Barclays current account customers who bank online or via the bank's app can sign up to its new Blue Rewards scheme, where you pay £3/month but get at least £7/month back.
Update: While this article was published in April 2015, the information in it has been checked and is correct as of 16 September 2016.
It's not a reason to switch to it, but if you're one of its five to six million current account customers, it's a winner. See below for more on the fees, and also see our Best Bank Accounts guide for more info on accounts that pay up to 5% interest, give a £150 switching bonus, or offer free travel insurance.
The new "Barclays* Blue Rewards" programme launched in April. However to get the add-on scheme, which is available to new and existing current account customers, you'll have to pay at least £800/month into your bank account, as well as a £3/month fee. This effectively means the £7/month cash bonus is reduced to £4/month.
It's available for customers who dip into both an arranged and unarranged overdraft. Plus those with a Barclays current account and a Barclays mortgage and/or who take out or renew their home insurance will earn an additional cash bonus of £5 and £3 respectively.
To sign up, Barclays mobile app users will need to update their app to the latest version. It's free to download and is available for iPhone, Android, Windows 8 and Blackberry, though excludes Z10/Q10. They'll then see a 'rewards' icon with the option to sign up.
Barclays online banking customers meanwhile, will see "Barclays Blue Rewards" when they log in online. They will then have the option of signing up to the scheme.
The provider says, "Barclays Blue Rewards offers the best monthly rewards for more average UK-salary workers than any other provider." But MoneySavingExpert.com has done its own comparison. See below.
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Our view – is Barclays' rewards deal any good?
Martin Lewis, founder of MoneySavingExpert.com says: "Barclays' new deal is certainly better than nothing. And for those existing Barclays banking customers who can't or won't switch, and who pay at least £800 a month into their account, it's a no-brainer.
"Just sign up, pay your £3 a month, get £7 a month back, and you're getting on for being £50 a year better off.
"Yet if you're willing to switch – which you should be – it's much easier than it used to be with the seven day switching process. There's a red hot bank account market out there – you can get up to £150 instant free cash with a switching bribe, or 5% interest on savings. (See top bank accounts.)
"Having crunched the numbers, this deal often wins if you have a Barclays home insurance or mortgage as well. Otherwise compared to the whole of the market this is only competitive for those who go into their authorised overdraft buffer each month, or who go overdrawn for no more than a day or so (it charges 75p a day).
"This is because the nearest competitor Halifax, which pays a flat £5 a month, only does so if you're in credit. So if you nip into your overdraft Barclays would still pay, but Halifax wouldn't. Yet overall there are cheaper overdrafts than Barclays available, so if you are overdrawn more regularly it'd be cheaper to bank elsewhere."
How does it compare with other current account reward schemes?
These days there are many current account deals to choose from. But the two key incentives tend to be either a switching bonus or in-credit interest.
You need to work out which deal is best for you. Our table below shows how Barclays' new reward scheme for in-credit current account holders compares with our best buys:
|Current account||Switching bonus||In-credit interest (AER) or reward||Min monthly income/pay-in amount||Min standing orders/direct debits||Max rewards/year (i)|
|Barclays Bank*||None||Up to £13/month or £156/year reward||£800||Two direct debits||Up to £156/year (ii)|
|First Direct*||£100||None||£1,000||None, but need to switch||None|
|Halifax||£100||£5/month (after tax)||£750||Two direct debits||£60|
|Club Lloyds||None||4% up to £5k (iii)||£1,500||Two direct debits||£196|
|M&S Bank*||£100 gift card||£10/mth gift card for 12 months||£1,000||Two direct debits||£120 gift card|
|Nationwide*||None||5% up to £2,500 for 12 months (iv)||£1,000||None||£122 (1st year only)|
|Santander* (v)||None||1.5% up to £20k. Plus up to 3% cashback on certain bills||£500||Two direct debits||£238 (after fee)|
|TSB*||None||5% up to £2,000, plus 5% contactless cashback on £100 spend each month||£500||None||£158 (vii)|
(i) Approx interest you'd earn in a year before any tax if you were to hold the max balance. (ii) Barclays doesn't tax the rewards, but customers should check if they need to declare anything as income tax (iii) 1% under £2,000, 2% on £2k-£3,999.99, 4% on £4k-£5k (iv) 1% after year one (v) Santander's 123 account has a £5/month fee. (vii) £98 from interest plus £60 (tax free) from cashback.
What about if you're overdrawn?
