Tandem Bank unveils £6 monthly charge on its cashback credit card
The digital challenger launched its cashback credit card in February 2018, offering a generous 0.5% cashback on both UK and overseas spends, plus no foreign transaction fees.
Customers received an email today inviting them to sign up to a new membership scheme, launching on 9 March. If they opt out, their cards will stop working.
For £5.99 a month, customers will benefit from 0.5% cashback and no foreign transaction fees. They will also have access to the Tandem Instant Access Savings Account, which pays a market-leading 1.5% AER.
Credit card customers who open the savings account before 9 March will receive a rate of 0.5% before it increases to 1.5%. There’s no minimum deposit, but the maximum amount you can save is £250,000.
The new membership scheme will run on a trial basis for existing customers and could be rolled out to new customers at a later date.
Tandem Bank took its popular cashback credit card off the market last month as it looked to finalise details of its new paid for membership scheme.
Tandem co-founder and CEO Ricky Knox, said “We want to continue to offer products and services that make a real difference to our customers, but we also need that offer to be sustainable. That’s why we’re taking the opportunity to test a membership model that preserves all of the benefits of the cashback card and more.”
How good is the Tandem Bank membership?
Andrew Hagger, personal finance expert of Moneycomms, said: “I’m not sure how many people will be keen to pay £5.99 per month for this – you can get 1.35% on instant access savings with Ford Money and Marcus, you can get a Halifax clarity card with no fees abroad or maybe a Starling Bank debit card without a monthly fee.
“It would take a £1,200 monthly spend just to cover the account fee based on the 0.5% cashback rate.
“The Santander all in one credit card offers 26 months at 0% on purchases plus 0.5% cashback for a monthly fee of just £3. Or the Amex everyday platinum cashback card has no fee but pays 0.5% on the first £5,000 spend per year and 1% after that.
“It’s a strange combination of offers mixing savings and credit within the same package. I’m not convinced that it’s that appealing.”