RBS customers are the latest to lose out from a forthcoming cap on the fees card firms charge retailers to process transactions, as the provider has revealed it's scrapping its YourPoints credit card reward scheme.
Currently around a million people are enrolled onto both RBS and sister bank NatWest's YourPoints scheme, where shoppers earn one point per £1 spent using their card, which they can then redeem on rewards including travel, days out and restaurant meals.
However the banking group has revealed it's axing the scheme later this year for both new and existing customers, although it will continue to offer its Cashback Plus credit and debit card scheme where users earn up to 1% cashback on spending at certain retailers. See our Cashback Credit Cards guide for the best buys.
The decision follows a similar announcement by Capital One last week, which will see it completely cut cashback for some of its cardholders and reduce the amount others can earn from 1 June (see the Capital One cashback card holder? It's axing the perk for some MSE News story).
Both providers blame their decisions on an EU initiative, which will cap the so called 'interchange fees' card firms charge retailers when credit and debit cards are used, later this year.
See our EU agrees card charges shake-up, but will shoppers pay less and could it limit future credit card deals? MSE News story and the Q&A below for a full run-down of what interchange fees are and why they're affecting credit card cashback and rewards.
I'm an RBS YourPoints customer. What's happening?
All RBS and NatWest credit card customers were eligible to join the YourPoints scheme, but we can't break down which exact cards are affected as a lot of the providers' old credit cards don't have names. Here's what's happening for YourPoints customers:
- I have a Black, Private or Private Black credit card, Gold Plus or Advantage Private charge card. You'll receive a letter later this summer detailing the timescales for earning and redeeming points. RBS is still finalising the exact dates.
- I don't have a Black, Private or Private Black credit card, Gold Plus or Advantage Private charge card. You'll receive a letter between 23 April and 31 May 2015 letting you know that you can earn points until 30 June 2015 and must redeem them by 31 October 2015.
In a statement RBS says: "From 1 July 2015, we are closing the YourPoints rewards scheme as a result of caps on interchange fees. These regulatory changes would have an impact on our ability to recoup the costs of running multiple schemes and so we are simplifying to focus on one reward scheme – Cashback Plus.
"We are writing to customers enrolled in YourPoints from the end of April. Customers' existing credit cards won't change as a result of this change, but we will provide information on alternative credit cards available."
As RBS has only finalised the details for this second group of customers, all of the information below only relates to this group.
How do I redeem points?
Points can be redeemed via the same method as usual; online or by calling the YourPoints team.
From 11 May until 31 October you'll also be given the option to swap points for a cash credit onto your credit card. However if you do this your points will be worth half the amount they do in rewards.
The letters being sent out will state how many points you have, what they are worth if you redeem them in rewards and how much they're worth if you take them as a cash credit.
If you choose cash credit online or over the phone it will be credited to your credit card within 10 days.
Can I still use my RBS card?
You can continue to use your credit card as normal now and after the scheme is axed, your details won't change. The only difference is you'll no longer earn YourPoints on spending from 1 July.
Bizarrely, from 1 July YourPoints customers who have in the past accrued £100 of interest per year after not repaying their bills in full, will start getting 0.5% cashback on purchases. RBS says this is based on assessment of "past behaviour" and isn't something customers can become eligible for following the closure of the scheme.
However this isn't a reason to keep the card and to not repay on time, you should always repay any credit card on time and IN FULL.
Can new customers still sign up for YourPoints?
The YourPoints scheme closes to new customers from 23 April 2015.
Q&A on what's happening to cashback card rewards
What are interchange fees and why do they affect cashback cards?
'Interchange fees' as they are known in the industry, typically add around 8p per transaction for debit card payments and around 0.8% of the transaction for credit card payments.
But in March, MEPs voted in favour of bringing in a cap of 0.2% of the value of the transaction on debit cards and 0.3% of the value of the transaction for credit cards. The UK Cards Association says this is expected to take force in the last quarter of the year in the UK. See the EU agrees card charges shake-up MSE News story for more on this.
MoneySavingExpert.com has previously raised concerns a cap would lead to card rewards and 0% deals being scrapped – something which has proved correct in Capital One and RBS's case. It's also unlikely retailers will pass on any gains to shoppers.
The rules still need to be officially endorsed by the Council of Ministers before they can take effect, and it's yet to be confirmed how they'll be translated into UK law.
Will Amex ditch cashback cards?
For the first three years the EU's cap will not apply to American Express (Amex) or Diners Club issued cards so it's unlikely the pair will axe cashback.
Be aware we are talking about a card actually from Amex or Diners Club. If it's issued by another bank but with either of those logos, then those cards are hit by the cap. So a Barclaycard with an Amex symbol is affected.
When we asked Amex if it had any plans to axe its cashback cards, it said once the new rules have been officially approved, it will "analyse their potential implications and respond accordingly if required".
We didn't ask Diners Club as it's not a major provider in the UK.
Will other providers ditch cashback cards?
After the Capital One move, we asked the major best buy cashback card providers whether they're planning to axe cashback. Here's what they said:
- Aqua says it has no plans at present to withdraw its cashback offering.
- Asda says it is "committed to maintaining its benefits", including the level of unlimited cashback on existing credit cards at the current 1% on Asda spending and 0.5% on spending outside of Asda.
- Barclaycard didn't respond to our questions despite us pushing it to.
- Lloyds Bank says it can never guarantee how long a product will remain on the market and that it regularly reviews its range.
- MBNA says it's waiting to see how the UK implements the cap before it makes any changes.
- Santander says it needs to "reflect" on how to ensure it maintains the "right balance" going forward. It adds that it regularly reviews all its products.
In the meantime, here are our top pick cashback cards below. Just remember to always repay IN FULL each month. For the full details on these cards plus other alternatives that are still available, and our eligibility checker tool, see our Cashback Credit Cards guide.
Top cashback credit cards
|Card||Annual fee||Cashback||Rep APR|
|Amex Plat Everyday* – good for big, one-off planned purchases as huge intro cashback.||None||5% for 3mths up to max £100 back, tiered up to 1.25% after.||19.9%|
|Santander 123* – best for those who drive big mileage so petrol cashback covers fee.||£24 (i)||3% on petrol/trains (max £9/mth back), 2% depart stores, 1% supermarkets.||16.5%|
|Aqua Reward* – for poorer credit scores.||None
||0.5% on all spending.||34.9%|
|(i) Refunded in first year for Santander 123 bank account customers.|
On whether or not the specific cards in the table above will keep their cashback, MoneySavingExpert.com creator Martin Lewis adds: "Amex-issued Amex cards like the one above are unlikely to be hit by the cap – so it's unlikely to change.
"Santander 123's cashback is integral to its offering, so I suspect it's unlikely to go and Aqua uses it to target poorer credit scorers, so I'm hopeful (no certainty) it'll stay."