Norwich and Peterborough Building Society (N&P) has revamped its Gold Account to make it the cheapest for spending overseas.

The account, available online and in branches, gives customers fee-free overseas debit card transactions.

The bank says this could save customers almost 12 on the cost of each 250 withdrawal in foreign currency compared to other providers (see Cheap Travel Money).

N&P previously charged a typical 2.75% commission on foreign transaction plus 2 per cash withdrawal and 1.25 per purchase.

The card is the only fee-free mass market debit card to use abroad.

Our top pick holiday spending plastic is the Halifax Clarity credit card which has no fees on foreign transactions. The only charge is a fairly low 12.9% interest on cash withdrawals, which works out at around 1 per month for every 100 withdrawn.

Research from independent price comparison website uSwitch showed that 400 million was charged in fees and charges for overseas debit card usage in 2009.

What are the catches?

Customers must either pay in 500 a month or make five transactions a month.

If you can deposit the required monthly sum, you should apply for the Gold Classic version of the account.

If you can only commit to making five transactions, you should opt for the Gold Light account.

On either account, if you fail to meet these requirements, there is a 5 per month fee.

There is also a 5 per month fee if you slip more than 10 into your overdraft, and a 19 monthly fee for unauthorised overdraft use over 10. This is in addition to 17.9% interest.

Dan Plant, money analyst, says: "Provided you beat the fees, this is a big boost for travellers looking for a card to use abroad.

"However, to avoid fees you must be an active user, so this isn't right for someone who wants a card to spend on once a year, then tuck away until next summer."

Further reading/Key links

Get cheap currency:, Cheap Travel Money