Cashback


#164

Yes, I actually have a MasterCard cashback card. I know that Amex rewards tend to be more generous (well, that’s quite the understatement…), but I do the vast majority of my shopping at shops that don’t accept them, so I figured that even with the much lower percentage I still get more cashback that way.


(Allie) #165

I have a Mastercard cashback card too, but the card is so terrible (Aqua Reward) I never use it - no Android Pay, online billing is a mess, etc.

Very few shops outright don’t take Amex. Not taking Amex contactless is too common for my liking (this is improving, albeit slowly), but not taking Amex at all is pretty uncommon. Still, common enough (maybe 10%, as a rough guess) to be annoying.


#166

I got one from NatWest. Since I also have their reward current account I don’t pay the fee. They give you 1% on supermarket, 0.5% elsewhere, and they give you quite generous extra rewards from time to time (e.g. in December they gave a whopping 10% on contactless transactions [including Android Pay, so I could use it for my weekly grocery shops]).

I’m not fond of their web interface or app (the only card I ever used in the last few years that just doesn’t show pending transactions at all), but I’m happy to deal with it …


(Allie) #167

I have to wonder how sustainable paying out cashback at rates higher than interchange is for most banks.

I expect it works with Aqua because the APR is over 40% on my card (it starts a bit under 35% but they raise it with time - and yes from what I see online they seem to raise it for almost everyone. Not for cause like other banks). All it takes is messing up one month with a decent amount of spending to wipe out all your rewards. They seem to count on that.

They also set things up to fail. One month they gave me, out of nowhere, a 1p ‘credit gesture of goodwill’. It came off my balance (I actually had spent money). The next month, out of nowhere, they took it back with a ‘debit gesture of goddwill’ (I’m not sure what goddwill is but it seems to be the opposite of goodwill in Aqua language). I had no spending that month. I had a 1p bill, but no way to pay it. They don’t allow payments under £1. I had to call them, and whilst they removed the charge as otherwise I couldn’t pay my bill (by offsetting it with another ‘credit gesture of goodwill’) she was rude and evasive when I asked how such a thing could happen. At first she claimed it was an interest charge. When I pointed out that made no sense at all, she said ‘well I’ve credited it so it doesn’t matter’. Extremely unprofessional and rude. Given I had to call and how easily I could have been hit with late charges and penalities for their nonsense ‘goddwill’ an explanation seemed the least she owed me to find out.

Not worth it for 0.5%…


(Tom ) #168

(Rob) #169

Cashback could be set to go into a pot.


(Joe) #170

Could Monzo, much like legacy banks such as Santander and Natwest do, offer cash back on our bills and direct debits - mortgage, utilities, phone, water etc? Once I get cash back, savings and more flexibility with pots and targets, I will close my Santander account and use Monzo exclusively, even if the benefits are less with Monzo!


(Andre Borie) #171

Where would that cash back money come from? Cash back on credit cards works because the interchange fees allow it, but there are no such fees for direct debits as far as I know.

Cash back is usually offered at a loss by the shitty banks to lure you in and they then make up their losses elsewhere (extra fees for pretty much everything, etc).

Monzo has a good enough product they don’t need such tactics to attract customers. :slight_smile:


(Joe) #172

I wasn’t familiar with how they made the cashback offering possible, only that it was a benefit of having the account as long as you dodnt incur any additional charges, which I never did. All I know is there are fewer and fewer reasons for me to keep my legacy bank account - a decent benefit package is the main one. I’m sure the geniuses at Monzo will come up with something the trounces the legacy banks’ offering. :slightly_smiling_face:


(Allie) #173

Interchange in Europe on consumer four party cards is very low. 0.2% debit and 0.3% credit. Thus why rewards credit cards that aren’t three party (e.g. Amex) have been killed or limited. That said, credit cards can also fund rewards from interest charges. In theory debit cards could do that with overdraft fees if enough people pay them.


(Alex Sherwood) #174

If Monzo wanted to eat into their main revenue stream, which they’re hoping will get them close to break even, yes.


(Allie) #175

Oh definitely, I’m not saying Monzo would do it! Thus, ‘in theory’ - I was simply pointing out there is an equivalent to the interest income credit card issuers can use to fund rewards (that’s how 0.5% cashback on 0.3% interchange is possible from issuers like Aqua and Tandem).

I’m actually really interested in how Tandem will sustain it. Being quite frank, not only is Tandem’s APR lower, I expect the Tandem’s target market is less likely to pay interest than the Aqua target market. It’ll be interesting to see if they maintain it…


(Alex Sherwood) #176

Great, just thought I’d mention that as I didn’t want anyone to get their hopes up :slightly_smiling_face:


(Allie) #177

LOL, definitely. I’m not sure I’d want to be a Monzo customer if they did do it. It’s quite literally, in many cases, stealing from the poor to give to the rich…


(Jamie 🏳️‍🌈) #178

But if you don’t pay fees why not keep cashback accounts open just for direct debits? I don’t miss my bills being part of my Monzo budget because they’re dead simple to take into account.

With automatic standing orders crediting my accounts, I net over a tenner a month. Easy money for doing nothing at all, and if NatWest and Barclays want to pay it out to me…


(Jamie 🏳️‍🌈) #179

It’s nothing of the sort. My cashback doesn’t literally come from the accounts of the poor.


(Allie) #180

In many cases, it does. E.g. Aqua - where do you think 0.5% cashback comes from when interchange is 0.3%? It comes from the accounts of those in debt.


(Jamie 🏳️‍🌈) #182

literally, stealing, poor and rich though.


#183

it does. The poor pay higher APR to subsidize the lower APR for the rich.


(Allie) #185

I have an Aqua card and I’m not poor. Got it when I moved back here because it’s easy to get, the only other card I could get was American Express, which has foreign transaction fees.