Nationwide : Holidaymakers Overcharged By £535M This Summer

June 20, 2006

By Peter Kenny

According to the Nationwide Building Society, consumers travelling abroad this year and who use their credit cards will be stung by over £535 million in unnecessary charges.

Nationwide estimates that other credit card providers and banks will make over £535 million on charges for foreign usage during the summer of 2006 alone.

In order to raise the awareness of the UK holidaymaker, Nationwide Building Society has produced a special report highlighting the hidden costs of using a credit card while abroad.

The report is called “Avoiding Financial Pitfalls Abroad” and describes the pitfalls that UK credit card holders face while making purchases out with the UK.

The report shows that other credit card provider’s charge 5.25% for any cash withdrawals made. At the same time anyone making a purchase overseas should expect a surcharge of 2.65 per cent.

The Nationwide Building Society is the only high street financial provider not to charge a foreign currency loading fee for customers using its cards abroad.

Nationwide point out that “Dynamic Currency Conversion” should always be avoided. Dynamic currency conversion can occur when a purchase is made and the retailer converts the purchase price in local currency into UK Sterling at the point of sale.

The disadvantage of this method is the unfavourable exchange rate used. Nationwide encourages their credit card holders to have their purchase made in the local currency. This ensures that they get the best exchange rate and no commission charges.

Stuart Bernau, Nationwide's executive director, said, "Everyone looks forward to their holidays but, amidst all the excitement, nobody wants to find themselves taking unnecessary risks or incurring unnecessary charges.

Quite frankly, some organisations are making excessive profits out of their customers through the cost of foreign currency, travel insurance and - most of all - card use abroad.

To make matters worse, some of these costs are not exactly transparent. At Nationwide we want our customers to enjoy themselves to the full without adding unreasonably to the cost of their holiday."