Avoid Financial Pitfalls Abroad
Avoiding Financial Pitfalls Abroad
Summary • Avoid paying extra on overseas transactions this summer by packing a debit or credit card that doesn’t charge for foreign usage. • When using a card abroad be aware of Dynamic Currency Conversion and the countries in which it operates. To avoid being caught out by this so-called service consumers should opt to pay for purchases in the local currency of the country they are visiting. • When buying foreign currency, avoid paying extra by shopping around for the best exchange rate and by using a commission-free travel money service. • Always arrange for adequate insurance cover when travelling abroad by taking out good value insurance that meets all travel needs.
Key Facts: (research findings) In 2005: - Britons made over 65 million trips abroad spending more than £30 billion*; - the number of plastic card transactions made by British cardholders overseas accounted for more than £20.5 billion of overall spending**; - consumers were charged an estimated £515 million in foreign currency loading fees. This is expected to rise to over £535 million in 2006.*** Recent research**** carried out by Nationwide revealed: - 57% of holidaymakers use local currency for holiday spending. 8% use a credit card and 7% use a debit card. 5% use travellers cheques while 23% use a variety of payment methods; - Up to three quarters of Britons travelled abroad for their last holiday with Spain being the most popular destination; - One in four UK holidaymakers spent over £1,000 while on their last holiday. * ** *** ****
Source: www.statistics.gov.uk Provided by APACS See page 3 for calculation Source: Consumer Confidence Index (21/02/06 – 19/03/06)
Introduction Each year thousands of British holidaymakers head abroad to experience the colourful cultures and often sunnier climates of foreign shores. We can expect this summer to be no different and Nationwide is urging anyone planning on travelling abroad to consider very carefully the various options available for their travel money. While browsing the internet can save pounds on the cost of a holiday, so can choosing the right way to spend while overseas or taking out good value travel insurance. Nationwide research shows that one in four UK holidaymakers will spend over £1,000 while on holiday. If people want to make savings, or are hoping for a little bit extra to spend while away, Nationwide recommends that they: 1. pack a debit and credit card that offers free card use abroad; 2. look for a provider that can offer a commission free travel money service; and 3. familiarise themselves with Dynamic Currency Conversion and pack a handy Nationwide guide card which is available in branches. As part of an awareness campaign, Nationwide Building Society is urging consumers to avoid unnecessary bank charges while abroad. People often go on holiday with little or no knowledge of additional costs they will face on transactions from retailers and, more importantly, their card provider. In 2005, UK holidaymakers were charged an estimated £515 million in foreign usage fees by their credit or debit card provider. We forecast that this will rise to over £535 million in 2006. These charges could have been easily avoided by packing a card that offers free card use abroad. At Nationwide, we want our customers to feel confident when using their cards abroad and customers that hold a credit or debit card with Nationwide can take advantage of our policy not to charge foreign usage fees. Holidaymakers travelling abroad should also be careful not to overlook the importance of travel insurance and always ensure that they take out adequate cover to meet their travel needs. Neglecting to take out adequate insurance can result in huge medical bills and financial loss should anything go wrong while away. Before taking out insurance it is worth shopping around for a policy that provides both comprehensive cover and value for money.
