How to cut the cost of holiday spending
Posted on May 28th, 2011
Customers will benefit from a fairer exchange rate when using RBS and NatWest credit cards abroad.
There was an outcry when it emerged that RBS was using its own exchange rate, which could add an extra 2% to the cost of overseas transactions.
From July 1, the bank will base its rates on standard Visa and MasterCard exchange rates, which offer a better deal.
Tesco bowed to similar pressure at the end of January.
It was clear from feedback that customers wanted a more standardised approach to how exchange rates are calculated and one that was easier for them to understand. As a result, we are changing the system, says an RBS spokesman.
However, RBS and NatWest credit cards are still expensive to use abroad because, in common with most other cards, they add a loading to the Visa and MasterCard rates.
Some pre-paid cards that do not charge fees, such as Caxton FX and Travelex, offer a cheap way to spend or withdraw money abroad. These cards can be bought online and loaded with money before you leave.
The cheapest credit cards are Halifax Clarity and Santander Zero, which also have no additional fees for cash withdrawals or purchases.
The best debit card to use abroad is Norwich Peterborough BS, which has no fees. The Nationwide debit card charges 1 for withdrawing cash abroad and a 2% commission charge. It has a 2% commission charge on purchases.
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