To those who wish to try to compare their 1.5% saving offer is like purchasing a kids magazine for £5 which comes with a free toy worth only £1 and trying to claim they purchased a £1 toy for £5. It is a crazy comparison as you need to look at the total package.
With the 0.5% cashback, they are not going to be making any money especially with the interchange rates have fallen below the 0.5% cashback rate. These new EU rules came in after the lunch of the Tandem credit card offers, so it is no surprise they have now decided to review their product line.
They could simply keep the package but abolish the 0.5% rate, but their new offering would be identical to their Journey Card and does not make any commercial sense having two similar products on the market. You may argue the Journey card offers an interest rate on purchases of 24% but according to their FAQs pending on your credit rating interest for this product can be as low as 16%
Then the argument that they can simply transfer customers over to this Journey card product, the chances are this is a product being supplied by a third party and Tandem are simply distributors (The terms and conditions for this product are different). It has been explained by the CEO on twitter that due to system limitations they are not able to transfer customers over to this product.
As Tandem is a newcomer to the market, it is more than likely the number of customers paying off their card at the end of each month far exceeds the reported average 80%. It could be the case Tandem only makes money from 15% of customers who in return is paying the operational expenses for the other 80-85% of customers. It looks as if Tandem has decided to focus on this 15-20 % of customers, offer them a fantastic deal at the expense of the 80%.
With credit card rates increasing from 15% to 25% in the last few years (I have an old Cahoot credit card still unchanged at 9%) and bank overdrafts increasing to 40% on average, Tandem £5.99 offer could be considered is very attractive indeed to the 20% of customers who do not pay of their credit cards off each month but wish to spread the cost of their purchases…
IF it is the case that most credit card companies only make money from the 20% then it won’t be long for other credit card providers start to follow the example of Tandem.
For a lot of us, we only use our credit cards if we desire to pay off our purchases over several months.
Why do you think Tandem decided to withdraw their product?
Vast majority of us at some point in our lives will borrow money most will take small loans but with Tandem new product is ideal especially for the 20% and an alternative to these small insecure loans offers.
0% cards are only evaluation and taking out multiple 0% cards can have a massive hit on ones credit rating. You have not really come up with an alternative to Tandems new product offering…
Looks to me as if they have had trouble raising new funds from venture capitalists - certainly less then they expected.
Also, they appear more interested at the moment in expanding overseas, so I would guess the reason for closing the credit card is that they don’t have enough capital to maintain the size of their userbase and fund their plans.
If you search YouTube you will actually find their CEO promoting cashback cards and encouraging people to pay it off each month.
I suspect the continuous borrowing on Tandems new product is going to considered poorly by other lenders when it comes to further borrowing.
As for applying for 0% credit cards… not sure what you mean by evaluation in this context but why would you apply for multiple cards at once unless you have a debt problem?
As for an alternative - have got tried saving and budgeting for things and/or living within your means? As this is the Monzo forum, perhaps use pots…
Having said that, you can get loans for less than 3% from firms as well.
Tandems new product offering seems to be largely for the financially illiterate or lazy imo.
If, for a given level of borrowing, the £5.99 works out cheaper than the interest the customer would be paying elsewhere then it maybe an acceptable way to borrow. The problem is that as they pay off the debt the interest rate effectively rises (since the charges remain the same) making the whole experience less and less sensible the smaller the outstanding balance gets.
This should not be taken as advice to then borrow more so as to keep the apparent interest rate down!!!
If the customer ends up borrowing nothing at any point in time then the fixed fee approach is simply a crazy idea.
It is clever, I’ll give it that, but it really, really isn’t a good (or economically sensible) way for the majority of people to borrow money.
I’m not so sure. I wonder how long it will take for the FCA to clock it, being that it flies in the face of current ‘fair’ practice for no monthly or daily fees for borrowing. (I know that is for overdrafts, but the logic that the FCA claims is that these obfuscate the real cost of borrowing and this surely applies here?)
Annual fees on credit cards are not unheard of, just most give you something for it, but still charge your APR.
The FCA regs only scoped current account overdrafts, not credit cards.
I find it curious that with less than a month before my card is turned off, I litterlly have had no in app notifications at all, not even a banner in app when I log in. relying on an alone is going to cause them all sorts of grief with customers who failed to read it for one reason or another. And 99% of customers are not as up to date as us forum users won’t have seen it if they failed to see the email.
Nope, both me and the wife will close or accounts. It’s a shame as we each use them to put a couple of grand a month on for work expenses. I think we aren’t their ideal customer as we pay in full each month when our respective employers reimburse us.
Just got an email from them telling me that my account will be blocked on the 9th of March and giving out more details on how and when they will close the account.
It is interesting that they are recommending applying for a credit card elsewhere if looking for a daily alternative.
They also suggest to use the previously communicated link if I would want to upgrade. It’s strange that they did not include it once again.
This is fascinating. Sounds like it is a one-time offer
If I close my account can I re-apply at a later date?
No. Once the account has been closed, Tandem Membership will no longer be available but please bear in mind you do have until 9th March 2020 to make a decision.
I got my email this morning. I’m more than happy to leave. Bog-standard card, poor service, lots of unhappy crowd investors.
No idea on what to replace it with. Have been on the JAJA list for what seems like an eternity and I’m on Android so Tymit’s not an option yet. It’s only a back-up for my Amex, but want a decent app, Android Pay and preferably some sort of reward, however miserly.
Something I have noticed today though is an anomaly with my spending.
Last month, I manually paid off the card in full just before the direct debit was due.
Unfortunately, this was a little bit too late to prevent the direct debit coming out also.
This put the card in credit by about £185.
Not a problem I thought, just spend on the card until the balance is zero and before 9th March.
I know a couple of days ago, my card was still showing about £60 in credit
I filled up the car (not pay at pump) on my way home today, spending £35.23.
My account now shows C/C balance of zero (as it should as I am still in credit), but the amount available is showing the £35.23 less than my total credit limit.
