Lloyds customers who use debit cards on holiday face big changes next week

Club Lloyds customers will be able to use their Lloyds debit card anywhere in the world free of charge

Lloyds bank is making a big change for its members who use their cards abroad from next week. All Club Lloyds members will be able to use their debit card anywhere in the world free of charge from Monday, April 14.

The major change will mean Club Lloyds customers can make purchases or withdraw cash with their debit card in any country without having to worry about extra fees.

However, this only applies when you pay in the local currency, not if you choose to pay in pound sterling - in which case you may still be charged, reports the Mirror.

Lloyds explains on its website: “When you buy things outside the UK, you may be asked to pay in pounds sterling, or in the local currency. Paying in a local currency could help you to avoid charges.

“If you pay for something in pounds sterling, the provider of the currency conversion may still charge you. Some cash machine providers may also charge a fee.”

Club Lloyds is a packaged bank card that offers perks, such as a Disney+ subscription, six cinema tickets, a magazine subscription, or 25% off certain food and drink brands, in exchange for a monthly fee.

The account also offers exclusive savings accounts, including the Club Lloyds Monthly Saver which pays 6.25% gross/AER on up to £400 a month, and up to 15% cashback at selected retailers.

Despite there being three different Club Lloyds tiers available, the update will only benefit basic Club Lloyds customers.

This is because the basic account does not currently come with fee-free spending abroad, whereas the more expensive Silver and Platinum accounts already come with this perk.

Whereas the regular Club Lloyds account currently costs just £3 a month, the Silver and Platinum accounts come with £11.50 and £22.50 monthly fees, respectively. However, the regular account's fees are waived if you pay in £2,000 or more each month.

Lloyds is also increasing the interest-free allowance on Club Lloyds arranged overdrafts to £100 from April 14.

Martin Turner, head of current accounts at Lloyds, said: "With Club Lloyds, your holiday spending just got easier this Easter. Customers can now use their debit card fee-free when spending worldwide.

"Once you land at your dream destination, you can pay for a meal, book a trip or keep the kids topped up with ice cream, by simply using your debit card or by withdrawing cash with no debit card fee."

The removal of extra fees comes after the bank made a major change to its overdraft costs back in January, with some customers being moved onto a higher rate.

Previously, the cheapest rate was 27.5%, and was available to some Club Lloyd members.

The other rates that were available were 39.9% - the standard rate that the majority of customers were on - and 49.9%.

Now, there are new rates of 19.9% and 29.9%, as well as the old rates of 39.9% and 49.9% staying in place. Most customers are still on the 39.9% rate.

But the introduction of the new rates means someone who used to be on the cheapest rate of 27.5% as a Club Lloyds member may now be on the highest rate of 49.9%.

Some customers, however, have also seen their rate go down by being moved to the 19.9% rate. Lloyds told MoneySavingExpert.com the “vast majority” of people are paying less or the same - however, some customers have been moved to a higher rate.