From 20 April, Barclays customers can opt into a new programme – Blue Rewards – that will pay them fixed cash rewards of up to £15 per month (£180 per year), in return for a monthly fee of £3. Standard current account holders enrolled in the programme receive £7 a month ‘cash back’ as a reward for their custom; mortgage customers enrolled will receive a further £5 per month; customers who take out or renew their home insurance with Barclays receive an extra £3 a month. Cash rewards are paid into a separate digital ‘wallet’, but can be redeemed and transferred into a Barclays account whenever the customer chooses.

As a result, a customer with a Barclays current account, mortgage and home insurance received £180 per year in return for annual membership fees of £36 – resulting in a net cash payment of £144 per year. A spokesperson for the bank has indicated that Barclays will extend the programme to cover other products, such as savings accounts and personal loans.

Reaction to the new product has been mixed. David Mann of uSwitch.com said that the programme “really does appear to leave its customers better off.” However, Mann also noted that Barclays were “missing a trick” by not extending the provision to credit card customers.  “It’s also important to note that customers have to be signed up to either online or mobile banking to benefit – which could see some people miss out.”

Hannah Maundrell of money.co.uk said that the rewards offered by the programme “aren’t quite as saucy as they sound,” reminding Barclays customers they stand to receive £48 cash back a year if they are not a mortgage and/or home insurance customers, as “the tasty £7 monthly ‘loyalty’ payment will be degraded by a chunky £3/month fee.” While believing the bung a “nice perk” if a consumer is already a Barclays customer, Maundrell states that “in reality it’s likely you’ll be able to earn more elsewhere.”

Andrew Hagger of Moneycomms.co.uk said the programme was an indication that “Barclays has realised it needs to be more competitive to maintain its share of the current account market.”

While acknowledging the £4 monthly payment (after fees) was “money for nothing”, Hagger is sceptical of the bank’s reasons for advertising  the £7 reward. “I’m not sure why there’s this give with one hand and take with the other approach…perhaps offering a £4 payment would make it more obvious that it’s less rewarding than the Halifax £5 per month?”

Hagger also warns against holding all one’s financial products (such as mortgages and insurance) with one supplier, as “you could end up paying over the odds by not shopping around.”

Meanwhile, thousands of RBS/Natwest customers were informed this morning that they would incur higher overdraft fees, after being moved to new current accounts without prior warning or consultation. A total of 140,000 customers, in seven separate account types, will be transferred to the bank’s Select Account, which comes with sizeable charges for going overdrawn without authorisation. Natwest customers with Personal Current, Personal Current Plus, Gold Cheque, Gold Plus Private Bank, Private Banking Current and Child & Co Current will all now face a £6 monthly fee, plus interest of 19.89 per cent, if they if they become overdrawn by more than £10.