Nationwide is pushing up overseas spending charges for millions of Flexaccount customers.
The changes, which come into force on 1 November 2010, could add £100s in fees for the million-plus customers who use Nationwides Flexaccount for overseas spending.
New overseas spending charges
Foreign currency loading is a hidden fee that Nationwide has always avoided. However, from November, even its decided to add a stealth charge for the million-plus holidaymakers who use it overseas.
It will introduce a new 2% load for European currency and double its load for worldwide currency from 1% to 2%. This means £100 of foreign spending actually costs you £102.
Currently, using ATMs in Europe costs nowt, from November it will cost £1 per cash withdrawal (plus the above loading fee).
Nationwide credit card will stay the same
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.
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 very best of these 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.
Martin Lewis, MoneySavingExpert.com creator, says: "This is a guillotine through the neck of Nationwides reputation as a cheap account for overseas spending. Credit card loading is a nasty hidden fee Nationwide has *****ed about other banks levying, yet from November, it's doing it too.
Its not an error by Nationwide, the building society is actually trying to kick nearly a million customers out of the door. Thats 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 want them gone to ensure its focusing on people using their account properly, as it sees it.
