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A review of Monzo, the app and its 0% FX fees debit card

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This is our review of Monzo and its 0% FX fees debit card.

The Monzo website is here but you need to download their app if you want to open an account.

Why should I get a 0% foreign exchange fee card for travelling?

As the Lloyds Avios Rewards Mastercard is no longer available to new applicants, there are no travel rewards credit cards which offer fee-free overseas purchases.

If you use a rewards credit card when travelling, you will incur a fee of 3% on everything you buy. This can never be justified by the miles and points earned on the transaction. It may be justified if you need to hit a spending target to trigger a sign-up bonus or a voucher such as the British Airways American Express 2-4-1.

Monzo card reviewed

Over the last few weeks we have been looking at a few no and low FX fee options. We reviewed Tandem a few weeks ago (click here). Here is our review of the WeSwap Mastercard travel money card, here is our review of Revolut and here is our review of Starling Bank.  I summarised all of the standard credit cards with 0% FX fees here.

All of these products have different features – there is no ‘right’ answer.  Some are more fiddly than others, some are prepaid cards and some are credit cards, some have added benefits such as 0% interest on purchases.

If you DO want to earn miles and points from your foreign spending, the best option is Curve Card. Curve is free and has a 1% foreign exchange fee (2/3rd lower than most cards). It recharges your purchase to any other Visa or Mastercard you own in Sterling. This means you earn miles and points on the underlying card without paying the usual 2.99% foreign transaction fee. Curve Card will pay you £5 for trying it outread our article here.

What is Monzo?

Monzo has moved on rapidly since it launched and is now, like Starling Bank, a full ‘online bank on a debit card’.  Like Starling, but unlike Revolut, it has full FSCS compensation up to £85,000 if the company goes bust.

Read our review of Starling Bank here if you want to compare.

The original Monzo product – a prepaid travel money card which could be topped up via an app – has now morphed into the current account.  There is no waiting list at present.  The company claims to have over 700,000 users although it isn’t clear how many of those are on the new current account and how many simply have the free prepaid travel money card.

Some of the services offered by Monzo will be familiar to Revolut or Starling Bank users:

the card and account are free

0% foreign exchange fees when you use your Monzo debit card outside the UK

top-up via bank transfer or debit card, or have your salary paid onto your card (no credit card top-up possible)

no cash withdrawal or foreign exchange fees when you use your card at an ATM abroad

Monzo card bank review

you can send and receive money to friends with Monzo accounts very quickly via the app

a £200 per month fee free ATM withdrawal limit, with a 3% fee thereafter (note that Starling Bank has no limits)

free £20 overdraft and after that you pay a fixed 50p per day – this is an optional feature which, if turned on, is included on your credit file

works with Apple Pay

Other features include the ability to lock the card from within the Monzo app if it is lost or stolen, instant notifications for all transactions and the ability to set spending targets in the app for categories such as eating out or groceries.

Monzo Bank Ltd. is a fully licensed bank.  You can, if you wish, pay your salary onto your debit card or ask friends and family to send money to your card using the standard sort code and account number format.

You can also set up direct debits and standing orders to be paid from your Monzo balance, because this is a ‘proper’ online-only current account.

There is another additional feature of using Monzo as opposed to withdrawing cash on a credit card.  ATM withdrawals via a credit card can show on your credit file.  Some potential lenders may take a negative view of this (they may think you are desperate for cash). As Monzo is taking money from your own credit balance, it will not show on your credit file.

The only issue is that Monzo limits free ATM withdrawals outside the UK to £200 per month and charges a 3% fee thereafter.  This could be an issue in countries where card acceptance is lower.  Starling Bank does not have this limit and could be the swing factor if you withdraw a lot of money abroad.

Conclusion

This is only a brief overview of what Monzo Bank has to offer. I have no experience of it myself but, like Starling Bank, a lot of HFP readers have posted very positive comments about it.  The quality of record keeping, and the various ways you can search and track your spending, seem particularly popular.

It is important to note that this is a ‘proper’ current account. You can, of course, download the Monzo app, open an account to get the debit card and use it purely for travel purposes, but you will end up with a 2nd current account.  It’s also not clear how many people are on the waiting list and how long it will take to actually open an account.

There is no obligation to pay your salary into Monzo.  You can fund your account via the app using a debit card from your main bank.

As this is a travel site, I don’t want to go into the specifics of how Monzo Bank works as a current account provider. What we can say is that – with 0% fees on foreign spending and cash withdrawals – it ticks the two main boxes you want in a card to use abroad.

If you are not willing to use Monzo Bank as a full current account, you may find a product like Revolut (albeit that Revolut is also transitioning into being a ‘proper’ current account and also has a low ATM limit of £200 per month) or a standard 0% foreign exchange credit card cleaner. Remember that as your Monzo card is a debit card and not a credit card, you do not get Section 75 protection if you have problems with any item purchased abroad.

If you currently use Monzo, please let us know via the comments how you find it.

The Monzo website is here if you want to find out more. To apply, download their app.


Want to earn more points from credit cards? – July 2021 update

If you are looking to apply for a new credit or charge card, here are our July 2021 recommendations based on the current sign-up bonus

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the other top current deals:

British Airways American Express card

British Airways American Express

5,000 Avios for signing up, no annual fee and a companion voucher for spending £20,000 Read our full review

BA Premium Plus American Express card BAPP

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

Nectar American Express

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Virgin Rewards Plus credit card

Virgin Atlantic Reward+ Mastercard

15,000 points bonus and the most generous non-Amex for day to day spending Read our full review

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these offers.