Stuart Bernau Executive Director Nationwide Building Society
The cost to consumers Nationwide is urging holidaymakers to avoid paying extra on overseas card transactions. Whether handing over a payment card to a shop assistant or in a restaurant, or withdrawing money from an ATM, the likelihood is the card provider will be charging the cardholder for the service by way of a foreign currency loading fee and additional charges. These charges can quickly add up and many consumers will only become aware of them after close examination of their statement. In 2005, over £20.5 billion was spent on debit and credit cards overseas.* If all these purchases were charged a foreign currency loading fee of 2.75% (the typical rate charged by providers), with the exception of those carried out using Nationwide’s cards which charge no additional fees, then around £515 million would have been lost to card providers at the expense of the consumer. Nationwide predicts that this figure will rise to over £535 million in 2006. Recent Nationwide research found that one in four UK holidaymakers spent over £1,000 while on their last holiday. These holidaymakers could have each saved up to £81 in foreign usage fees (see table) by using a card offering free use while abroad. Nationwide is the only high street financial provider not to charge a foreign currency loading fee for customers using its cards abroad – although the usual cash advance fee applies to customers using a credit card to withdraw currency. Other card providers often charge up to 5.25% for withdrawing cash and a minimum of 2.65% for conducting purchases overseas. Holidaymakers can find out if they are paying unnecessary charges when spending abroad by checking the reverse of their statement and terms and conditions or by using the Summary Boxes in credit card leaflets. Among the fees and charges that these boxes clearly display are foreign currency loading fees. Consumers are therefore able to make direct comparisons between different providers and make an informed choice as to which card best suits their holiday spending. * Provided by APACS
Debit card charges for overseas use Cost of various purchases totalling £1,000 and two £100 cash withdrawals with a debit card overseas NBS current account debit card
Nationwide
NatWest
HSBC
Lloyds TSB
Barclays
Halifax
ATM charges
Free
2.25% (£4.00 max) + 2.65%
1.5% (min £1.75) + 2.75%
1.5% (min £2.00, max £4.50) + 2.75%
1.5% (min £1.50, max £4.50) 2.75% +
£1.50 + 2.75%
Retail purchases
Free
2.65% + 75p
2.75%
2.75% + £1.00
2.75%
2.75% + £1.50
£100 ATM withdrawal
Free
£4.90
£4.50
£4.75
£4.25
£4.25
£100 ATM withdrawal
Free
£4.90
£4.50
£4.75
£4.25
£4.25
New clothes (£50)1
Free
£2.83
£1.38
£3.38
£1.38
£4.38
Train tickets (£150)
Free
£7.73
£4.13
£9.13
£4.13
£11.63
Restaurant (£120)
Free
£9.18
£3.30
£11.30
£3.30
£15.30
Food shopping (£100)1
Free
£10.15
£2.75
£12.75
£2.75
£17.75
General travel (£400)
Free
£13.60
£11.00
£15.00
£11.00
£17.00
Other (£180)
Free
£5.52
£4.95
£5.95
£4.95
£6.45
Total Cost
Free
£58.80
£36.50
£67.00
£36.00
£81.00
1
1
1
1
Source: Moneyfacts NB: NatWest charge customers 75p per retail transaction, Lloyds TSB charges £1 per retail transaction and Halifax charges £1.50 per transaction. These charges are in addition to the foreign currency loading fees. current account debit card illustration: £1,000 purchases 2 X £25 new clothes 5 X £30 train tickets 8 X £15 restaurant 10 X £10 food shopping 4 X £100 general travel 1 X £180 other expenses 1
Credit card charges for overseas use Cost of £1,000 worth of purchases and two £100 cash withdrawals with a classic credit card Nationwide
NatWest
HSBC
Lloyds TSB
Barclays
Halifax
ATM charges
2.00% 2.0% (£2.00 min) (£2.50 min) + 2.75%
2.0% (£2.00 min) + 2.75%
2.0% (£2.50 min) + 2.75%
2.5% (£2.50 min) + 2.75%
2.5% (£2.00 min) + 2.75%
Foreign currency loading fee
Free
2.75%
2.75%
2.75%
2.75%
£100 ATM withdrawal
£2.00
£5.25
£4.75
£5.25
£5.25
£5.25
£100 ATM withdrawal
£2.00
£5.25
£4.75
£5.25
£5.25
£5.25
£1,000 retail spend
Free
£27.50
£27.50
£27.50
£27.50
£27.50
Total Cost
£4.00
£38.00
£37.00
£38.00
£38.00
£38.00
2.75%
Source: Moneyfacts
Recent Holiday Destination “Where did you go for your last holiday?”
UK & Ireland The Algarve
25% 0%
South of France
3%
Italy Greek Islands
2% 4%
Balearics/Spain Europe (elsewhere) Caribbean
13% 17% 2%
USA/Canada
7%
Australia/New Zealand
3%
Africa
3%
Far East Other
5% 1% DK = 7%
Never been on holiday = 6%
Source: CCI - 21st February 2006 - 19th March 2006 Base: All Respondents 1000 Capped Weighting to Nationally Representative Sample
Why should consumers use a card abroad? Using a card is an easy and convenient way for people to spend when abroad. It avoids the hassle of exchanging money prior to travelling or exchanging travellers cheques while on holiday. Furthermore, only a small amount of cash is ever required to be carried on your person at any one time. Currently, 8% of holidaymakers use credit cards abroad and 7% use debit cards, while 23% use a combination of cards, currency and travellers cheques.* With more than 24 million VISA outlets across the globe (including shops, restaurants, hotels and car hire companies) and 24 hour access to over 855,000 VISA ATMs worldwide, cardholders have easy access to their money at all times. Therefore, whether in New York or Nairobi cardholders can be confident that they will never be far from their money. To find out where the cash machines are that accept debit or credit cards, consumers can check online at: • www.visa.com and click on ‘Find a cash machine’; or • www.mastercard.com and click on ‘ATM locator’. Holidaymakers can further benefit from free purchase protection when taking their credit card abroad. Many card providers now offer this, providing cover against loss, theft and accidental damage for purchases not already covered by any other insurance. * Source: Consumer Confidence Index (21/02/06 – 19/03/06)
Recent Holiday Spending “Whilst on that holiday, approximately how much did you spend excluding the cost of the holiday?”
