Barclays to launch new reward scheme - but it'll cost you
Barclays is to launch a paid-for new rewards programme on Monday 20 April, called Barclays Blue Rewards.
For £3 a month, customers who sign up will get monthly fixed cash rewards up to £15. They will also receive cashback up to 6% when spending with selected partners such as Expedia, Gap and Boots.
Customers signing up to the Monthly Loyalty Reward scheme will receive £7 a month paid into a digital wallet connected to a Barclays current account of their choice, meaning they will be £4 up after the £3 fee. Mortgage customers will receive £5 a month (£2 gain), and insurance customers £3 a month (no gain).
Give and take
Personal finance expert Andrew Hagger of Moneycomms.co.uk said: "I'm not sure why there's this give with one hand (£7) and take with the other (£3 fee) deal. Perhaps offering a £4 payment would make it more obvious that it's less rewarding than the Halifax's £5 a month scheme?"
He added: "It's worth pointing out that Halifax pays £5 a month and Santander 123, which charges a £2 monthly fee, offers credit interest and cashback on utility direct debits."
Hagger also warned that such reward schemes shouldn't tempt you to switch your financial products to a provider unnecessarily. "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 respectively with Barclays."
Meanwhile, Barclays said more lower-paid workers will be eligible for its reward scheme than rivals, as the Blue Rewards programme is open to customers who deposit just £800 a month (less than the full-time minimum wage) into their current account. They must also have two direct debits set up and sign up to Online Banking or the Barclays Mobile Banking app.
Hagger concluded: "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."
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.