Running a French Holiday Gite in Rural Brittany

Wednesday, April 29, 2009

Nationwide drops its no fee policy for overseas card transactions

I've written a few times about different aspects of Banking in France, like the shock of having to pay bank account charges in France, using Moneybookers to transfer money to my French bank account and trying to work out whether it's cheaper to use paypal or visa to pay an overseas bill.

I haven't blogged though about my other favourite French Financial trick, my Nationwide FlexAccount debit card.

When we were over in France at Easter I realised that we were imminently going to run out of oil in the central heating tank and despite having used Moneybookers to transfer over a load of money before the holiday, I could see we weren't going to have enough Euros to pay to fill the tank up.

So all I did was to go to the nearest cash dispenser (which happens to be in the pretty floral town of La Cheze, just 2 miles from the Gite), and withdraw a few hundred Euros, then pay the withdrawn cash into my French bank account at the post office (which seems to involve an awful lot of form filling in for what is a simple task, but that's French bureaucracy for you!)

With pretty much any other bank or building society you'd be slapped with an overseas card handling charge for withdrawing cash from a UK bank account whilst overseas. And heaven help you if you make a cash withdrawal with a UK credit card because as well as the overseas handling fee you'll get charged a cash withdrawal fee and interest from the day you take the cash out.

Fortunately up until now Nationwide with its 'proud to be different' motto has absorbed any charges that the overseas bank or Visa may have levied and all you pay is the transaction amount converted to Sterling - and the conversion rate is usually pretty good as well - certainly much better than you would get if you went to a travel agent. So the Nationwide FlexAccount debit card has been long recommended by financial websites for overseas spending.

But all that's changing and from the 6th May 2009 Nationwide will start passing on the Visa overseas transaction fees it pays, at the rate of 0.84%, but rising to 1% in July 2009.

There are some exceptions though, and the first and most important is that for European card transactions there's no change - whether you withdraw cash in a Spanish ATM or pay for a romantic hotel booking in Italy with your FlexAccount card you still don't pay any additional fee. And so of course for me therefore there's no charge for French cash dispenser withdrawals (phew).

Secondly, if you have a Nationwide cash card (not debit card) then there's also no overseas charge as these cards are issued by MasterCard, but don't hold your breath as it's likely that these will also start incurring a fee soon as well.

There's more details of the overseas fee and precisely which countries Visa (and hence Nationwide) charge an overseas transaction fee on the Nationwide website along with more general advice about using your Nationwide card abroad.

All is not lost however and despite these fees for non-European withdrawals the Nationwide card still comes out significantly cheaper than many of the rival banking providers. There's further details and a comparison of overseas ATM withdrawal costs on the Lovemoney (ex Motley Fool) website.



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