Less than £100
7%
£100 - £249
16%
£250 - £499
24%
£500 - £749
15%
£750 - £999
7%
£1000 or more Source: CCI - 21st February 2006 - 19th March 2006 Base: All Respondents have been on holiday (883) Capped Weighting to Nationally Representative Sample
22% DK/R = 9%
Dynamic Currency Conversion Dynamic Currency Conversion (DCC) is an optional ‘service’ provided by individual retailers or at ATMs and can result in consumers paying extra on their purchases. It is prevalent in Spain, Italy, Germany, France and USA and is often operated in restaurants, shops, car rental companies and hotels. Nationwide estimates that in July 2005 alone UK holidaymakers were charged almost £5 million by retailers using DCC overseas. DCC should be performed with the cardholder’s consent and allows UK cardholders the option to pay in either the currency of the country they are visiting or pounds sterling. If the cardholder opts to pay in sterling the payment will be converted from the local currency to sterling by the retailer or bank who will apply their own conversion fee. If a customer chooses local currency, such as Euros, VISA will handle the conversion. VISA guidelines state that UK cardholders should be verbally informed of the payment choice available and this should be followed by a statement on the signature slip illustrating the choice the cardholder has made. Nationwide is the only high street financial organisation and the only debit card provider that does not charge any fees for card use abroad. Therefore, Nationwide customers should always opt for the local currency of the country they are visiting. For cardholders who bank elsewhere it may be less expensive for them to pay in sterling. They will therefore need to know what their bank charges for foreign usage, find out the VISA rate for that day and compare this to the sterling rate being offered by the retailer. On 1 February 2006, Nationwide launched a guide card containing helpful hints to raise awareness about DCC. These have been made available in branches and are included with travel insurance documents.
Dynamic Currency Conversion Fact Card
If you wish to make a request to pay in local currency whilst on holiday, please use the phrase below.
Nationwide does not charge you commission on any purchases or cash withdrawals that you make abroad on your Nationwide credit* or debit card. When making purchases overseas, you should always be offered a choice of paying in sterling or the retailer’s local currency. We recommend that you always opt to pay for purchases in the local currency.
Spain - Puedo pagar con divisa local, por favor. France - Je voudrais payer en devises du pays, s’il vous plaît.
This ensures that you get the best exchange rate and no commission charges. *Nationwide charges a cash advance fee of 2% (min £2.00) for making cash withdrawals on your credit card.
P9176 (May 2006)
Italy - Vorrei pagare con la valuta locale, por favore.
Travel Money Research from Nationwide shows that 57% of holidaymakers use local currency for holiday spending.* For those people who want to also take cash or travellers cheques away with them, Nationwide advises that they: 1. check the exchange rate to determine how much currency they will get for their money; and 2. avoid paying extra by shopping around for a commission free travel money service. Many companies charge commission or a flat fee of between £1.25 and £3.00 to change money into foreign currency. This can be expensive when changing large amounts. Nationwide offers a commission free travel money service allowing customers to order between £50 and £2,000 in cash or travellers cheques. Customers can get an instant quote and use a credit or debit card to purchase their travel money. For a small charge the customer’s travel money is delivered to their home by special delivery. Although cash is the most convenient option for taking money abroad it is the least secure. Holidaymakers packing cash should not take more than the amount covered under their travel insurance policy. * Source: Consumer Confidence Index (21/02/06 – 19/03/06)
Recent Holiday Spending (Payment Method) “What method of payment did you use for your holiday spending?”
1%
Local Currency Travellers Cheques
23%
Debit Card
8%
57%
7% 5%
Credit Card
Combination Other
Source: CCI - 21st February 2006 - 19th March 2006 Base: All Respondents have been on holiday (806) Capped Weighting to Nationally Representative Sample
DK/R = 0%
Travel insurance – do you know the facts?
