NatWest’s new credit card offers 1% cashback on overseas spending – is it worth using?

NatWest and Visa launch new credit card to tempt holidaymakers

The NatWest Travel Reward credit card is aimed at customers who travel abroad frequently and will offer rewards on purchases made with the card outside the UK.

You can earn 1 percent cash back in rewards for spending abroad on purchases including air and train tickets, car rentals, ferries, buses, hotel accommodation, travel agencies, cruises, camping and more.

The offer competes with the best cards for spending abroad, which can reduce the cost of holidays.

In the UK, the spending rate on non-travel related purchases is just 0.1 per cent, so it’s unlikely to be worth it for those who only go on holiday once a year.

The card has no foreign transaction fees on purchases abroad, so it can be used for spending without charge.

Earnings are earned in the form of reward points that can be converted into cash or vouchers to spend in stores.

Every time customers spend with the card, they can earn a percentage of rewards which they can then convert into cash or e-codes to use at NatWest partner retailers.

Customers can view the rewards they have earned in the MyRewards section of the NatWest app.

If a customer spent £5,000 on flights, a hotel or car hire for a holiday, they would receive £50 in rewards that could be converted into cash.

The card has no annual fee and a 27.9 percent purchase rate.

Is it better than Starling, Monzo or Chase for holiday spending?

Where NatWest’s travel credit card shines is in its 1 percent rewards earning rate on overseas spending.

Rob Burgess said: ‘The beauty of the NatWest card is that the 1 per cent cashback on travel spending can be combined with the free foreign exchange fees, so not only would you get no exchange fees on your hotel and car hire, if you paid locally for both, but you’d also get the extra 1 per cent.’

Digital banks Monzo, Starling and Chase also offer fee-free spending abroad with perfect exchange rates.

For this reason, they are the first choice for many Britons when they go on holiday.

However, Monzo and Starling do not offer rewards for spending abroad.

Chase offers 1% cashback on spending made with its current account, including spending abroad. Customers must deposit £1,500 per month into their Chase account to qualify for the cashback, which is capped at £15 per month.

Last week, Barclays launched a new credit card in partnership with Amazon. It allows users to earn 1% cashback on all Amazon purchases and 0.5% on non-Amazon purchases for the first six months, then drops to 0.25%.

Other credit cards, such as the Marks & Spencer card, the John Lewis Partnership card or the Sainsbury’s Nectar Mastercard credit card, offer between 0.1 per cent and 0.25 per cent cashback in rewards, so the NatWest card’s accrual rate for UK and non-travel spending doesn’t look very attractive.

Rob Burgess added: “What’s wrong with NatWest’s strategy is the 0.1 per cent return on overall spending. This is fine for overseas spending, but it’s a terrible return on sterling spending.”

‘A card like the Barclaycard Avios Mastercard, which is free and lets you earn one Avios for every £1, should effectively give you back 1 per cent of your UK spend if you use your Avios wisely and in the worst case scenario (converting them to Nectar points) you’d get 0.5 per cent back.’

‘Everyone should have a FX-free card for use outside the UK and as this card is free, it’s as good as any alternative.’

‘The NatWest card is worth it for someone who spends a lot of time abroad, especially someone who stays in fancy hotels where the hotel bill makes up a large percentage of the total cost of their holiday, as you get 1 per cent cashback plus 0 per cent exchange rate, but I would keep it in a drawer when not travelling.’