Credit card

Lloyds Bank Launches New Cashback Credit Card: Is It Good?


Lloyds Bank has launched a new credit card that allows customers to earn money every time they spend.

Customers earn 0.25% for every pound spent up to £ 4,000 and 0.5% for every £ 1 spent over that amount.

New customers will also receive £ 20 cash back when they spend £ 1,000 in the first three months.

Customers can track the accumulation of rewards as the cash back amounts will be visible on their monthly statements.

Any cash back earned will accumulate over the calendar year and will be paid directly to the customer’s credit card account each January as a lump sum.

Elyn Corfield, Managing Director of Lloyds Bank, said: “We are delighted to have launched our new cashback credit card, rewarding customers for every purchase they make.

“Whether it’s daily expenses for groceries, clothing or restaurants, our customers will be able to earn money, which will then be saved and deposited into their account at the start of each year.

How does it stack up?

Buyers who want to put the last 18 months behind them and start spending on activities and events that they have felt so deprived of, might well consider this simple cashback offer.

However, the returns offered are modest and while the £ 20 incentive to spend £ 1,000 in the first three months is a 2% return, the 0.25% interest on your first £ 4,000 each year does not. will generate only £ 10 cashback.

For someone who spends £ 1,000 each month over 12 months, they can expect to earn a total of £ 70 in cashback given the start-up incentive and the 0.5% return for spending over £ 4000.

For cashback enthusiasts, Lloyds’ new credit card goes hand in hand with American Express cashback cards.

The Lloyds reveal is timely given that Amex has cut prices.

Amex cardholder cash back rates will be reduced by up to 50% in some cases starting this week.

The cashback reductions concern its free Platinum Cashback Everyday Card and his Platinum Cashback Card which comes with an annual fee of £ 25.

Its free customers currently receive 1% cash back when they spend more than £ 5,000 per year, but under the changes any spending up to £ 10,000 will only earn 0.5%.

Payment card holders will earn 0.75% cashback on their spending up to £ 10,000, down from the current rate of 1%.

Michelle Stevens, associate editor of personal finance comparison site Finder said, “Unlike some products in the Amex line, the Lloyds deal does not come with an annual fee.

“However, an annual fee may be worth paying if the value of the cash back you would earn – plus any other perks – outweighs those fees.”

Some UK retailers do not accept Amex as it charges them around 3% for every sale they make.

Some UK retailers do not accept Amex as it charges them around 3% for every sale they make.

For those who are concerned that there will be a charge attached to their card, the main competitor is the free Platinum Cashback Everyday card from Amex.

Its 0.5% interest on all expenses up to £ 10,000 and 1% beyond is more generous than what Lloyds offers.

New cardholders also get 5% cash back on their purchases – up to a limit of £ 100 – for the first three months after joining – much better than the £ 20 incentive offered by Lloyds.

It should also be noted that not all retailers accept American Express. It charges merchants more than Mastercard and Visa for every sale they make, which means some retailers choose to avoid Amex cards altogether.

There are now very few large chains that don’t accept it, but you are much more likely to have a problem in smaller stores across the UK.

However, some notable organizations still do not accept Amex, including Tile Giant, Dunelm, and Sky.

The only other comparable cashback deal is offered by Santander, which comes with a monthly fee of £ 3 or £ 36 per year, and has an APR of 23.7%.

His All-in-one Mastercard credit card pays 0.5 percent cash back on purchases and offers a range of other benefits, such as no foreign transaction fees on purchases made abroad.

Meanwhile, Barclaycard, which made headlines in May for announcing drastic cuts to borrower credit limits, offers a card that pays 0.25 100% discount on all purchases.

It also comes with free overseas spending and an APR of 22.9%.

In contrast, the Lloyds cashback credit card has an APR of 19.9%, while the No-Fee Amex has an APR of 22.2%.

Verdict?

Choosing the best credit card as with many things comes down to whether the benefits on offer are best suited for your situation.

You may be looking for a card to erase your debt – and in this case, a credit card with balance transfer might work best.

This allows customers to pay off their debts by transferring all of the debt to the new card, often with the promise of 0% interest for a specified period.

Or, you can be optimistic that with the deployment of the vaccine in full swing, you will soon make up for lost time by going on vacation abroad and therefore need a credit card that is best suited to the expenses at hand. abroad.

But if you decide that a cash back or rewards credit card is right for you, then it all depends on how much you spend and how you spend it.

If you’re spending a lot, you might want to consider a card that complements that, like the one from Amex. Gold Preferred Rewards credit card.

Although it comes with an annual fee of £ 140 due after the first year, it offers cardholders 20,000 bonus points when they spend £ 3,000 in their first three months – which is enough for a card. – £ 100 gift from Amazon and it can also be converted into Avios points.

Cardholders then earn a Membership Reward point for every £ 1 spent and can now also get £ 5 back twice a month when spending on Deliveroo.

For those who are neither ready to commit to the fees nor confident of spending enough with such a card, the free Amex cashback card or the new Lloyds credit card might be a good option.

You’ll be able to get a better return with the Amex Free Cash Back Credit Card, but at least with Lloyds, you can be more confident that you can use your card wherever you go.

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