• 1 in 7 people travel with little or no insurance • 5% of holidaymakers make a claim on their insurances • 34% of the number of claims are related to medical insurance
Over recent years the way travellers book their holidays has changed. More and more holidaymakers are organising their trips without seeing a travel agent. The increased availability of cheap flights and the use of the internet to book accommodation has meant that 23.6 million holidays booked in 2005 had independently booked elements compared to 20.1 million packaged holidays*. This has impacted on the opportunities travel agents have to sell their travel insurance to their clients, which means travellers will need to make their own arrangements – and many do not. If consumers are booking their holiday independently, or through a travel agent, it is important they take out travel insurance and shop around for a good deal. Travel insurance is not compulsory which is why 13% of travellers ventured abroad in the last 12 months without arranging the necessary cover*. This equates to around 3 million adults putting themselves at risk from incredibly high medical expenses or simply suffering financial loss if the holiday has to end abruptly or is cancelled. If a holidaymaker in Europe breaks an arm they could pay out around £5,000 in medical costs. Even if people are jetting off on a short city break travel insurance is just as important. If they need an air ambulance to transport them back from their break in New York it could cost up to a staggering £45,000. Figures show that only 76% of travellers in the 16-24 age group are likely to arrange cover, compared to 93% of those aged between 55-64*. It is clear something needs to be done to promote the benefits of travel insurance so more and more people, especially the younger generations, arrange cover before leaving home. Nationwide travel insurance offers comprehensive cover backed by quality service at very competitive prices. Annual and single trip policies are available to all holidaymakers for travel within the UK, Europe and further afield. Nationwide is one of the few providers to offer travel insurance for people aged 65 and over and also offers a great deal for families as kids go free. For those planning a more active holiday, cover for winter sports, golf and other sports can be included at low prices.
* Source: Mintel, Travel Insurance UK February 2006
For further information: Roy Beale 01793 655689 [email protected] Steve Blore 01793 655199 [email protected]
Nationwide Building Society Head Office, Nationwide House, Pipers Way, Swindon, SN38 1NW Nationwide is a registered trademark of Nationwide Building Society © Nationwide Building Society
(May 2006)
Summary • Avoid paying extra on overseas transactions this summer by packing a debit or credit card that doesn’t charge for foreign usage. • When using a card abroad be aware of Dynamic Currency Conversion and the countries in which it operates. To avoid being caught out by this so-called service consumers should opt to pay for purchases in the local currency of the country they are visiting. • When buying foreign currency, avoid paying extra by shopping around for the best exchange rate and by using a commission-free travel money service. • Always arrange for adequate insurance cover when travelling abroad by taking out good value insurance that meets all travel needs.
Key Facts: (research findings) In 2005: - Britons made over 65 million trips abroad spending more than £30 billion*; - the number of plastic card transactions made by British cardholders overseas accounted for more than £20.5 billion of overall spending**; - consumers were charged an estimated £515 million in foreign currency loading fees. This is expected to rise to over £535 million in 2006.*** Recent research**** carried out by Nationwide revealed: - 57% of holidaymakers use local currency for holiday spending. 8% use a credit card and 7% use a debit card. 5% use travellers cheques while 23% use a variety of payment methods; - Up to three quarters of Britons travelled abroad for their last holiday with Spain being the most popular destination; - One in four UK holidaymakers spent over £1,000 while on their last holiday. * ** *** ****
Source: www.statistics.gov.uk Provided by APACS See page 3 for calculation Source: Consumer Confidence Index (21/02/06 – 19/03/06)
Introduction Each year thousands of British holidaymakers head abroad to experience the colourful cultures and often sunnier climates of foreign shores. We can expect this summer to be no different and Nationwide is urging anyone planning on travelling abroad to consider very carefully the various options available for their travel money. While browsing the internet can save pounds on the cost of a holiday, so can choosing the right way to spend while overseas or taking out good value travel insurance. Nationwide research shows that one in four UK holidaymakers will spend over £1,000 while on holiday. If people want to make savings, or are hoping for a little bit extra to spend while away, Nationwide recommends that they: 1. pack a debit and credit card that offers free card use abroad; 2. look for a provider that can offer a commission free travel money service; and 3. familiarise themselves with Dynamic Currency Conversion and pack a handy Nationwide guide card which is available in branches. As part of an awareness campaign, Nationwide Building Society is urging consumers to avoid unnecessary bank charges while abroad. People often go on holiday with little or no knowledge of additional costs they will face on transactions from retailers and, more importantly, their card provider. In 2005, UK holidaymakers were charged an estimated £515 million in foreign usage fees by their credit or debit card provider. We forecast that this will rise to over £535 million in 2006. These charges could have been easily avoided by packing a card that offers free card use abroad. At Nationwide, we want our customers to feel confident when using their cards abroad and customers that hold a credit or debit card with Nationwide can take advantage of our policy not to charge foreign usage fees. Holidaymakers travelling abroad should also be careful not to overlook the importance of travel insurance and always ensure that they take out adequate cover to meet their travel needs. Neglecting to take out adequate insurance can result in huge medical bills and financial loss should anything go wrong while away. Before taking out insurance it is worth shopping around for a policy that provides both comprehensive cover and value for money.
