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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)

  • sunguy says:

    Ive never found Monzo all that great for travel purposes … other than TFL….

    IF you are using a debit or credit card to whizz about London instead of Oyster, the information that is included on the Monzo card is really very good – including telling you exactly which day the charge (or refund!) is for! Something I have never seen on any of my other cards Ive used.

  • Ali says:

    OT as no bits
    Anyone got any spare tickets for Bastille tonight?

  • the_real_a says:

    Yes – at least that’s how i read the T&C`s

    • vlcnc says:

      Thanks, from what I understood too but wasn’t sure!

  • Nigel says:

    A review article that I read recently showed that Mastercard (as opposed to Visa or AmEx) gave the best conversion rate for foreign currencies charged in sterling to your zero FE fee card. Watch out for all these new zero fee cards from fledgling banks – they are not Mastercard backed and can use whatever extortionate exchange rate they want! Stick with the trusted Post Office Mastercard or equivalent.

    • George says:

      Come again?

      Starling, Monzo and Revolut all issue Mastercards and as such when they say no fee, they mean no fee atop the standard MasterCard rate.

      As far as I know, using a loaded rate is against the program terms – you have to use the official rate plus an optional fee. The only product I can think of that doesn’t do this is TransferWise debit which tries to settle in the original currency.

      • Mikeact says:

        I think he was trying to wind us all up, with obvious incorrect information.

    • Rob says:

      No, Mastercard processes it at their fixed rate and that is what you get.

    • the_real_a says:

      The likes of Caxton, STA and Post Office all levy a fee upto 3% on top of the mastercard rate so you need to pick your card carefully. Sterling, Monzo and Revolut all use the wholesale rate – however revolut now has sneaky charges on top – such as a weekend fee and illiquid currency fee on top of the wholesale rate.

      So whilst its not true that cards use whatever Fx% they like – some cards do levy additional fees on top – but these are clearly defined in the T&C`s

    • the_real_a says:

      One other positive thing to note on Revolut is that if you exchange currency first from their internal wallets – you get the inter-bank rate for that conversion. Subsequent use of that currency via the debit card uses the balance of the wallet first… hence its possible to get interbank rates if you want to do a bulk conversion upfront avoiding the MasterCard conversion completely.

  • Andrew25 says:

    Would like to see the proof you have regarding Monzo being the most popular travel card because I doubt that it is.

    • Crafty says:

      About 80% of my friends (I am 29) have Monzo cards.

      I only don’t for a highly irrational reason.

      It’s definitely extremely popular in its target market, which I would guess is high earning 25-40 year olds in London.

  • vlcnc says:

    Certainly amongst people I know personally and through work it is easily the most popular card. Most haven’t heard of Revolut or Starlings – I’d say Monzo easily has the best recognition out there.

    Also got offered a No FX card from NatWest my regular bank so suspect this is something that is being recognised as an attractive benefit so predict a lot of people will be offered this going forward from the traditional banks.

  • Leo says:

    This may be an age thing – or a professional thing – but I know no-one who has heard of Monzo or Starling; maybe just maybe Revolut. But then I don’t spend my social/work life discussing credit cards or banks. That being said I’ve occasionally heard people say socially that they collect “air mlles” with their credit cards. That’s as far as it goes, although I’ve tried to gently encourage. This thread is niche in the wider scheme of things.

    • vlcnc says:

      I think you are right it is probably an age thing – would say Monzo users are generally younger. Also it’s precisely why Monzo has been so effective – the people talking about it are not people who normally talk about debit cards but they are talking about Monzo to their friends it’s how I heard about it and bow other people heard it from me!

    • the_real_a says:

      This is definitely an age thing. I’m a member of quite a few travel groups on facebook and millennial/backpacker types pretty much exclusively have Monzo or Revolut. They don’t travel with laptops so run their lives via a smartphone. Who knows if they are the most popular, but Monzo`s own figures of millions of accounts holds true from what i have seen.

      • Rob says:

        The website figure is 700k for Monzo.

      • the_real_a says:

        Very true. It was Revolut claiming 1.5m users!

      • Lumma says:

        To be fair, from what I see at work (I work in a restaurant) Monzo is one of the most common cards I see after the debit cards from the main banks, Starling I’ve seen maybe once.

        It’s the same with the rewards credit cards, take out Tesco credit cards and the two BA cards probably outnumber every other reward cards put together.

    • Leo says:

      That’s quite interesting – any anecdotal info on the average age of your customers?

  • Arun T says:

    Monzo are extremely popular in the under 35, London based market. Step outside of London however and it’s a very different story.

    That said Rob, I think you underestimate just how many “millennials” read your website – plenty!

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