Nationwide starts charging for overseas purchases

Posted in 'Personal Finance' by Richard Catlin

05 March 2009

Nationwide Building Society has announced that it is scrapping their promise of fee-free overseas banking for over 1 million of its customers.

From the beginning of May, Nationwide credit and debit card customers who pay for goods or who withdraw cash outside of Europe will have to pay a 0.84% fee for each transaction, rising to 1% in July.

Credit cards that don’t charge commission for overseas transactions are now very thin on the ground – something that has been a major selling point for Nationwide for some time. The Building Society says that the fee, which is actually imposed by Visa, can no longer be absorbed. It argues that their credit card remains much cheaper than most other card issuers.

With the pound struggling against both the Euro and the Dollar, the introduction of an extra charge for Nationwide card holders is bound to prove unpopular.

For anyone making a credit card purchase overseas, this move leaves the Post Office Credit Card as a clear choice. This card charges a 2.5% fee for any cash withdrawal, but there are no commission fees for overseas purchases.

The Post Office Credit card is becoming increasingly picky about its new customers, and if it is out of your reach because of your credit rating, there is a very competitive alternative.

The Fair FX Prepaid MasterCard is available in either Euros or Dollars, and allows you to make fee-free purchases in your chosen currency. You can also withdraw cash, with competitive fees of just €1.50/$2.00 per withdrawal. Exchange rates are also competitive. Although there is a £9.95 fee for the card itself, this is waived if you load the card with at least £500.

Using a credit card to book your holiday comes with two major benefits if your credit rating is good enough however. The Post Office Card will not only allow you to spread the cost of paying for your holiday by offering 0% on purchases for 3 months, but also gives you added peace of mind by protecting you should the airline you book with go bust – as was the case in the XL fiasco last year.