Stuart Bernau Executive Director Nationwide Building Society
The cost to consumers Nationwide is urging holidaymakers to avoid paying extra on overseas card transactions. Whether handing over a payment card to a shop assistant or in a restaurant, or withdrawing money from an ATM, the likelihood is the card provider will be charging the cardholder for the service by way of a foreign currency loading fee and additional charges. These charges can quickly add up and many consumers will only become aware of them after close examination of their statement. In 2005, over £20.5 billion was spent on debit and credit cards overseas.* If all these purchases were charged a foreign currency loading fee of 2.75% (the typical rate charged by providers), with the exception of those carried out using Nationwide’s cards which charge no additional fees, then around £515 million would have been lost to card providers at the expense of the consumer. Nationwide predicts that this figure will rise to over £535 million in 2006. Recent Nationwide research found that one in four UK holidaymakers spent over £1,000 while on their last holiday. These holidaymakers could have each saved up to £81 in foreign usage fees (see table) by using a card offering free use while abroad. Nationwide is the only high street financial provider not to charge a foreign currency loading fee for customers using its cards abroad – although the usual cash advance fee applies to customers using a credit card to withdraw currency. Other card providers often charge up to 5.25% for withdrawing cash and a minimum of 2.65% for conducting purchases overseas. Holidaymakers can find out if they are paying unnecessary charges when spending abroad by checking the reverse of their statement and terms and conditions or by using the Summary Boxes in credit card leaflets. Among the fees and charges that these boxes clearly display are foreign currency loading fees. Consumers are therefore able to make direct comparisons between different providers and make an informed choice as to which card best suits their holiday spending. * Provided by APACS
Debit card charges for overseas use Cost of various purchases totalling £1,000 and two £100 cash withdrawals with a debit card overseas NBS current account debit card
Nationwide
NatWest
HSBC
Lloyds TSB
Barclays
Halifax
ATM charges
Free
2.25% (£4.00 max) + 2.65%
1.5% (min £1.75) + 2.75%
1.5% (min £2.00, max £4.50) + 2.75%
1.5% (min £1.50, max £4.50) 2.75% +
£1.50 + 2.75%
Retail purchases
Free
2.65% + 75p
2.75%
2.75% + £1.00
2.75%
2.75% + £1.50
£100 ATM withdrawal
Free
£4.90
£4.50
£4.75
£4.25
£4.25
£100 ATM withdrawal
Free
£4.90
£4.50
£4.75
£4.25
£4.25
New clothes (£50)1
Free
£2.83
£1.38
£3.38
£1.38
£4.38
Train tickets (£150)
Free
£7.73
£4.13
£9.13
£4.13
£11.63
Restaurant (£120)
Free
£9.18
£3.30
£11.30
£3.30
£15.30
Food shopping (£100)1
Free
£10.15
£2.75
£12.75
£2.75
£17.75
General travel (£400)
Free
£13.60
£11.00
£15.00
£11.00
£17.00
Other (£180)
Free
£5.52
£4.95
£5.95
£4.95
£6.45
Total Cost
Free
£58.80
£36.50
£67.00
£36.00
£81.00
1
1
1
1
Source: Moneyfacts NB: NatWest charge customers 75p per retail transaction, Lloyds TSB charges £1 per retail transaction and Halifax charges £1.50 per transaction. These charges are in addition to the foreign currency loading fees. current account debit card illustration: £1,000 purchases 2 X £25 new clothes 5 X £30 train tickets 8 X £15 restaurant 10 X £10 food shopping 4 X £100 general travel 1 X £180 other expenses 1
Credit card charges for overseas use Cost of £1,000 worth of purchases and two £100 cash withdrawals with a classic credit card Nationwide
NatWest
HSBC
Lloyds TSB
Barclays
Halifax
ATM charges
2.00% 2.0% (£2.00 min) (£2.50 min) + 2.75%
2.0% (£2.00 min) + 2.75%
2.0% (£2.50 min) + 2.75%
2.5% (£2.50 min) + 2.75%
2.5% (£2.00 min) + 2.75%
Foreign currency loading fee
Free
2.75%
2.75%
2.75%
2.75%
£100 ATM withdrawal
£2.00
£5.25
£4.75
£5.25
£5.25
£5.25
£100 ATM withdrawal
£2.00
£5.25
£4.75
£5.25
£5.25
£5.25
£1,000 retail spend
Free
£27.50
£27.50
£27.50
£27.50
£27.50
Total Cost
£4.00
£38.00
£37.00
£38.00
£38.00
£38.00
2.75%
Source: Moneyfacts
Recent Holiday Destination “Where did you go for your last holiday?”
