Card charges when abroad

Using a credit or debit card that loads up ‘hidden’ charges for foreign cash withdrawals could add almost £100 to the cost of your holiday. Almost all the plastic card issuers are in the doghouse over these charges, as most consumers have no idea that they may be charged 5 per cent extra in fees on top of the cash they take out of ATMs.

There are only a handful of credit and debit cards that keep charges to a minimum, and the ones that stand out are issued by Nationwide Building Society and, for the over-50s only, Saga. Nationwide’s debit card is the best piece of plastic to use abroad because it doesn’t charge any fees at all for foreign use. This is only for people who have a Nationwide current account (called Flexaccount).

For non-current account customers the Nationwide credit card, like others, has a cash withdrawal fee (higher of 1.5 per cent or £1.50) for use in ATMs abroad. But it doesn’t charge ‘loading’ fees like other cards – these can add up to 2.75 per cent on top of your cash withdrawal fees (typically 1.5 per cent or 2 per cent, although these charges can go as high as 3 per cent of the transaction).

In the US there may also be local fees charged by the bank whose ATM you are using.

Many travellers get around foreign fees and loading charges by taking out a large wad of cash and then using their plastic cards to pay for outstanding items when they are abroad. Good thinking in many cases but watch out for a few big banks’ debit cards. Natwest/RBS charges 75p every time you use your debit card to buy something abroad, and Halifax/Bank of Scotland takes a ludicrous £1.50 per transaction.

Careful savers should also note the plastic issuers’ cheeky trick of charging full interest on cash withdrawals even when the bill is paid off in full. Saga and Liverpool Victoria don’t do this so are worth looking at for those who don’t carry a balance on their cards.

For a full list of the best buy credit and debit cards, check www.moneysavingexpert.com . This site has extensive listings and tips for saving money on your holiday spending. It calculates that someone using a Natwest debit card to pay for goods and cash withdrawals worth £1,750 in euros would be hit with charges of £84.80. A Nationwide debit card holder would pay nothing.