Santander quietly HIKES fee for popular account with 100,000s customers and slashes cashback
BANK BLOW Santander quietly HIKES fee for popular account with 100,000s customers and slashes cashback
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SANTANDER has quietly made changes to a popular credit card, hiking the monthly fee and slashing cashback.
New customers applying for the bank's Edge Credit Card will now face a monthly fee of £4, an increase from the previous £3.
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A customer uses an automated teller machine (ATM) outside a Banco Santander SA bank branch in Barcelona, Spain, on Monday, Jan. 31, 2022. Santander reports full year earnings on February 2. Photographer: Angel Garcia/Bloomberg via Getty Images
Credit: Getty
At the same time, Santander has slashed the maximum cashback customers can earn each month from £15 to £10.
Plus, a major benefit for new customers has been removed - the 2% cashback on all purchases during the first year, which was previously capped at £15 per month.
Existing Santander Edge credit card holders, however, can breathe a sigh of relief – for now.
The bank has confirmed that the £3 monthly fee and £15 monthly cashback cap will remain in place for existing customers.
They will also continue to enjoy 2% cashback on all purchases for the first year, before dropping to 1% cashback thereafter.
That said, the bank hasn't committed to retaining these perks permanently, leaving current customers in limbo about the future.
A Santander spokesperson said: "We regularly review our product offering to reflect wider market conditions, and as part of our refresh of our Santander Edge credit card, we will be giving all eligible customers the opportunity to earn up to £120 cashback per year, without having to be an existing Santander current account holder."
The Santander Edge credit card is now available to new customers aged 18 or over, earning £10,500 or more annually, and residing permanently in the UK.
Previously, applicants were required to hold a Santander current account.
While the changes may seem minor, they could have a significant impact on how new customers benefit from the Santander Edge credit card.
Switch bank accounts for free perks
With perks reduced and fees increased, many will be left wondering whether the card still offers value for money.
If you're looking to maximise your cashback, there are other options available.
In fact, one credit card is currently offering up to 5% cashback on spending.
The fee-free Chase debit card is a standout option, offering 1% cashback on most spending (capped at £15 per month).
While there are some exclusions, it's a straightforward deal, and you only need to pass an ID check to open a new account.
After the first year, you'll need to pay in £1,500 each month to continue earning cashback.
If you're considering a credit card, the American Express Cashback Everyday Credit Card is a great option for those expecting a high-spend period.
It offers an impressive 5% cashback on purchases for the first five months (up to £125).
After this introductory period, you can earn up to 1% cashback, but you'll need to spend over £10,000 annually to qualify for ongoing rewards.
For those who might not meet the £10,000 annual spending threshold, the American Express Cashback Credit Card is another strong choice.
It also offers 5% cashback for the first three months (up to £125), followed by 0.75% cashback on spending up to £10,000 per year and 1.25% above that.
However, this card does come with a £25 annual fee.
If you frequently shop online the Amazon Barclaycard is great for its regular customers.
It offers 1% cashback on Amazon purchases (boosted to 2% during Prime Days and Black Friday) and 0.25% cashback elsewhere (0.5% in the first year).
It also provides an Amazon voucher upon acceptance, usually worth £20.
What is cashback?
CASHBACK is a type of reward offered by banks, credit card providers, and retailers where customers receive a percentage of their spending back as cash.
Essentially, it's a way to earn money while making purchases.
For example, if your card offers 1% cashback and you spend £100, you'll earn £1 back.
Cashback can be credited to your account, deducted from your balance, or saved up for future use, depending on the provider's terms.
It's often offered on everyday purchases, such as groceries, fuel, or online shopping, and may be part of a promotional deal or an ongoing benefit of your account.
However, remember to check the terms and conditions, as some transactions may not qualify for cashback rewards.
By using cashback offers wisely, you can usually make your money go further on purchases you'd already be making.
What else is happening at Santander?
Santander customers have been left outraged after the bank revealed it will start charging £120 a year for an account it promised would be "free forever".
Thousands of small business and self-employed account holders are facing £9.99 monthly charges from October.
This comes despite written assurances that their accounts would always remain free of fees.
The changes will impact three types of business accounts: 1|2|3 Business Current Accounts, Business Everyday Current Accounts, and Business Current Accounts.
The "free forever" promise applied to accounts offered by Abbey and Alliance & Leicester before the 2008 merger with Santander.
The bank first attempted to introduce fees for these accounts in 2012 but backed down after customers threatened legal action.
However, these accounts were shifted to the Business Everyday account in 2015, which did not include the "free forever" promise.
From October 1, these accounts will be closed, and customers will be automatically switched to Santander's new Business Current Account – Classic.
Under the new structure, every Business Current Account – Classic will incur a £9.99 monthly fee, regardless of the type of account customers previously held.
While some accounts were free, others offered additional benefits with charges as high as £40 per month.
The bank is closing its 123 Lite current account, which offers up to 3% cashback on household bills for a £2 monthly fee, on August 21.
Customers affected by the closure will be automatically switched to Santander's Everyday Current Account.
This account has no monthly fee but does not include cashback benefits.
Meanwhile, customers of Lloyds Bank, Halifax and Bank of Scotland will soon lose the ability to deposit their cheques at any of the 11,500 Post Office branches nationwide.
From December 31 this year, Lloyds Banking Group will withdraw this service for all customers.
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