UK & Ireland The Algarve
25% 0%
South of France
3%
Italy Greek Islands
2% 4%
Balearics/Spain Europe (elsewhere) Caribbean
13% 17% 2%
USA/Canada
7%
Australia/New Zealand
3%
Africa
3%
Far East Other
5% 1% DK = 7%
Never been on holiday = 6%
Source: CCI - 21st February 2006 - 19th March 2006 Base: All Respondents 1000 Capped Weighting to Nationally Representative Sample
Why should consumers use a card abroad? Using a card is an easy and convenient way for people to spend when abroad. It avoids the hassle of exchanging money prior to travelling or exchanging travellers cheques while on holiday. Furthermore, only a small amount of cash is ever required to be carried on your person at any one time. Currently, 8% of holidaymakers use credit cards abroad and 7% use debit cards, while 23% use a combination of cards, currency and travellers cheques.* With more than 24 million VISA outlets across the globe (including shops, restaurants, hotels and car hire companies) and 24 hour access to over 855,000 VISA ATMs worldwide, cardholders have easy access to their money at all times. Therefore, whether in New York or Nairobi cardholders can be confident that they will never be far from their money. To find out where the cash machines are that accept debit or credit cards, consumers can check online at: • www.visa.com and click on ‘Find a cash machine’; or • www.mastercard.com and click on ‘ATM locator’. Holidaymakers can further benefit from free purchase protection when taking their credit card abroad. Many card providers now offer this, providing cover against loss, theft and accidental damage for purchases not already covered by any other insurance. * Source: Consumer Confidence Index (21/02/06 – 19/03/06)
Recent Holiday Spending “Whilst on that holiday, approximately how much did you spend excluding the cost of the holiday?”
Less than £100
7%
£100 - £249
16%
£250 - £499
24%
£500 - £749
15%
£750 - £999
7%
£1000 or more Source: CCI - 21st February 2006 - 19th March 2006 Base: All Respondents have been on holiday (883) Capped Weighting to Nationally Representative Sample
22% DK/R = 9%
Dynamic Currency Conversion Dynamic Currency Conversion (DCC) is an optional ‘service’ provided by individual retailers or at ATMs and can result in consumers paying extra on their purchases. It is prevalent in Spain, Italy, Germany, France and USA and is often operated in restaurants, shops, car rental companies and hotels. Nationwide estimates that in July 2005 alone UK holidaymakers were charged almost £5 million by retailers using DCC overseas. DCC should be performed with the cardholder’s consent and allows UK cardholders the option to pay in either the currency of the country they are visiting or pounds sterling. If the cardholder opts to pay in sterling the payment will be converted from the local currency to sterling by the retailer or bank who will apply their own conversion fee. If a customer chooses local currency, such as Euros, VISA will handle the conversion. VISA guidelines state that UK cardholders should be verbally informed of the payment choice available and this should be followed by a statement on the signature slip illustrating the choice the cardholder has made. Nationwide is the only high street financial organisation and the only debit card provider that does not charge any fees for card use abroad. Therefore, Nationwide customers should always opt for the local currency of the country they are visiting. For cardholders who bank elsewhere it may be less expensive for them to pay in sterling. They will therefore need to know what their bank charges for foreign usage, find out the VISA rate for that day and compare this to the sterling rate being offered by the retailer. On 1 February 2006, Nationwide launched a guide card containing helpful hints to raise awareness about DCC. These have been made available in branches and are included with travel insurance documents.