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

Amex Platinum Business American Express

American Express Business Platinum

40,000 points sign-up bonus and a long list of travel benefits Read our full review

British Airways Accelerating Business American Express card

British Airways Accelerating Business American Express

Earn both Avios and BA On Business points with your business spending Read our full review

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending:

Barclaycard Select Cashback Credit Card

1% cashback and no annual fee Read our full review

Comments (81)

  • Swiss says:

    A little OT but has anyone compiled a list of which credit cards definitely treat Revolut as a purchase? Limited of course to the types of cards readers of this site will hold. Hilton Honors, IHG, new Virgin etc. Or does anyone have specific experience of these 3 in particular?

  • Seb says:

    I use Monzo everyday and I really love the product.
    When I’m abroad, it is now the only card I use.

    Note that the following feature is not available.
    “you can send money via their app to bank accounts in different countries”
    Can you remove it from your list?

    • Rob says:

      Will do.

    • Chen W says:

      Well it will be very shortly as they’re in the process of integrating with another company’s system. Perhaps Rob could also review that particular company’s card product as well at some point in the future? Disclosure: I work for this company but don’t want to name the name. Happy to make an intro to the card product which I think is worth a review on this site as well.

  • Iain findlay says:

    I’m not sure I would recommend Curve. I had it linked to my Tesco Mastercard and as it turns out stupidly withdrew Euros while abroad and have now been charged £42 in cash transaction fees. I need to check that this is all against overseas transaction but I suspect the two £6 charges are for two £200 I have withdrawn from UK ATM.
    I also got an email from Curve alerting me to this. Curve have washed their hands of it.
    Isin

    • TGLoyalty says:

      See article yesterday. This affects all of these new fintech companies not just Curve.

      IHG is fine atm

  • Roger1* says:

    Joe, if it’s instant notification of a card purchase you need, try the Tandem Mastercard. Till staff at Woolworths and elsewhere in South Africa were impressed by the almost instant ‘ding’ last month.

    I have the original Santander Zero MC (no monthly fee) but haven’t used it now for well over a year. Time to cancel, I think.

  • Doug M says:

    Which, if any of these ‘new banks’ allow you to hold € or $ deposits?

    • Genghis says:

      Revolut, though not a bank

      • Doug M says:

        Thank you. I’ll have a look. Been a Citibank customer for years because of this, mostly just holiday money, buy when I have some spare £ and think the rate is OK, although over time switched to using the Lloyds Amex. Citi quite difficult and have purges of (seemingly) non profitable accounts, which is definitely me, nice to know there’s a fall back option if I want to continue with € and $ deposits.

        • Bagoly says:

          If you have an address in a Eurozone country (except so far, Malta, Cyprus, Latvia or Lithuania) then there is n26 which is similar to Monzo/Starling, but based in Germany and so in EUR.

          They are supposedly expanding to accept UK and USA addresses this summer.

        • the_real_a says:

          I have revolut for exactly this purpose – i hold a $ account at HSBC and trasnfer to and from Revolut to “use” the funds either to convert or use via the debit card. Subject to the usual KYC checks the amounts you can trasnfer are quite large and should be adequate for most purposes. Charges for a SEPA trasnfer within the EU in $, £, euro are free to and from Revolut. HSBC charges me £4 per trasnfer out.

          The revolut wallets allow you to “lock in” a currency trasnfer exchange rate if you like to do that sort of thing.

    • Rob says:

      HSBC, not that you asked, has Euro deposit accounts – I’ve got one. No interest and no easy way of getting your money out except via a transfer, but if you just want to dump a pile of Euro it is fine.

      • Doug M says:

        Thanks Rob. Citi is pretty slick with this. They’re current accounts, and you can just link your debit card through the app to instantly switch it to your $ or € account. They’re not a retail bank in any real sense other than this though. No branches, can pay in cheques through (checks thru) post, but no cheque book for account holder any more, a £ € $ ATM in Canary Wharf, but they’ve never charged me for using anyone else’s ATM in UK, Europe or USA so long as currency matches linked account. Works for me as I need little contact with bank beyond electronic payments. Another oddity was they stopped me funding my investments with Ladbrokes and William Hill when that US Wire Transfer law was enforced a few years ago. I keep a separate Lloyds account for paying in odd cash or cheques from the primitives still using these things. I’m part retired and don’t earn as much now, and I suspect given my ‘pay no bank charges philosophy’ I’ll be ripe for dumping at the next purge.

  • JPV says:

    OT as no bits – I’ve read other people say that after receiving their first Amex card, they were not credit checked when applying for additional amex products

    I’ve only been an amex member for 18 months. Wasn’t searched on my 2nd card, but for my latest (3rd) card I was hard searched again. No personal details have changed.

    Is there any trick to avoid being hard searched? I put in my existing card details as part of the application as usual. No idea why they ran the search this time, but it does limit my ability to apply for other things a bit

    • Paul says:

      No idea. AMEX have always done a hard search on my credit file when applying for numerous cards over the last 7-8 years

    • the_real_a says:

      AMEX have always hard searched me on every card i have taken out.

      • the real harry1 says:

        Yep same here I think, we’ve never had an instant yes decision as far as I remember – never been refused, though – I imagine this is to allow the hard search to take place

  • Andym says:

    Also to add Monzo was never sold as a prepaid travel card, it was always a beta to the current account

  • Andrew25 says:

    Another added benefit that Starling has over Monzo is that Starling pays 0.5% interest monthly on credit balances. Not much I know, but every little helps!

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