Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Life Sciences Biotech Smaller Cap High Risk Stocks Investing Binge - 24th Jun 21
Central Banks to Keep Buying Gold - 24th Jun 21
Will Gold Survive Hawkish Fed? - 24th Jun 21
The Clean Energy Compound That Could Change The World - 24th Jun 21
Everybody's Getting Rich (and Having Fun) Except Me - 24th Jun 21
WESTERN DIGITAL WDC Stock Trend Analysis - CHIA! - Risk 1 - 23rd Jun 21
AMC Is the Best-Performing Stock in America: Don’t Buy It - 23rd Jun 21
Stock Market Calling the Fed‘s Bluff - 23rd Jun 21
Could Bitcoin Price CRASH Target A Bottom Below $7500? - 23rd Jun 21
Bitcoin and cryptos: Your 'long-term investment'? - 23rd Jun 21
Unlocking The Next Stage Of The Hydrogen Boom - 23rd Jun 21
USDT Ponzi Scheme FINAL WARNING To EXIT Before Tether Collapses Crypto Exchange Markets - 22nd Jun 21
Stock Market Correction Starting - 22nd Jun 21
This Green SuperFuel Could Change Everything For the $14 Trillion Shipping Industry - 22nd Jun 21
Virgin Media Fibre Broadband Installation - What to Expect, Quality of Wiring, Service etc. - 21st Jun 21
Feel the Inflationary Heartbeat - 21st Jun 21
The Green Superfuel That Could Disrupt Global Energy Markers - 21st Jun 21
How Binance SCAMs Crypto Traders with UP DOWN Coins, Futures, Options and Leverage - Don't Get Bogdanoffed! - 20th Jun 21
Smart Money Accumulating Physical Silver Ahead Of New Basel III Regulations And Price Explosion To $44 - 20th Jun 21
Rambling Fed Triggers Gold/Silver Correction: Are Investors Being Duped? - 20th Jun 21
Gold: The Fed Wreaked Havoc on the Precious Metals - 20th Jun 21
Investing in the Tulip Crypto Mania 2021 - 19th Jun 21
Here’s Why Historic US Housing Market Boom Can Continue - 19th Jun 21
Cryptos: What the "Bizarre" World of Non-Fungible Tokens May Be Signaling - 19th Jun 21
Hyperinflationary Expectations: Reflections on Cryptocurrency and the Markets - 19th Jun 21
Gold Prices Investors beat Central Banks and Jewelry, as having the most Impact - 18th Jun 21
Has the Dust Settled After Fed Day? Not Just Yet - 18th Jun 21
Gold Asks: Will the Economic Boom Continue? - 18th Jun 21
STABLE COINS PONZI Crypto SCAM WARNING! Iron Titan CRASH to ZERO! Exit USDT While You Can! - 18th Jun 21
FOMC Surprise Takeaways - 18th Jun 21
Youtube Upload Stuck at 0% QUICK FIXES Solutions Tutorial - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations Video - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations and Trend Analysis into Market Correction - 17th Jun 21
Stocks, Gold, Silver Markets Inflation Tipping Point - 17th Jun 21
Letting Yourself Relax with Activities That You Might Not Have Considered - 17th Jun 21
RAMPANT MONEY PRINTING INFLATION BIG PICTURE! - 16th Jun 21
The Federal Reserve and Inflation - 16th Jun 21
Inflation Soars 5%! Will Gold Skyrocket? - 16th Jun 21
Stock Market Sentiment Speaks: Inflation Is For Fools - 16th Jun 21
Four News Events That Could Drive Gold Bullion Demand - 16th Jun 21
5 ways that crypto is changing the face of online casinos - 16th Jun 21
Transitory Inflation Debate - 15th Jun 21
USDX: The Cleanest Shirt Among the Dirty Laundry - 15th Jun 21
Inflation and Stock Market SPX Record Highs. PPI, FOMC Meeting in Focus - 15th Jun 21
Stock Market SPX 4310 Right Around the Corner! - 15th Jun 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Don't Get Burnt with Unnecessary Foreign Credit Card Usage Fees this Summer