Dynamic Currency Conversion Fact Card
If you wish to make a request to pay in local currency whilst on holiday, please use the phrase below.
Nationwide does not charge you commission on any purchases or cash withdrawals that you make abroad on your Nationwide credit* or debit card. When making purchases overseas, you should always be offered a choice of paying in sterling or the retailer’s local currency. We recommend that you always opt to pay for purchases in the local currency.
Spain - Puedo pagar con divisa local, por favor. France - Je voudrais payer en devises du pays, s’il vous plaît.
This ensures that you get the best exchange rate and no commission charges. *Nationwide charges a cash advance fee of 2% (min £2.00) for making cash withdrawals on your credit card.
P9176 (May 2006)
Italy - Vorrei pagare con la valuta locale, por favore.
Travel Money Research from Nationwide shows that 57% of holidaymakers use local currency for holiday spending.* For those people who want to also take cash or travellers cheques away with them, Nationwide advises that they: 1. check the exchange rate to determine how much currency they will get for their money; and 2. avoid paying extra by shopping around for a commission free travel money service. Many companies charge commission or a flat fee of between £1.25 and £3.00 to change money into foreign currency. This can be expensive when changing large amounts. Nationwide offers a commission free travel money service allowing customers to order between £50 and £2,000 in cash or travellers cheques. Customers can get an instant quote and use a credit or debit card to purchase their travel money. For a small charge the customer’s travel money is delivered to their home by special delivery. Although cash is the most convenient option for taking money abroad it is the least secure. Holidaymakers packing cash should not take more than the amount covered under their travel insurance policy. * Source: Consumer Confidence Index (21/02/06 – 19/03/06)
Recent Holiday Spending (Payment Method) “What method of payment did you use for your holiday spending?”
1%
Local Currency Travellers Cheques
23%
Debit Card
8%
57%
7% 5%
Credit Card
Combination Other
Source: CCI - 21st February 2006 - 19th March 2006 Base: All Respondents have been on holiday (806) Capped Weighting to Nationally Representative Sample
DK/R = 0%
Travel insurance – do you know the facts?
• 1 in 7 people travel with little or no insurance • 5% of holidaymakers make a claim on their insurances • 34% of the number of claims are related to medical insurance
Over recent years the way travellers book their holidays has changed. More and more holidaymakers are organising their trips without seeing a travel agent. The increased availability of cheap flights and the use of the internet to book accommodation has meant that 23.6 million holidays booked in 2005 had independently booked elements compared to 20.1 million packaged holidays*. This has impacted on the opportunities travel agents have to sell their travel insurance to their clients, which means travellers will need to make their own arrangements – and many do not. If consumers are booking their holiday independently, or through a travel agent, it is important they take out travel insurance and shop around for a good deal. Travel insurance is not compulsory which is why 13% of travellers ventured abroad in the last 12 months without arranging the necessary cover*. This equates to around 3 million adults putting themselves at risk from incredibly high medical expenses or simply suffering financial loss if the holiday has to end abruptly or is cancelled. If a holidaymaker in Europe breaks an arm they could pay out around £5,000 in medical costs. Even if people are jetting off on a short city break travel insurance is just as important. If they need an air ambulance to transport them back from their break in New York it could cost up to a staggering £45,000. Figures show that only 76% of travellers in the 16-24 age group are likely to arrange cover, compared to 93% of those aged between 55-64*. It is clear something needs to be done to promote the benefits of travel insurance so more and more people, especially the younger generations, arrange cover before leaving home. Nationwide travel insurance offers comprehensive cover backed by quality service at very competitive prices. Annual and single trip policies are available to all holidaymakers for travel within the UK, Europe and further afield. Nationwide is one of the few providers to offer travel insurance for people aged 65 and over and also offers a great deal for families as kids go free. For those planning a more active holiday, cover for winter sports, golf and other sports can be included at low prices.
* Source: Mintel, Travel Insurance UK February 2006
For further information: Roy Beale 01793 655689 [email protected] Steve Blore 01793 655199 [email protected]
Nationwide Building Society Head Office, Nationwide House, Pipers Way, Swindon, SN38 1NW Nationwide is a registered trademark of Nationwide Building Society © Nationwide Building Society
(May 2006)
