Cashback offers from Halifax, NatWest and RBS unveiled ahead of the new switching service launched this week have so many restrictions that other current accounts may be a better deal.
Last month saw three big high street names, Halifax, NatWest and Royal Bank of Scotland introduce schemes for current account customers offering to pay as much as 15% cashback at selected retailers.
The reward schemes, designed as an incentive to entice new and retain existing customers, were introduced prior to this week’s launch of the new seven-day switching service which makes it easier for customers to change bank account.
Though these schemes at first glance may seem appealing, new Which? research has found they come with tight restrictions on how you earn cashback.
Halifax’s Cashback Extras
Cashback Extras offers between 5% and 15% on purchases at 16 retailers, including Morrisons, Argos, Homebase and Ocado.
However, customers can’t simply spend at any of the retailers to earn cashback. Instead, Halifax allocates a limited set of deals each month, based on customers’ shopping habits. You have to log in to online and mobile banking, click on an offer and shop at that retailer with a Halifax debit or credit card. Cashback is paid into the current account a month later.
New customers also qualify for a £100 joining incentive if they switch their main current account before the end of the year.
NatWest and RBS Cashback Plus
Cashback Plus pays a lower 1% cashback in 12 retailers, including BP, Cineworld, Caffe Nero, Lock Fyne restaurants, Ernest Jones, H Samuel, Charles Tyrwhitt, and American Golf. Customers can also earn cashback at Tescos until the 30th November.
The scheme is open to most current account customers, except Basic, Cash and Step account holders.
Once you’ve earned £5 worth of cashback you can either transfer it into your Natwest or RBS current account, exchange the rewards for gift cards or tickets from selected retailers or donate the the rewards into one of the scheme’s chosen charities.
Before using the scheme, you should check the exclusions on each provider’s website as you could lose out on some hard-earned cashback. For example, transactions made through third-party websites such as PayPal and Amazon Payments are not eligible for rewards.
Higher cashback rates elsewhere?
The new cashback schemes offer a boost for existing customers, but if you’re looking for a new account that pays decent rewards you are still likely to get more by switching to the Santander 123 current account, despite its monthly fee.
Santander’s 123 offers between 1% and 3% cashback on household bills paid by Direct Debit as well as up to 3% interest on accounts in credit by between £3,000 and £20,000.
Customers can earn higher levels of cashback with some of the best cashback credit card deals on the market. You can earn cashback on nearly all credit spending and not just at particular retailers.
For example, the American Express Platinum Cashback credit card offers up to 5% cashback for the first three months (capped at £125) and 1.25% cashback after that.
Cashback credit cards are best suited to customers who can pay off their bill in full each month to avoid paying interest on their monthly spend.
Switch current accounts
With the launch of the new seven day switching service it’s become a lot easier to switch bank account. Your new bank is responsible for transferring all of regular credit and debit payments. It will also redirect payments made to your old account for up to 13 months after transfer. If anything goes wrong with the switch and you incur bank charges as a result, you will be reimbursed.
If you are looking to switch current account, there are some good deals on the market. We can show you how to find the best account for you.