Personal_Finance / Credit Cards & Scoring Jul 12, 2007 - 09:16 AM GMT

By: Nationwide

Personal_Finance Nationwide reveals holidaymaker's lost £326 million last year : With summer holidays around the corner, millions of holidaymaker's are planning to travel abroad. Despite shopping for the best holiday deal, many people overlook the foreign usage charges imposed by their card provider. Nationwide estimates that travelers wasted over £326 million* in unnecessary foreign loading fees on their credit card whilst abroad last year. The Society therefore urges consumers to pay as much attention when selecting the card they take abroad, as they do in choosing the perfect holiday destination.


Some organisation's have actually increased their foreign usage charges this year to further benefit from their customers’ holiday spending. For example, Lloyds TSB have just announced it is increasing the charge on its debit card from 2.75% to 2.99% and Halifax is reported to be increasing the charge on its credit card from 2.75% to 2.95%**. Nat West has increased the charges on its debit card from 2.65% to 2.75% every time a purchase or withdrawal is made overseas and has increased its flat purchase fee from 75p to £1.25. Consumers should take a good look at the deal their bank is offering when traveling abroad and if necessary vote with their feet by moving to a card that doesn’t penalise them whilst they are on holiday.

Amongst the issues facing travellers are:

Foreign Loading Fees

Most lenders charge a loading fee of around 2.75% when spending abroad and most levy a flat fee each time a debit card is used as well. For example, Halifax charge £1.50 for every purchase on top of the 2.75% foreign loading fee on their debit cards. Nationwide is the only high street financial provider to offer free use abroad for all of its customers, saving them millions of pounds each year.***

Dynamic Currency Conversion

When abroad the Society recommends that holidaymakers should be aware that the rate of exchange offered by the retailer may not be as competitive as waiting for their provider to make the conversion, in order to get the best exchange rate and no commission charges.# Nationwide estimates that last year its customers wasted over £850,000## by choosing to pay in sterling on their credit card whilst abroad. The Society therefore advises all of its customers to always pay in the local currency.

Jeremy Wood, divisional director at Nationwide, said: “People who are planning to go abroad over the next few months should be aware of the hidden charges that most card providers impose which are both costly and unnecessary. Anyone using a Nationwide debit card or credit card will not be charged any foreign usage fees and will therefore have a little more money to help them enjoy their holiday.”

For further information:
Rachel Shephard, press officer, telephone: 01793 657225
Steve Blore, senior manager, telephone: 01793 655199

Notes :
Nationwide does not levy any foreign usage charges on its debit or credit card, but it is important to note that anyone using their credit card to withdraw money from an ATM at home or abroad will be charged a cash advance fee.

* £326 million estimate for money wasted in unnecessary foreign loading based on:

  • UK credit card issuers processed £12.3 billion worth of overseas transactions in 2006. (source: APACS).
  • Nationwide transactions represented £439 million of this overseas spend.
  • Assuming an average 2.75% loading fee, total loading fees applied on other issuers overseas spend (£12,300 million - £439 million = £11,861 million) was £326.2 million (2.75% * £11,861 million = £326.2 million).

** Source of Halifax Data – Daily Mail, 11 July 2007. Date of new rates to be confirmed.

*** Last summer, Nationwide credit card customers alone were around £3.4 million better off for choosing one its cards over another provider.

Nationwide customer saving of £3.4 million based on:

  • Nationwide customers spent £122 million on foreign currency transactions last summer (June 06 – August 06).
  • Nationwide do not apply a foreign loading on these transactions. Typical loading applied by UK financial institutions is 2.75%.
  • Saving to Nationwide customers is £3.4 million (2.75% * £122 million = £3.4 million).

