You are here: Home - Credit Cards & Loans - News -

Shopping without the perks: cashback credit card offers culled

0
Written by: Paloma Kubiak
24/04/2018
Gone are the days of generous cashback credit card and reward offerings as research reveals providers have scaled back their perks.

Shoppers have benefited from getting a little back on their everyday spending with the help of certain credit cards.

But, now it seems that consumers are getting much less back when spending on plastic.

In some cases, 0.50% is the most cashback shoppers will get as standard without paying a fee. This equates to just 50p per £100 spent.

Points and reward cards have also been scaled back in recent years, according to data site, Moneyfacts which means loyalty doesn’t seem to be paying off.

For instance, Debenhams and House of Fraser pay three points for every £1 spent in store, but elsewhere customers receive one point on every £2 spend. Therefore, customers would need to spend £1,000 to qualify for 500 points to get a miserly £5 voucher.

One reason suggested for the disappearance of perks is due to the shake-up of the credit card market in 2015 when the EU interchange fee cap ruling was implemented.

At its core, the fee cap was to save consumers money by limiting the transaction fee for using their card. But as a consequence, providers have limited their reward offerings.

Rachel Springall, finance expert at Moneyfacts, said: “The EU interchange fee cap ruling was supposed to set a positive change in the credit card market in motion, but it has been a bit of a double-edged sword. Card providers have been pulling back their generosity for offering rewards or cashback to recoup costs, so now there are very few deals around.

“Some good changes have been introduced since January 2018; the ban on online surcharges when using a credit card or debit card means, for example, the removal of what would have been a 2% fee to book a flight. However, this ban may inflate the cost of a holiday overall, as companies will need to recoup this loss.”

Springall added that if consumers are using a credit card to earn some rewards or cashback, then they should ensure they repay their balance each month to avoid incurring interest.

She said: “One free way for shoppers to build up points to spend in their favourite stores would be to sign up for a loyalty points card. It is worth the effort to sign up for these cards, particularly for stores or coffee shops they visit frequently. If customers don’t like the idea of holding multiple cards, then they could download the Stocard app – it’s completely free and can easily be scanned at the point of purchase.

“Clearly, consumers need to keep their eyes peeled for any new offers, and be quick if they want to take advantage of rewards and cashback.”

Top cashback credit cards and points cards

Below are Moneyfacts’ top picks for cashback credit cards and points cards:

cashbackPerks

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.

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

Low-income pensioner? You could gain £3k top-up

Hundreds of thousands of retirees struggling with a low income are missing out on Pension Credit worth £3,300...

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.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week