Many customers of Tandem Bank have threatened to close their accounts following the introduction of a £5.99 monthly fee on its currently free cashback credit card.
The monthly fee, which customers must pay or lose the privilege of using the card, will become effective from 9 March 2020.
Current cardholders who decide not to join the fee-paying membership scheme will be able to use the card until that date. After that date, however, their cards will be deactivated while their credit agreement remains in place until the credit card balance is repaid.
Chief executive Ricky Knox said the decision to start charging all customers was needed in order to provide a “sustainable” service.
The digital challenger bank stopped accepting cashback credit card applications at the end of 2019, and will permanently close the service down on 9 March.
The end of a free ride
Launched in February 2018, the Tandem cashback credit card offers fee-free spending overseas as well as a generous 0.5% cashback on purchases worldwide. It provides the following features:
- 0% interest on purchases and cash withdrawals
- No fees on overseas spending and cash withdrawals
- Access to a linked easy-access savings account paying 1.5%
- 5% cashback on all purchases over £1 worldwide
To date, holders of the popular credit card have earned a total of £1.4m cashback and saved £2.1m on foreign exchange fees, according to the bank.
As Tandem customers take to social media to vent their anger (most deem the monthly fee “too expensive”), the bank is encouraging them to apply for its Tandem Journey credit card.