Chase, the digital bank owned by JP Morgan, is enhancing its popular cashback offer, doubling the reward rate to 2% for both new and existing customers from 1st July. This move also introduces a new spending category for restaurants and cafes, allowing users to earn cashback on meals out, in addition to existing categories such as groceries, everyday transport, and fuel. The maximum monthly cashback achievable will also see an increase, rising from £15 to £20, meaning customers could potentially earn up to £240 annually.
However, accessing this improved cashback scheme will require customers to meet more stringent conditions. Currently, users qualify by simply depositing a minimum of £1,500 into their Chase current or savings account each month. From July, this will change significantly. Customers will need to complete 15 or more card transactions or direct debits monthly, and crucially, maintain a minimum balance of £1,000 across their Chase saver accounts for the entire month to qualify for cashback in the subsequent month. This means simply transferring a lump sum will no longer suffice, and active engagement with the account and a sustained savings balance will be necessary.
The shift in criteria signals a move by Chase to encourage more active use of its wider product suite, particularly its savings accounts. Chase currently offers an easy-access savings account with a competitive interest rate of 4.5% AER. While the new conditions demand more from the customer, the added restaurant category and increased potential earnings could still prove attractive for those willing to adapt to the new requirements. It's important for customers to understand that the £1,000 balance must be held consistently, not just a fleeting deposit.
Compared to other offerings in the market, Chase's potential annual cashback of £240 remains competitive, though flexibility varies. For instance, the new Zopa Biscuit current account provides 4% cashback on direct debits, capped at £80 annually, alongside access to a 7% regular saver. Santander Edge offers 1% cashback on household bills, capped at £10 per month, with a £3 monthly fee, and is currently offering a £180 switching bonus. The American Express Cashback Everyday Credit Card offers an initial 5% cashback for five months (up to £125), then 0.5% on spending up to £10,000.
Consumers considering the Chase offer should weigh the benefits of the higher cashback and new category against the increased effort required to meet the new eligibility criteria. The need to maintain a £1,000 balance in a Chase saver account and make numerous transactions or direct debits each month represents a more involved commitment than the current system.
Under UK consumer rights, terms and conditions for financial products must be clear and communicated effectively. Existing Chase customers will need to be made aware of these changes well in advance of the 1st July implementation date to allow them to adjust their banking habits or consider alternatives.
Source: MoneyWeek