD, and the 0.5% fair usage premium for spend over £1000.
Travel money products
The published charges from these travel money products have been used to calculate the total charge where possible. Where the terms don’t make the rate or spread available, we have used website rate calculators and failing that, talked through with customer services operators. The products are based on standard free of charge accounts but take no account of upfront charges for cards, inactivity fees, etc. For credit cards, no monetary value is associated with the potential negative impact on a customer's credit rating of withdrawing money from an ATM.
For the Halifax Clarity card, charges are calculated as the applicable card scheme premium at 0.38% and the rate of interest that applies immediately to cash withdrawn from an ATM. This has been calculated based on a mean average of the quoted representative APR range at a monthly 1.801%, assuming the balance is paid in full one month after the withdrawal.
For Curve, we have included the 2% ATM surcharge for withdrawals over £200, the 2% surcharge that applies to spend over £500 and the 0.5% surcharge for spending at the weekend in USD.
For Caxton FX, we have assumed a pre-load of GBP converted into USD at the enhanced exchange rate which would apply to a $2k load. Note that in the scenario where GBP is loaded onto the card and not pre-converted to USD, an additional charge of just over 0.5% would apply, based on the quoted 2.49% charge and the card scheme premium.
For Fair FX, we have assumed the use of a Dollar card, pre-loaded using GBP converted into USD, at the rate spread quoted using the live rate calculator. We have also included the $2 ATM surcharge applicable to the dollar card. For the Fair FX everywhere card, with GBP loaded and not pre-converted to USD, a surcharge of 1.4% would apply, but Currensea were unable to establish the base rate spread over Mastercard which would apply to the transaction.
For CannyApp we have netted off the 3% cashback from the base 7% spread charged to leave a 4% charge and included the card scheme spread on top of that.
For Travelex’s money card, we have included an initial 2% fee for GBP top-up and a further 2.4% charge for pre-conversion to USD. For non-pre-conversion, a rate of 5.75% applies, increasing the total charge by over 1%.
For the Post Office Travel Money card, we have assumed a top-up in GBP with the commission charge of 1.5% and spend in USD attracting a cross border charge of 3%. We have also included the ATM withdrawal charge. For pre-conversion, Currensea were unable to establish the rate spread from the terms and conditions or the website. Rates supplied via customer services on the phone indicated a similar premium versus interbank would apply on a non-promotional basis.