Major bank to make massive change to current account deal and customers will be fuming
A POPULAR digital bank is making a major change to its popular current account cashback offer – and customers won’t be happy.
Chase, which launched in the UK in 2021, currently offers 1% cashback on debit card spending for 12 months to new customers.
And this was also paid on all overseas transactions too.
But from April 7, the deal will be slashed, with only select spending categories earning cashback – and everyday purchases will be left out.
Plus, only UK spending will be eligible - not overseas.
Under the new rules, cashback will only apply to groceries, travel, dining out, and select retail stores.
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This means spending on bills, fuel, and entertainment won’t qualify – a big blow for those who’ve been using the account to earn money back on all purchases.
The cashback cap will remain at £15 per month, meaning customers can still earn up to £180 per year.
Another key change is that is that from April 7, cashback will only apply to UK purchases made in sterling.
Despite the change, Chase remains a strong option for holiday makers, as it does not charge foreign transaction fees.
So customers will still be able to shop abroad with no additional charges.
It also offers fee-free cash withdrawals at Chase ATMs in the US.
Rachel Springall, finance expert at Moneyfacts, told The Sun: “At a time where interest rates are falling, it’s disappointing to see banks tweak the benefits on current accounts, such as cashback.
"Certain perks cannot always be sustained for long, and so providers must weigh up how they can still reward their customers or indeed entice new business.
“Those Chase customers who use their debit card on everyday purchases will now need to closely monitor how they use their card if they want to maximise the 1% cashback, which is applied each time they spend. "
Credit and debit cards routinely add fees of almost 3% when used abroad, and ATM charges can be as much as 7.95% which would add £8 to a £100 withdrawal.
What is cashback?
CASHBACK is a type of reward offered by banks, credit card providers, and retailers where customers receive a percentage of their spending back as cash.
Essentially, it's a way to earn money while making purchases.
For example, if your card offers 1% cashback and you spend £100, you’ll earn £1 back.
Cashback can be credited to your account, deducted from your balance, or saved up for future use, depending on the provider's terms.
It’s often offered on everyday purchases, such as groceries, fuel, or online shopping, and may be part of a promotional deal or an ongoing benefit of your account.
However, remember to check the terms and conditions, as some transactions may not qualify for cashback rewards.
By using cashback offers wisely, you can usually make your money go further on purchases you'd already be making.
Mark Powys, managing director for daily banking at Chase, added: “Chase's cashback offer is one of the most competitive on the market, enabling customers to earn a little extra on many of the essential things they already buy daily.
"As well as our cashback offer, Chase's current account offers a range of money management features, interest on small change round ups through Chase's round up account, and a competitive-rate easy access saver account."
Other banks shaking up rewards
Chase isn’t the only bank tweaking its rewards recently – Barclays has also made some changes.
Last month, Barclays, adjusted its saving rates on two of its other easy-access savings accounts - the Everyday Saver and the Rainy Day Saver.
These accounts let you deposit and withdraw money freely, but the interest rate depends on whether you make withdrawals during the month.
For the Everyday Saver, the interest rate is being lowered from 1.51% to 1.26% on balances up to £10,000.
So, if you have £5,000 in this account, you'll earn around £12.50 less in interest per year after the change (approximately £63 instead of £75.50).
What other card providers offer regular cashback?
AMERICAN EXPRESS:
If you're considering a credit card, the American Express Cashback Everyday Credit Card is a great option for those expecting a high-spend period.
It offers an impressive 5% cashback on purchases for the first five months (up to £125).
After this introductory period, you can earn up to 1% cashback, but you'll need to spend over £3,000 annually to qualify for ongoing rewards.
For those who might not meet the £3,000 annual spending threshold, the American Express Cashback Credit Card is another strong choice.
It also offers 5% cashback for the first three months (up to £125), followed by 0.75% cashback on spending up to £10,000 per year and 1.25% above that.
However, this card does come with a £25 annual fee.
AMAZON BARCLAYCARD
If you frequently shop online the Amazon Barclaycard is great for its regular customers.
It offers 1% cashback on Amazon purchases (boosted to 2% during Prime Days and Black Friday) and 0.25% cashback elsewhere (0.5% in the first year).
It also provides an Amazon voucher upon acceptance, usually worth £20.
SANTANDER EDGE CREDIT CARD
Lastly, the Santander Edge Credit Card offers 1% cashback on everyday spending (boosted to 2% in the first year, capped at £15 per month).
It has a £3 monthly fee and is only available to Santander current account holders.
In other news, Lloyds Bank is increasing the monthly charge on its Club Lloyds package bank account in June.
Club Lloyds is a current account which provides additional benefits compared to their standard account.
It functions like a regular current account, allowing direct debits, standing orders, and other standard banking operations.
However, it also offers a range of lifestyle benefits, cashback rewards, and access to linked savings accounts with preferential interest rates.
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At the moment there's a monthly fee of £3, but this is waived if you deposit £2,000 or more into the account each month.
If you’re unhappy with the changes, it may be worth shopping around to see if another bank offers a better cashback deal.
Where to find the best savings rates
Many savings accounts offer miserly rates meaning that money is generating little or no return.
However, there are ways to get your cash working hard. Sun Savers Editor Lana Clements explains how to make sure you money is getting the best interest rate.
Easy access savings accounts offer flexibility for customers, meaning they can dip in and out of cash when needed. However, the caveat is that rates can change at any time.
If you're keeping your money in an easy access account, you'll need to keep checking whether it's the best paying account for your circumstances and move if not.
Check in at least once a month to see what is happening in the market.
Check what is offered by your bank - sometimes the best rates are for customers only.
But do search the wider market as often top savings accounts are offered by lesser known providers.
Comparison sites are a good place to check for the top rates. Try Moneyfactscompare.co.uk or Moneysupermarket.
You can search by different account type. You'll usually get a better interest rate if you can lock your money away for a fixed amount of time, but it's always a good idea to keep some money in an easy access account in case of emergencies.
Don't overlook regular savings accounts often pay some of the best rates, but you'll need to commit to monthly payments. This can be a great way to get into a savings habit while earning top rates at the same time.