15th April 2015
Barclays has become the latest bank to offer a cashback rewards scheme to its current account customers.
From Monday, Barclays Blue Rewards allows customers to earn up to £15 each month or £180 a year when they pay at least £800 per month into their current account and set up at least two direct debits. However, the account comes with a monthly fee of £3.
However, experts say the account is not as competitive as the cashback or rewards schemes offered by rival banks Halifax and Santander.
Barclays’ customers receive their cash rewards into a separate digital Rewards Wallet, accessed through Barclays Online Banking or the Barclays Mobile Banking app.
How the rewards add up
Andrew Hagger, of Moneycomms.co.uk , says: “It looks as if Barclays has realised it needs to be more competitive to maintain its share of the current account market. “Although the numbers are not huge in the scheme of things the current account switching figures show that the bank has seen a net loss of 51,965 customers to competitors in the last three quarters of published data (Q4 2014 to Q2 2015 inclusive) and there’s a good chance that the latest set of figures out next week will reveal a similar trend.
“The £7 monthly payment is money for nothing although in effect you’re only getting £4 once the £3 monthly fee is taken into account. I’m not sure why there’s this give with one hand (£7) and take with the other (£3 fee) perhaps offering a £4 payment would make it more obvious that it’s less rewarding that the Halifax £5 per month?”
Hagger warns that customers should not take it for granted that they will make savings by keeping all their products with one bank.
He says: “There are further monetary rewards up for grabs if you have or take a Barclays Mortgage or Home insurance – however although it may be convenient to have all your financial products under one roof, you could end up paying over the odds by not shopping around. By buying these products elsewhere you may be able to save more than the £60 and £36 you’ll receive each year for keeping your mortgage and home insurance with Barclays.
“It’s worth pointing out that Halifax pays £5 per month and Santander 123 which charges a £2 monthly fee offers credit interest and cash back on utility direct debits.”
David Mann, money expert at uSwitch.com, says: “Barclays does appear to be missing a trick by not including its credit card customers. It’s also important to note that customers have to be signed up to either online or mobile banking to benefit – which could see some people miss out.”
He adds: “Barclay’s new scheme could work out to be a great option for loyal customers who have a range of products with the bank, but it may not be the best choice for everyone. Halifax offer a £5 monthly cash reward on their current account and Santander’s 123 account could boost your balance if you have hefty food spend or utility bills. Taking the time to investigate all your options could really pay off.”
Charlotte Nelson, finance expert at Moneyfacts.co.uk, warns: “There is a danger that if this account is not used wisely the overdraft could extinguish any gains. Not only will customers get charged for going into their overdraft, but they will also have already paid a £3 fee on top.
“Current account customers should look at this option in depth, but it can’t be denied that they could achieve better rewards elsewhere, without paying an upfront monthly fee.”