Nationwide drops free use of debit cards overseas

Nationwide is to increase the cost to customers of using their debit cards abroad.

From 1 November the society will levy a 2 per cent charge on transactions as well as a £1 cash-withdrawal fee when the card is used overseas. This will replace the current 1 per cent currency-conversion charge levied at present.

Nationwide's credit card holders though will be relieved that they will not face a similar increase in charges. The building society is to keep overseas usage charges at 1 per cent on purchases made outside the EU, and free within the EU.

But there is some cheer ahead as Nationwide confirmed plans to offer free travel insurance to customers and their spouses if they use the building society's Flexi account as their main current account. In addition, a host of charges for moving into unauthorised overdrafts will be cut.

"Our new package of benefits offers greater value to more of our current-account customers than before," said Chris Rhodes, Nationwide's executive marketing director.

"The average customer-saving with free card-use abroad was about £12 a year. We're now able to offer those who use us for their day-to-day banking a benefit of much greater value, and one that no other bank account offers – free travel insurance, which would normally cost up to £80."