#DCC

  • Cardholders who bank elsewhere face a complicated scenario. For certain transactions it may be less expensive for them to pay in sterling. They would have to know what their bank charges for foreign usage and currency conversion. In addition, they would have to find out the VISA rate for that day and compare this to the sterling rate being offered by the retailer.
  • If the cardholder opts to pay in sterling the payment will be converted from the local currency to sterling. Payment in sterling prevents Nationwide from handling the currency conversion via VISA on our customer’s behalf. For regulatory and anti-competitive reasons VISA is unable to prevent the operation of DCC by retailers or ATM providers but has introduced rules to govern it. Prior to the transaction, a shop or restaurant offering the service should verbally inform the cardholder of the payment choice available, but language barriers will often prevent this. This should be followed by a statement on the signature slip illustrating the choice the cardholder has made.
  • Nationwide can only state the VISA positioning as we do not issue Mastercard branded Debit or Credit Cards.

## £850,000 wasted by choosing to pay in sterling based on:

  • Volume of Nationwide credit card holder transactions performed overseas in Pound Sterling was over £31 million in 2006.
  • Nationwide believes the exchange rates used by merchants offering to convert local currencies into Pound Sterling will represent worse value than the 2.75% loading applied by other card issuers. 2.75% of £31 million worth of transactions equates to £852,500.

Cost of various purchases with a debit card overseas-Assuming all ATM transactions and purchases are single transactions.

Debit Cards Nationwide NatWest HSBC ***** Lloyds TSB (from 30/07/2007) Barclays Halifax
ATM charges Free 2.75% + 2.00% (min £2, max £5) 2.75% + 1.5% (min £1.75) 2.99% + 1.5% (min £2.00, max £4.50) 2.75% + 2% (min £1.50, max £4.50) 2.75% + £1.50
Retail purchases Free 2.75% + £1.25 2.75% 2.99% + £1 2.75% 2.75% + £1.50
£100 ATM withdrawals Free £4.75 £4.50 £4.99 £4.75 £4.25
New clothes (£50)**** Free £2.63 £1.38 £2.50 £1.38 £2.88
Train tickets (£150) **** Free £5.38 £4.13 £5.49 £4.13 £5.63
Restaurant (£120) **** Free £4.55 £3.30 £4.59 £3.30 £4.80
Food shopping (£100) **** Free £4.00 £2.75 £3.99 £2.75 £4.25
General travel (£400) **** Free £12.25 £11.00 £12.96 £11.00 £12.50
Other (£180) **** Free £6.20 £4.95 £6.38 £4.95 £6.45
Total Free £39.76 £32.01 £40.90 £32.26 £40.76

**** NatWest charge customers £1.25 per retail transaction, Lloyds TSB charges £1 per transaction and Halifax charges £1.50 per transaction. These charges are in addition to the foreign currency loading fees.

***** On HSBC’s Bank Account Plus and Premier Accounts the 1.5% (min £1.75) for cash transactions is not charged.

Source of Competitor Data – Moneyfacts.co.uk - the money search engine 10 July 2007.
Source of Calculations – Nationwide, 12 July 2007.

Cost of purchases with a classic credit card overseas-Assuming all ATM transactions and purchases are single transactions.

Credit Cards Nationwide NatWest HSBC Lloyds TSB Barclaycard Halifax**
ATM charges 2% (£2 min) 2.75% + 2.5% (£2.50 min) 2.75% + 2.5% (£2.50 min) 2.75% + 2.5% (£2.50 min) 2.75% + 2.5% (£2.50 min) 2.95% + 3% (£3 min) date of new rates to be confirmed
Retail foreign currency loading fee Free 2.75% 2.75% 2.75% 2.75% 2.95%
£100 ATM withdrawal £2.00 £5.25 £5.25 £5.25 £5.25 £5.95
£1,000 retail spend Free £27.50 £27.50 £27.50 £27.50 £29.50
Total £2.00 £32.75 £32.75 £32.75 £32.75 £35.45

Source of Competitor Data (except Halifax) – Moneyfacts.co.uk – the money search engine 10 July 2007.
Source of Calculations – Nationwide, 12 July 2007.
**Source of Halifax Data – Daily Mail, 11 July 2007. Date of new rates to be confirmed.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in