The Philosopher

Chillier winds are starting to blow through holiday hot spots.

The same can also be said about the charges being levied on UK card holders using their debit cards abroad.

In a couple of months' time, the Nationwide building society is to withdraw its popular commission-free service, and charge a fee when its debit card is used abroad.

Most other current account debit cards now rack up charges each time we buy something or withdraw currency - up to £4 for every £100 spent.

And that is on top of the exchange costs and any additional fees.

Lower charge

The terms of the Nationwide Flexaccount are now being changed to reward loyal customers at the expense of those who have just opened an account to get the overseas benefits.

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"Our charge of 2% is the lowest charge in the market on a mass-market current account”
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Nationwide spokesman
There will be some free travel insurance, but commission-free withdrawals abroad are to go.

The result is that many say they will ditch their Nationwide Flexaccounts, even though the building society insists that after the changes its fees will still be lower than those of most competitors.

"Many competitors charge a higher level of 2.75%," says the Nationwide.

"Our charge of 2% is the lowest charge in the market on a mass-market current account.

"That means when a customer spends £1,000 abroad, they will be charged at least £15 less than those with other providers," it adds.

The changes

For years the Nationwide debit card has been the card holidaymakers have been advised to use. Many people got a card purely for this purpose.

Using cards abroad has costs which simply have to be paid, says Sandra Quinn Currently anyone using the building society's debit card in Europe does not have to pay a charge, though they do pay a fee of 1% outside the eurozone.

From 1 November, Nationwide will levy a 2% charge on transactions.

That is a foreign exchange fee that you will pay whenever you use your card, whether you are buying something or taking money out of cash machine.

It will also also levy a £1 cash-withdrawal fee when the card is used overseas. This will replace the current 1% currency-conversion charge levied at present.

This does not apply to the society's credit card holders.

Nationwide is keeping its overseas usage charges at 1% on purchases made outside the EU, and free within the EU.

'Subsidy'

The UK Cards Association, which represents card issuers, says Britons have tripled their use of cards abroad in the last decade.

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It may be that you are not paying your bank for the service, but they are definitely paying fees to somebody ”
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Sandra Quinn

UK Cards Association
Last year, Britons spent about £12.5bn on debit cards outside the UK, and a slightly larger amount (£12.8bn) on credit cards.

Sandra Quinn of the association says it is simply a commercial decision by banks as to which charges they should absorb, and which they decide to pass on.

"If you use your debit card in an ATM overseas, that foreign cash machine owner is definitely charging your bank for the transaction," Sandra Quinn says.

"Now it may be that you are not paying your bank for the service, but they are definitely paying fees to somebody - they have to subsidise the use from some other part of their business."

Alternatives

Seasoned card-watchers like David Black, a banking specialist with analysts Defaqto, have spotted that there are a few cheaper debit card alternatives out there.

Fees for some cards abroad can be disproportionate to the cash involved, warns James Daley of Which? "Metro Bank, which has just launched, doesn't charge any fees for overseas use of its debit card, but you have to visit a branch to open an account, and it is only based in London at the moment," says Mr Black.

"Beyond that, if you have a mortgage or investment with Santander, you can open a Zero current account which again doesn't levy any charges for use of its debit card overseas."

Some consumers travelling abroad for work or business may find credit cards or pre-loaded foreign currency cards may offer better value for making purchases abroad.

However, the Consumer Magazine Which? has detected a general trend towards both higher and hidden charges, which the banks are increasingly relying on as a source of revenue.

James Daley, editor of Money Which?, says that such fees have gradually crept up in the past 10 or 15 years and are now being used to bolster bank profits

"What's difficult for consumers is that the fees are not visible on statements," warns Mr Daley.

"There is an initial fee which may be worked into the exchange rate, then transaction fees which do appear on your statement, but you can be paying £20 or £30 more for a short trip abroad, just to get hold of your money.

"These fees just often aren't proportional," he says.

With consumer pressure on the banks at home, they may collectively feel that its easier to levy higher charges abroad.

It remains to be seen if large numbers of savvy customers cotton on, and choose to move to providers offering a better deal to overseas travellers who want cheaper access to their own money.

A Scotsman an Englishman and a Pakistani turn up together at the maternity hospital to pick up their new born babies. On arrival a rather sheepish Doctor gets them to one side and explains that there has been an Admin cock up and they cannot be sure which baby belongs to which father.

The Englishman goes in first to collect his baby and comes out carrying an unmistakably Pakistani infant.

The Pakistani protests asking him what he is doing. The Englishman replies.

“Listen mate there’s a 50% chance that one of the kids left in there is a Jock and I’m not taking any chances”

Top ten best jokes judged at the Edinburgh Festival Fringe
1) Tim Vine - "I've just been on a once-in-a-lifetime holiday. I'll tell you what, never again."
2) David Gibson - "I'm currently dating a couple of anorexics. Two birds, one stone."
3) Emo Philips - "I picked up a hitchhiker. You've got to when you hit them."
4) Jack Whitehall - "I bought one of those anti-bullying wristbands when they first came out. I say 'bought', I actually stole it off a short, fat ginger kid."
5) Gary Delaney - "As a kid I was made to walk the plank. We couldn't afford a dog."
6) John Bishop - "Being an England supporter is like being the over-optimistic parents of the fat kid on sports day."
7) Bo Burnham - "What do you call a kid with no arms and an eyepatch? Names."
8) Gary Delaney - "Dave drowned. So at the funeral we got him a wreath in the shape of a lifebelt. Well, it's what he would have wanted."
9) Robert White - "For Vanessa Feltz, life is like a box of chocolates: empty."
10) Gareth Richards - "Wooden spoons are great. You can either use them to prepare food, or, if you can't be bothered with that, just write a number on one and walk into a pub…"


And the worst…
Sara Pascoe - "Why did the chicken commit suicide? To get to the other side."
Sean Hughes - "You know city-centre beat officers... Well are they police who rap?"
John Luke Roberts - "I made a Battenberg where the two colours ran alongside each other. I called it apartheid sponge."
Emo Philips - "I like to play chess with bald men in the park although it's hard to find 32 of them."
Bec Hill - "Some of my best friends are vegan. They were going to come today but they didn't have the energy to climb up the stairs."
Dan Antopolski - "How many Spaniards does it take to change a lightbulb? Juan."
Doc Brown - "I was born into the music industry. My dad worked in Our Price."