Nationwide fights for fair card fines

NATIONWIDE is to scrap its £12 charge for credit card customers who break through their agreed spending limit and is also campaigning for rivals to follow suit.

Britain’s biggest building society will drop the charge from Friday as part of a review of the way it treats customers. And in a further move it will no longer apply interest to cardholders who buy goods on a 0 pc balance transfer card.

Normally, when you spend on a credit card, as long as you pay the balance in full at the end of the month you won’t incur interest.

But if you have spent on a card on which you have previously arranged a balance transfer, you will pay interest on your spending. This is because the customer is judged not to have paid off their balance in full because they have the outstanding debt still sitting on their card.

It is a catch in the small print of these deals that is estimated to cost customers £110 million a year.

Nationwide has scrapped this condition, so a customer who spends on a credit card that has a balance transfer debt on it will not pay any interest if they pay off that spending in full at the end of the month.

Chris Rhodes, executive director for Nationwide group retail, says: ‘We’ve removed the fee in recognition that people do — unintentionally — exceed their limit from time to time.

‘And we’ve seen that credit card borrowers benefit from balance transfer offers but many also want to use the card for everyday spending. Historically, experts warn against this as they may end up being charged if they don’t pay the total balance off. We don’t think that’s fair, so we’ve changed it.’

This is not the first time the building society has campaigned for credit card changes to benefit customers. In 2011, it campaigned for the introduction of the rule which now means the most expensive debts on a credit card are paid off first.