Moneywise Customer Service Awards 2016: The winners: Credit cards and loans
For the eighth year in a row, we’ve asked readers of Moneywise magazine and Moneywise.co.uk to share their experiences, good and bad, to find the most trustworthy financial companies in the UK.
This year, more than 24,000 people took the time to share their experiences and to score firms. For more information on how the awards work, see our Moneywise Customer Service Awards 2016 page.
So without further ado, meet the most trusted credit card and loan providers in the UK in 2016.
Also see the Moneywise Awards results for:
Most trusted provider
Winner: First Direct
Highly commended: John Lewis
Readers trusted First Direct more than any other to look after their credit cards. Alongside the usual praises for the online and telephone only bank, in the rare instances that customers were affected by fraud, readers were grateful for speedy, no-hassle resolutions.
One says: “I’ve never had anything but positive experiences and they helped reclaim a fraud on my credit card.”
In second place is John Lewis, and, again, readers feel like their backs are covered. “John Lewis is always able to answer my queries. They always contact us if there are any unusual amounts on the credit card,” says one.
Best credit card for rewards
Winner: John Lewis
Highly commended: American Express
John Lewis picked up the gong for the best reward scheme. It pays the equivalent of 1% cashback on spending in the John Lewis Partnership, which includes Waitrose, and 0.5% elsewhere.
While the cashback is good, a few providers will pay a similar amount. What sets John Lewis aside is the way it treats its customers.
One reader summarises: “It’s an excellent provider, answers calls quickly, and has understanding and friendly staff. The rewards are fantastic.”
American Express followed closely behind the employee-owned partnership. “Amex is easy to use, any issues are resolved quickly and they reward their members well with cashback,” says one happy customer.
- The best credit cards for rewards and cashback - updated weekly.
Most trusted prepaid card provider
Highly commended: Caxton FX
Prepaid cards are starting to look like a credible alternative to travellers cheques for frequent holidaymakers. They don’t have the full protections of a credit card or current account, but they can be much safer than cash.
This year’s winner, FairFX won over customers with all these benefits and competitive exchange rates. As one reader says: “I got a really good deal with this card. When going overseas, I feel more secure in transactions as it is limited to what I add into the account.”
Caxton FX took second praise with similar praise. To one reader: “It is the best way of taking money on holiday.
Most trusted provider
Highly commended: Lending Works
In such a competitive market, offering the cheapest rates on loans isn’t enough to win customers’ loyalty. That’s not to say Zopa doesn’t have good rates – it does – but readers are just as likely to highlight the transparency and ease of the service.
Zopa was commended for “great rates and customer service,” not to mention its “hassle free application process, by far the best in a market for those whose credit score is not perfect”.
Lending Works, which came closely behind Zopa, also scored highly for rates, customer service, and for accommodating people without pristine credit histories, especially when caused by error.
“Lending Works listens to its customers and talks to you as an individual so that they come up with the best possible outcome, instead of using credit scores that are sometimes wrong,” says one reader.
Most trusted mortgage provider
Winner: First Direct
Highly commended: Coventry Building Society
It’s rare that customers get a nice surprise in the terms and conditions, but that’s exactly what First Direct, winner of the Most Trusted Mortgage Provider Award, gave one reader: “I was not aware initially that I have their ‘mortgage promise’ of no more than 1% above base rate. Happy days!!”
More generally, customers like the competitive rates and lack of fiddling with the SVRs. Plus, they really, really like the offset mortgages: “As a higher rate taxpayer, First Direct’s offset tracker mortgage saves me a fortune. I offset cash against it so in real terms it massively exceeds savings rates if I were just to keep the cash in a poorly paying interest rate account.”
Coventry Building Society came in second, impressing customers with good service, and consistently competitive rates. Several readers said they’d stayed with the Coventry through multiple remortgages.
Best P2P platform for savers
Winner: Lending Works
Highly commended: Zopa
Lending Works was deemed the best peer-to-peer provider for savers on the hunt for returns.
While peer-to-peer isn’t as safe as a savings account, the potential returns are much better, particularly if you reinvest interest, which is just one of the features from Lending Works.
“Forward thinking,” “easy to control my investment,” and a “simple, easy to use website” were just some of the reasons put forward by happy customers. Savers also think highly of peer-to-peer giant Zopa, both for rates and the platform.
“It was the only one available when I began peer-to-peer investing” might not sound like a huge compliment – until you realise that customer is still there, eight years later.
Most trusted P2P platform
Highly commended: Lending Works
Zopa snuck in front of Lending Works for most trusted provider, factoring in the views of both savers and lenders.
Zopa’s “feedback, security and rates” helped many customers feel like they could rely on the company to look after their savings, even without the belt-and- braces protection of the Financial Services Compensation Scheme.
That’s not to say there’s no protection for savers – Zopa boasts a remarkably low default rate, and an insurance pot to protect investors in case a loan isn’t repaid.
See the winners and runner-ups for:
The difference between two currencies; specifically how much one currency is worth relative to each other. For example, if £1 is worth $1.50, converting sterling to US dollars, the exchange rate is 1.5. Converting dollars to sterling at those levels, the exchange rate is 0.66, so $1 is worth 66p. There are a wide variety of factors that influence the exchange rate, such as a country’s interest rates, inflation, and the state of politics and the economy in that country.
A debit card that works in the same way as a pay-as-you-go mobile: you top it up with cash and then use it just as you would a normal debit/credit card. Although some are badged Visa and MasterCard, pre-paid cards are not a credit card; you can only spend what you load. Prepaid cards are aimed at people who might not traditionally hold bank accounts – children, teenagers, people with poor credit ratings, migrant workers, and benefit claimants – and there are no credit checks on the applicant.
With a tracker mortgage, the interest you pay is an agreed percentage above the Bank of England’s base rate. As the base rate rises and falls, your tracker will track these changes, and so rise and fall accordingly. If your tracker mortgage is Bank of England base rate +1% and the base rate is 5.75%, you will be paying 6.75%. Tracker rates are lower than lender’s standard variable rate (SVR) and as they are simple products for lenders to design, they usually come with lower fees than other mortgage schemes.
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.
Your credit score is a three-digit number (ranging from a low of 300 to a high of 850) calculated from the information in your credit report. Your credit score enables lenders to determine how much of a credit risk you are. Basically, a low credit score indicates you present a higher risk of defaulting on your debt obligations than someone with a high score. If you have a low credit score, any products you successfully apply for will carry a higher rate of interest commensurate with this risk.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
Also referred to as the bank rate or the minimum lending rate, the Bank of England base rate is the lowest rate the Bank uses to discount bills of exchange. This affects consumers as it is used by mainstream lenders and banks as the basis for calculating interest rates on mortgages, loans and savings.