Ask Sindie: 'I pay through the nose to use my card abroad'

Your money problems solved

My new job requires me to travel regularly to offices in Strasbourg and Paris, but I've begun to notice hefty fees cropping up on my NatWest debit card.

Q. My new job requires me to travel regularly to offices in Strasbourg and Paris, but I've begun to notice hefty fees cropping up on my NatWest debit card.

Last month, I spent the equivalent of £320 in euros on the card (including a £50 withdrawal from a cash machine). Back home, I worked out that doing so had cost me £10.

Given the amount of time I'm now on the Continent, I don't want to spend such a sum every time I go shopping.

Am I being had? I'm told a Nationwide building society account lets customers pull money from a hole in the wall, and buy goods over the counter, free of charge.

However, I only recently switched current account to NatWest and really don't want to go through all the upheaval again. Is it possible to run two accounts at the same time?
OP, west London

A. Many of us now use our plastic overseas - whether paying for gifts in stores or pulling money from an ATM - without realising exactly how pricey it can be.

UK cardholders spent £20bn on debit and credit cards abroad in 2004, generating £500m in fees for lenders, according to recent research from Nationwide.

And with an average overseas transaction value of £75, the building society says, UK consumers are paying £2 or more each time they use their card abroad.

Nearly all lenders levy charges to recoup the cost of letting you spend money in a foreign currency - whether with a credit or debit card.

Regardless of whether you're paying for services such as a meal in a restaurant or taking cash from an ATM, there is usually a foreign currency exchange "loading" fee - in your case, a charge for translating your pounds into euros. This is typically 2.65 to 2.75 per cent of the cost of your goods or meal.

If you're withdrawing cash from an ATM, there is a "cash handling" fee to pay on top of the currency loading - usually between 1.5 and 2.25 per cent of the sum taken out.

As you've found out, paying these costs every time you make a transaction on a trip to the Continent can add up. But these fees vary from lender to lender, as each uses different ways to claw back their expenses.

For example, when using an ATM in France, your NatWest debit card has a currency loading fee of 2.65 per cent - slightly lower than the 2.75 per cent at rivals HSBC, Lloyds TSB and Barclays.

However, its extra cash handling charge is 2.25 per cent, compared with 1.5 per cent at these three competitors.

But before you vow to cut up the card, it's worth noting that NatWest caps this handling charge at £4, regardless of the size of the withdrawal. By contrast, there is no maximum limit at HSBC and a minimum £1.75 handling charge.

Your NatWest debit card does carry another cost, though. When buying in stores, you'll have to pay 75p each time you hand over your plastic, compared to no extra cost at the other three banks.

(Count yourself lucky you don't carry a Halifax current account card: it levies £1.50 on top of the foreign currency exchange fee each time you make an overseas purchase on its debit card.)

Given all this complexity, your best bet is to open a Nationwide FlexAccount and use its plastic overseas.

Nationwide is the only lender whose debit card levies neither currency loading nor handling charges at an ATM or in stores. Even its credit card carries only a handling fee.

The building society has turned these fees into something of a campaigning issue. In particular, it argues that in most western European countries, the foreign currency loading fee represents profiteering at the expense of customers; lenders are more than covering their costs.

Jennifer Williams, a Nationwide spokeswoman, says that in your case there would be no problem if you were to open a current account with the building society. You would not have to switch your salary or other direct debit payments to the Nationwide in order to do so.

"As long as any customer passes the credit check and puts the money in the account, then they can open and use a second current account," Ms Williams adds.

Once it's been opened, you can transfer funds from either your NatWest current account or any other savings account and head overseas.

If you need help from our consumer champion, write to Sindie at The Independent on Sunday, Independent House, 191 Marsh Wall, London E14 9RS or email sindie@independent.co.uk. We cannot return documents, give personal replies or guarantee to answer letters. We accept no legal responsibility for advice given.