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Barclays slashes current account cashback

Emma Lunn
Written By:
Emma Lunn

The bank is overhauling its Blue Rewards membership scheme from tomorrow, 1 April.

The changes mean current account customers who currently earn £36 a year cashback will earn zero cashback instead. Those with several Barclays products who previously pocketed £126 a year in cashback will see this slashed to £66.

Barclays Blue Rewards is an optional add-on to Barclays current accounts. In exchange for a fee, customers earn cashback on certain Barclays products. To be eligible, customers need to have a suitable Barclays current account, have access to online banking or the Barclays app, and have £800 paid into their account every month.

Currently, customers pay £4 a month for Blue Rewards. They can earn £3.50 a month for the first two direct debits paid out of their account each month (£7 in total), £5 if they have a Barclays mortgage, £1 if they have a Barclays loan and £1.50 if they have Barclays life insurance. A customer with all these products would earn net £10.50 in cashback each month, or £126 a year.

Someone just paying the direct debits, but not holding other Barclays products, would earn net cashback of £3 a month, or £36 a year.

But from tomorrow the Blue Rewards fee is going up to £5 a month while the cashback rates are reducing. Someone just paying the two direct debits would earn £5 a month cashback – but this is cancelled out by the fee.

A customer with a Barclays mortgage, loan and life insurance could earn an additional £5.50 a month in cashback, equating to £66 a year, £60 less than currently.

A Barclays spokesperson said: “Our Blue Rewards programme offers customers a range of rewards for banking with Barclays. We wrote to customers in December confirming that from March 2022 we would be making some changes – adding new customer benefits, while reducing the cash rewards and increasing the monthly fee by £1.

“Blue Rewards customers now have access to a range of frequent offers and prize draws – and we will share more detail on other new benefits as they launch across 2022.”

Barclays says customers need to cancel their Blue membership before 5pm today (Thursday 31 March) to avoid paying the new £5 fee in April.

The shake-up means most account holders will be better off ditching Blue Rewards and moving elsewhere to earn cashback or to benefit from a switching incentive of up to £150.

NatWest is offering £150 cashback to switchers, up from the £100 the bank offered at the end of 2021. The deal launched on 25 January and is due to close on 7 April.

Virgin Money recently tweaked the switching incentive on its M Plus Account. Switchers now receive a £100 Virgin Experience Days Gift Card, and the account pays a higher credit interest rate of 5.02% on balances up to £1,000 for a year.

Santander charges £4 a month for its 1|2|3 Current Account. Account holders earn interest of 0.5% on balances up to £20,000 and up to 3% cashback on selected household bills, capped at £5 in each cashback tier each month.