The All-In-One credit card costs £3 a month and pays 0.5pc cashback on all purchases. It also gives customers five “welcome cashback” offers from retailers between 5pc and 25pc if you opt into the scheme on mobile or online banking.
The Everyday credit card and Zero credit card do not offer any perks.
What’s brought on the changes?
Santander said the capped cashback was in response to the reduction in EU “interchange fees” which was put into place December 9 2015.
Interchange fees make up part of the Merchant Service Fees which retailers pay to their banks to process card payments.
Before the Interchange Fee Regulation was introduced, retailers paid an average rate of 0.8pc per credit card transaction (which could go up to 1.5pc) and 9p for debit cards. As of December 9, the fees were capped at 0.3pc for credit cards and 0.2pc for debit cards.
The EU Commission suggested the cap would not only be beneficial for retailers but also consumers as the savings could be passed on in the cost of goods and services.
According to Andrew Cregan from the British Retail Consortium, the trade association, prices have gone down but this was not because of the interchange fee cap – he said it was due to a “number of factors”.
However a direct negative result of the cap is a spare of credit card reward cuts and increases in fees.
Capital One, RBS/Natwest, Tesco Bank and M&S Bank are among some of the providers to withdraw credit cards or slash the rewards in the last year because of the interchange fees.
American Express’ Platinum Express Everyday credit card still pays a generous 5pc cashback up to £100 in the first three months – as long as you spend £3,000 in a year.
After this, it offers 0.5pc on purchases of £5,000 and 1pc on spend over £5,001. Purchases above this will earn 1.25pc.
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