6 April 2005
A number of the UK's banks and building societies have reduced the amount of cashback offered on credit card purchases, an industry report has revealed.
Cashback has traditionally been regarded as one of the more appealing consumer options on credit cards and the decision to cut back on the service has unsurprisingly been largely met with disapproval.
Consumers who currently pay off their monthly bills in full can earn between one and two per cent on every credit card purchase through cashback but this figure will considerably fall as a result of the changes.
However, some companies have now identified this trend and are beginning to go against the grain.
Earlier this year Morgan Stanley introduced a short-term offer of double cashback, paying two per cent on the first £2,000 spent on the card, and one per cent thereafter.
But the value of all these "added extras" has been called into question.
Sheila Macdonald, chief operating officer at the Co-operative Bank, said: "It is obvious that the days of these unsustainable offers are numbered and that in the future credit card companies will have to offer transparent, competitively priced deals with one, low rate for all transactions."
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