Nationwide Building Society, serving over 16 million members across the United Kingdom, has issued an essential financial advisory to help customers safeguard their money while travelling overseas. This timely message aims to prevent individuals from incurring avoidable extra charges, offering a straightforward strategy to keep more funds in their accounts.
Understanding Payment Options Abroad
When making card transactions in a foreign country, Nationwide explains that customers are typically presented with two distinct payment methods. The building society clarifies that you will be asked whether you wish to pay in the local foreign currency or in pounds sterling. This choice, while seemingly minor, can have significant financial implications for holidaymakers and business travellers alike.
The Recommended Approach: Pay in Local Currency
Nationwide strongly encourages customers to opt for paying in the foreign currency rather than pounds sterling. The institution elaborates that when you select the local currency option, Visa handles the conversion using their standard exchange rate. Subsequently, Nationwide deducts the equivalent amount in pounds sterling from your account, ensuring transparency and typically better value.
Conversely, if you choose to pay in pounds sterling, the retailer or cash machine owner performs the currency conversion. This method often results in less favourable exchange rates and may include additional hidden charges imposed by the merchant. Nationwide warns that this approach frequently proves more expensive than simply paying in the local currency, potentially costing customers unnecessary extra money on every transaction.
Potential Fees for International Card Use
Nationwide provides important clarification regarding fees associated with using debit and credit cards abroad. The building society notes that some of their cards carry specific charges for transactions made in foreign currencies, whether conducted in person, online, or over the telephone. If applicable to your particular card, these fees will be levied on every foreign currency transaction you make, emphasising the importance of understanding your account terms before travelling.
Cash Withdrawal Considerations
The guidance extends to cash withdrawals, where Nationwide cautions that customers might encounter additional charges from cash machines or banks when obtaining foreign currency abroad. The society advises thorough checking before completing any transaction, highlighting several scenarios where extra fees could apply.
- Withdrawing foreign currency from a cash machine located overseas
- Withdrawing foreign currency from a cash machine within the UK
- Purchasing foreign currency over-the-counter at bureaux de change, banks, or Post Office branches before departure
Nationwide reminds travellers that foreign currency can be obtained over-the-counter at various outlets, including bureaux de change, banks, Post Offices, and non-Nationwide cash machines that dispense foreign currency. However, they issue a crucial warning: the exchange rate applied by your supplier may differ substantially from the Visa exchange rate for that day, and they should clearly advise you of the rate used.
Identifying Fee-Free Cash Machines
The building society offers specific advice regarding UK-based cash machines that dispense foreign currency. If the machine displays the LINK logo, your transaction will be processed as a pounds sterling cash transaction. This classification means you won't need to pay a non-sterling transaction fee, providing a potential saving opportunity for savvy customers.
Conversely, Nationwide concludes with a warning about UK-based cash machines that do not display the LINK logo. In these instances, the transaction will be treated as if the cash machine were located outside the UK. This means Nationwide receives the non-sterling amount of the foreign transaction, along with its pounds sterling equivalent as converted by your cash machine provider. Consequently, you will need to pay the non-sterling transaction fee applicable to your account, underscoring the importance of careful machine selection before withdrawing funds.
