Nationwide have announced plans to introduce foreign transaction fees on their Visa credit and debit cards.
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Nationwide - Gold Visa
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What's the issue?
Until recently Nationwide credit and debit cards have been a favourite with seasoned travellers who valued their fee-free approach to foreign transactions.
This feature helped Nationwide's offering stand out from the competition, the vast majority of which apply a fee for all purchases made overseas. However, this week Nationwide announced plans to charge for non-sterling foreign transactions made on Visa credit and debit cards.
Consequently as of 6th May, 2009, for credit cards, and 1st June, 2009, for debit cards, a 0.84% foreign transaction fee will come into force, bumping up the cost of spending overseas.
It is also important to note that this foreign transaction fee is set to increase to 1% on 1st July, 2009.
However, despite this increase, the 1% foreign transaction fee still provides a more economical alternative for spending overseas than many other credit cards which on average* levy a charge of 2.1%.
Nationwide FlexAccount customers who hold a Mastercard cash card are still exempt from this fee. However, Nationwide are in the process of reviewing charges on all their accounts so this may change in the future.
*based on a comparison against 80 other credit cards which charge a Foreign Transaction Fee as a percentage of the amount spent.
What should I do?
This really depends on whether you plan to venture overseas any time soon as this new change does not affect the UK usage of your Nationwide Visa credit or debit card.
If you are planning to take a trip abroad after 6th May (for Nationwide credit card holders) or 1st June (for Nationwide debit card holders) and were intending to take advantage of the foreign transaction fee waiver you should first check the A-Z fee list available on Nationwide's website as this details all the countries where the fee will apply.
If a charge applies to your intended destination it may then be worth thinking about applying for an alternative card that offers fee-free foreign spending before you travel.
What's the alternative?
The Post Office Credit Card is the only card to currently offer commission fee purchases worldwide. However, it does levy a 2.5% charge on cash withdrawals so this is something to bear in mind.
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