Nationwide card to start charging from 1 November 2010

[Helen]

I've just received this news in my weekly MonseySavingExpert e-newsletter. Very bad for me, who has used the Nationwide FlexAccount Visa Debit card all over Europe in the past couple of years, enjoying charge-free ATM withdrawals and finding it slightly cheaper to use the card when making payments, rather than getting dosh from the Post Office before travelling. (And more convenient, when the P Off doesn't routinely keep less-used currencies in stock.)
(Note: I've added the above after seeing the comment below.)

http://www.moneysavingexpert.com/news/travel/2010/07/nationwide-kills-cheap-overseas-spending-for-current-account-customers

Nationwide is pushing up overseas spending charges for millions of Flexaccount customers.
The changes, which come into force on 1 November, end the fee-free overseas spending perk the building society has bragged about for years.

In fact, a whole raft of credit cards will become substantially cheaper than Nationwide – provided they’re repaid in full each month (see the Cheap Travel Money guide for all the overseas spending best buys).

New overseas spending charges
Foreign currency loading, typically charged at 3% of the transaction, is a hidden fee Nationwide has generally avoided. However, later this year, it has decided to add a stealth charge, albeit at a lower rate than rival account providers..
It will introduce a new 2% load for European currency and it will double its load for worldwide currency from 1% to 2% (the 1% charge came into force last year). This means £100 of foreign spending actually costs you £102.

Currently, using ATMs in Europe costs nothing. From November, it will cost £1 per cash withdrawal (plus the loading fee).

The charges are part of a general revamp which will see current account customers who pay in at least £750 a month given annual European travel insurance (see the Nationwide revamp MSE News story).

What should Flexaccount customers do?
The solution is simple: anyone who has its debit card purely for taking on holiday needs to ditch and switch. They should then sign up for one of the specialist cheap foreign spending credit cards, which bizarrely will still include Nationwide.
The best is the Halifax Clarity card, which is load-free worldwide, has no ATM fees and charges a low 1%-ish interest per month. Get one only for use abroad, then set up a direct debit to repay in full at the end of the month to minimise interest.
No change to Nationwide credit card
Nationwide's specialist travel credit cards are not changing. They will still be load-free for European travel, with a 1% load for worldwide currency.
On top of this, you'll be charged around 2% per month interest on cash withdrawals even if you repay the card in full, and a 2.5% fee each time you use an ATM (see how this compares in the Cheap Travel Money guide).
Our view
Martin Lewis, MoneySavingExpert.com creator, says: "This is a guillotine through the neck of Nationwide's reputation as a cheap account for overseas spending. Credit card loading is a nasty hidden fee Nationwide has bitched about other banks levying, yet from November, it's doing it too.
"It's not an error by Nationwide, the building society is actually trying to kick nearly a million customers out of the door. That's because out of its 3 million+ account holders, 1.4 million use the debit card overseas and 900,000 of those use the account ONLY for that and nothing else – and that costs. So Nationwide wants them gone to ensure it's focusing on people using their account 'properly', as it sees it."
Chris Rhodes, Nationwide's product and marketing director, says: "The changes are to stop people getting the account just to use overseas. If you bank with Nationwide and support our products we want to give you a reward.
"What I don’t think is right is to cross-subsidise customers who choose to stay with Lloyds, for example, but use us for travel."

[thirdcrank]

Helen

Thanks for going to the trouble to post about this. (I do subscribe to that newsletter myself but I don't read it as closely as I should.) My younger son has been living in Holland but also travels all over and we've used Nationwide quite a bit when he needs a sub from Bank of Dad. It's proved handy to have any account in my name so if there has been a query, I can deal with it here as the main account holder (although that did not work with the Shabby and when there was an attemted fraud on that card - also supposed to be charge free - I ended up arguing with the spaniard that blighted my life.)

[al_yrpal]

There is just one problem with all this, its still cheaper to withdraw money in France using a debit card than it is with a credit card.

On my tour of Brittany recently I was withdrawing cash from ATMs using a Nationwide Flexaccount VISA Debit card. On my return I checked the exchange rate, that card was giving me €1.20 per £.

I was also spending money on my Tesco VISA Credit Card, that only gave me €1.15, ie about 4% less! I Think its VISA who decide the exchange rate, not Tesco.

Even with a 2% charge it would still be advantageous to draw all money with the Nationwide VISA credit card and pay for everything with cash.

I am annoyed that Nationwide have scrapped the free scheme it was a good perk for those who used Flexaccount as their main account. Because I am a type 2 diabetic, I don't think that the free travel insurance will be of any benefit to me.

Al

[hubgearfreak]

have you just cut and paste that from another website?

i'm surely not alone in thinking that's bad form for starting a thread. and for the sake of what, £1 per £100 of spending money when on holiday?

[rualexander]

have you just cut and paste that from another website?

i'm surely not alone in thinking that's bad form for starting a thread. and for the sake of what, £1 per £100 of spending money when on holiday?

I think its fairly common practice to do that, give the link for those who want to go and read the whole original text and also cut and paste the text into the thread for those who won't bother following the link. Nothing 'bad form' about it.

[mr riff raff]

have you just cut and paste that from another website?

i'm surely not alone in thinking that's bad form for starting a thread. and for the sake of what, £1 per £100 of spending money when on holiday?

You didn't have to read it!

[hubgearfreak]

You didn't have to read it!

i didn't

[simonhill]

Thanks Helen, useful info for us who use it a lot. The % rise is a drag, but I was paying 1% anyway, as I use mine in more distant lands. The real hassle is the £1 per withdrawal - this means it gets a bit more expensive if you want to withdraw small amounts eg at the end of a trip.

Hubgear - the Nationwide card has often been recommended on this forum - useful for people who actually tour in foreign lands. It is not unreasonable therefore to inform people of a change. I can only say that I am sorry that my gain has so inconvenienced you that you had to post a negative reply, albeit to an item you said you didn't read.

[jphil]

Thanks a lot Helen as I use that card as my main means of payment/ withdrawing money abroad forget the other miserable buggers who disagree with your posting!

[thirdcrank]

As I have mentioned before, my son in Holland has a Nationwide credit card on an account of which I am the main cardholder, so they will listen to me in the UK if he needs help abroad.

That situation has arisen, so I rang them this evening. After over 10 minutes of jarring music and a frequently repeated mechanical apology the system just cut me off without my ever speaking to a human being. I tried a different option from the menu - applying for a new card and, surprise surprise, an immediate answer. The only explanation I can offer is that this mutual building society is more keen on attracting new business than providing a decent service for existing customers. They are not alone in that, I suppose.

As I posted on another thread - hell will be trying to contact a call centre, for the rest of eternity. Just hope the tune is one you like.