Santander is axing a popular current account with hundreds of thousands of customers next month
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SANTANDER is axing a popular current account used by hundreds of thousands of customers in August.
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.
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If you're looking to maximise your cashback, there are other options available
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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.
The 123 Lite account has not been available to new customers since 2022, however, hundreds of thousands still rely on the current account.
The 123 Lite account allowed bill payers to earn up to 3% cashback, capped at £15 per month, on expenses like council tax, mobile phone bills, energy, and water.
However, if you still have a 123 Lite account, cashback will stop automatically, and you will no longer need to pay the £2 monthly fee from August 21.
A spokesperson told The Sun: "Following a review of our 123 Lite Current Account, which was last on sale to new customers in November 2022, and to simplify our product range, we have decided that now is the right time to withdraw the account."
If you're looking to keep cashback perks, the Everyday Current Account you'll be switched to won't be suitable, as it doesn't offer any cashback features.
Instead, customers who want to stay with Santander may want to explore the Edge or Edge Up accounts.
The Santander Edge account offers 1% cashback on certain household bills and debit card spending at supermarkets, petrol stations, and on travel.
This account has a £3 monthly fee, with cashback capped at £10 per month.
Switch bank accounts for free perks
For a higher cashback limit, the Santander Edge Up account costs £5 per month and allows you to earn up to £15 per month on both bills and debit card spending.
To keep these accounts active, Edge customers must deposit at least £500 per month, while Edge Up customers need to deposit £1,000.
However, it's important to note that from September 9, cashback on supermarket, fuel, and travel spending will be removed for both accounts.
Customers will only continue to earn 1% cashback on household bills like council tax and utilities.
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.
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 other card providers offer regular cashback?
Several major banks and lenders offer cashback through their current account or credit card products.
Use these cards wisely and you'll end up making your money go further with every purchase.
These cards deduct a percentage of what you've spent from your balance – effectively giving you money back on your spending.
The 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.
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