Santander caps cashback for existing 123 credit card customers: is it time to switch?

Written by: Paloma Kubiak
Existing Santander 123 credit card customers will see a cashback cap come into effect from February, so is it still worth using or are there better products available?

Towards the end of 2015, Santander announced it would increase the monthly charge on its 123 credit card due to rising costs and low interest rates.

The move saw the fee increased from £2 a month (£24 a year) to £3 a month (£36) with effect from January 2016 for all customers.

It also said the cashback provisions would remain for a period of time for existing customers but would be capped for new users.

Customers who took out a Santander credit card before 16 September 2015 were entitled to 1% cashback on supermarket spends (no cashback limit), 2% in department stores (no cashback limit) and 3% on petrol, national rail and TfL spends (max. £9 per month).

For those who took out the product from 16 September 2015, the cashback was capped to £3/month for each of the supermarket, department store and travel spends.

But from 1 February 2017, existing Santander 123 credit card customers (pre-16 September 2015 sign-ups) will now see the cashback rates aligned with newer users.

This means the maximum cashback you’ll be able to earn across the range is £9 per month but as there’s a £3 per month fee, the real figure is £6 a month in cashback:

  • 1% cashback at all major supermarkets (on spend of up to £300 per month)
  • 2% cashback at all major department stores (on spend of up to £150 per month)
  • 3% cashback at all major petrol stations and on National Rail and Transport for London (TfL) travel (on combined spend of up to £100 per month).

Is it still worth it?

Andrew Hagger of Moneycomms said the credit card rewards market is a shadow of its former self, with deals being watered down or axed completely following the introduction of the new EU interchange fee arrangements just over a year ago.

“I would say one of the best cards out there at the moment is the Cashback Plus Card from Asda Money – but you’d really need to be an Asda shopper for your food and or petrol to make it work.

“As with Santander it charges a £3 per month fee but it offers 2% cashback on Asda shopping and fuel plus a generous 1% elsewhere but unlike Santander the amount you can earn each month is not capped.”

Hagger explains that if you spend £400 per month on food and £100 on petrol both at Asda, plus £300 of purchases elsewhere you would earn £13, less the £3 fee so £10 per month net.

“It only really stacks up for Asda customers. It’s the same with M&S, John Lewis, Tesco and Sainsbury’s credit cards – the reward rates in store are good but away from the store, they’re very low,” he said.

Hannah Maundrell, editor in chief of, said if you’ve been using the Santander 123 card for all your day-to-day spending, it’s worth looking at switching to the Amex Platinum Everyday card or even getting a current account that pays cashback which might be a better option and earn you more money. See’s Your savings game plan for 2017.

Away from the upcoming cashback changes, Maundrell warned that the Santander 123 credit card standard interest rate will also go up from 12.7% to 15.9%: “So if you don’t pay your credit card bill off in full every month this second sting in the tail means you’ll also pay more in interest on your outstanding credit card balance.

“The card is, by way of conciliation, extending its 0% foreign transaction fees indefinitely,” she added.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co... Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
UK’s mini living standards boom ends

Fast-rising inflation has put an end to the UK's mini boom in living standards, according to the Resolution Foundation.