If you regularly dip into an overdraft or go into an unauthorised overdraft, here are the charges you'll face:
|Current account||Arranged overdraft||Unarranged overdraft|
|Barclays Bank*||£15 buffer, then up to £1,000, 75p/day; up to £2,000, £1.50/day; over £2,000, £3/day.||No unarranged overdraft, but its 'Emergency Borrowing' feature has a £15 buffer, then is £5/day (max £35/mth – if you stay in Emergency Borrowing for more than 7 days, you'll be charged the arranged overdraft fee for any further days). £8 unpaid item fee (max one/day). You'll only pay one fee per day, whichever is highest.|
|First Direct*||0% up to £250, 15.9% EAR above that.||£10 buffer then £5/day (max £80/mth) plus 15.9% EAR|
|Halifax||£50 buffer, then charges are tiered; up to £2k, £1/day; £2k-£2,999, £2/day; over £3k, £3/day.||£5/day|
|Club Lloyds||Up to £100 fee free, then 19.89% EAR + £6/mth fee.||£10 buffer, then 19.89% EAR interest + £5/day under £25, £10/day for £25+ (max £80/mth), £10 unpaid item fee (max three/day) + £6/mth fee.|
|M&S Bank*||0% up to £100, 15.9% EAR interest above that.||£50 buffer, 15.9% EAR interest. M&S Bank only allows you to go £50 over your overdraft limit|
|Nationwide*||0% 1st 12mths, £10 buffer and 50p/day after.||£10 buffer, then £5/day (max £60/mth), £5 paid/unpaid item fee (max £35/mth)|
|Santander*||0% for four months after switching, then £12 buffer and £1/day||£12 buffer then £6/day (max £95/mth)|
|TSB*||Up to £25 fee free, then 19.94% EAR + £6/mth usage fee.||19.94% EAR. There's a £10 buffer, then £5/day under £25, £10/day for £25+ (max £80/mth); £10 unpaid item fees (max 3/day).|
How good is Barclays' customer service?
In MoneySavingExpert.com's latest biannual banking poll where we ask readers to rate their bank's customer service, Barclays got the wooden spoon as 22% rated it "poor" while 42% rated it "great". Update: In the latest poll in August 2016, Barclays had improved its service slightly, and sits in last-but-one place.
In comparison, First Direct, which came top, received a 91% "great" rating with only 3% rating it as "poor".
How do I qualify for the deal?
To get the deal you must meet the following criteria:
- Deposit at least £800/month into a Barclays current account. This can be any current account other than the following: Barclays Cash Card, Young Person's, BarclaysPlus, Wealth and Foreign Currency, and Business Accounts.
- Have at least two direct debits paid each month (excludes standing orders).
- Be signed up to online banking or the Barclays mobile banking app.
- Pay a £3/month fee, which will be debited from your current account.
How do the rewards work?
The maximum you can earn in rewards is £13/month (£156/year) once the £3/month fee has been taken into account. However to earn this you need to be a Barclays current account, mortgage, home insurance and loan customer.
If you're only a mortgage customer, only an insurance customer or only a Barclays loan customer, you can't get the deal, you must be a current account customer too and also bank online or via the app.
Barclays confirms that it doesn't tax the reward given, but adds that the amount may be subject to income tax, and it's up to the customer to check this.
Here's how it works:
- Barclays current account customers only: Will receive £7/month (£4/month after the £3 fee is taken) cash reward.
- Barclays current account AND mortgage customers: Existing and new mortgage customers will receive £12/month (£9/month after the £3 fee is taken) cash reward for the term of the mortgage.
- Barclays current account AND home insurance customers: Existing insurance customers who renew their policy/take out a new policy with Barclays, and new home insurance customers (some exclusions apply) will receive £10/month (£7/month after the £3 fee is taken).
- Barclays current account, mortgage AND home insurance customers: Existing and new insurance customers who renew their existing policy/take out a new policy with Barclays (some exclusions apply) and have a residential mortgage will receive £15/month (£12/month after the £3 fee is taken into account).
- SmartSpend: In addition to cash, customers can also earn up to 7% when shopping through Barclays online at select retailers, including Boots, Gap, Laura Ashley, Expedia and Topman. SmartSpend is available to non-Blue Reward customers, but they'll earn 1% less cashback than reward customers.
- Barclays current account AND loan customers: Since this story was published, Barclays has added a 'loan reward' to its scheme which gives £1/mth back (there's no minimum loan amount). It's only valid on one loan at any one time, provided that customers keep up loan repayments. These customers will receive £8/month (£5/month after the £3 fee is taken).
- Barclays current account customers: Since this story was published, Barclays has added boosted SmartSpend cashback to its scheme, meaning you can get up to 7% cashback on purchases made at its retail partners. SmartSpend is available to all Barclays online banking customers, but having Blue Rewards means rates are boosted.
How can I spend the cashback I earn?
Barclays says cashback will be paid into a separate digital rewards wallet so customers can see exactly how much money they're earning each month. You can then transfer this cash into any of your Barclays accounts, where you can spend it as you wish.
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