Norwich & Peterborough Building Society (N&P) has announced it will scrap foreign exchange fees on its debit cards from January 2011, when it re-structures its Gold Current Account.
Existing N&P customers with Gold Current Accounts will see this convert into one of two new types of account at the beginning of next year, depending on how they have used it up until then.
Those who pay in more than £500 a month to their account will automatically have a Gold Classic account opened for them, while people who use theirs only occasionally or do not make this minimum deposit will end up with a Gold Light Account. Crucially, neither of the debit cards that comes with these accounts will levy extra charges for overseas spending or for overseas cash withdrawals.
Fee-free debit card spending overseas
This is great news for consumers, particularly in light of Nationwide’s decision to end fee-free spending on its debit cards – a policy that came into force on 1 November.
The FlexAccount debit card had been the last one offering free overseas spending, with 0% fees limited to transactions within Europe. Most debit card providers charge hefty foreign exchange fees when customers purchase goods and services abroad, or withdraw cash from ATMs in other countries. These charges, and their potential impact on your holiday budget, are explained in the Which? Travel money guide.
If nothing in the current account market changes between now and January next year, Norwich & Peterborough’s current account debit card will be the best option for anyone who makes regular trips abroad. Both existing N&P customers, and new customers who open accounts with the mutual in January, will benefit from 0% foreign exchange fees on debit card spending and no charges for withdrawing cash.
N&P customers with Gold Current Accounts should already have received notification from the building society of what is to happen to their current account in the New Year. Information about the changes is also available on the Norwich & Peterborough website.
Overdrafts and monthly charges on N&P current accounts
It’s important to note that customers with N&P’s Gold Classic Account and Gold Light Account will need to watch out for the monthly fees that might affect them.
Arranged overdrafts with N&P cost £5 a month, while drifting into the red accidentally could cost you significantly more. Unarranged overdraft usage costs £19 per month, while N&P’s fees for paid and unpaid items will cost £15 each from January (down from £23 and £29.50 respectively).
Customers with Gold Classic Accounts will be subject to monthly fees of £5 if they fail to deposit at least £500. This means you’ll need to pay your salary, or a regular lump sum or direct debit, into this account to ensure it stays free.
Meanwhile customers with the Gold Light Account will need to use their account for at least five transactions per month, or else a £5 fee will be charged. Eligible transactions include card payments, standing orders, direct debits, cash deposits and withdrawals. This restriction is designed to ensure N&P customers do not open Gold Light Accounts simply to leave them dormant and unused until they go on holiday – a problem Nationwide is said to have experienced with some FlexAccount customers.
For more information on getting a great deal on holiday cash, read the Which? Travel money advice guide. Anyone on the hunt for affordable travel insurance should also check out our expert Travel insurance review, which reveals which policies our researchers rate.
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