Credit cards drop freebies to claw back profits

Credit Card companies are increasingly withdrawing their free add-on extras such as travel and purchase-protection insurance, according to
www.moneysupermarket.com, the financial-services comparison website, in a bid to claw back profits in an increasingly competitive market.

Credit Card companies are increasingly withdrawing their free add-on extras such as travel and purchase-protection insurance, according to www.moneysupermarket.com, the financial-services comparison website, in a bid to claw back profits in an increasingly competitive market.

With many credit cards now offering extended interest-free periods of up to 12 months, and much lower standard rates than ever before, the last few months has seen many providers withdrawing some of the traditional free extras. Barclaycard, HSBC, Halifax and Lloyds TSB are among a string of providers who have scrapped free-insurance offers for their credit-card customers in recent months, to focus on competing on price.

Stuart Glendinning, the director of credit cards at www.moneysupermarket.com, blames the recent introduction of new regulations governing insurance sales for the withdrawal of free insurance products. "For the 77 per cent of consumers who pay off their balance in full each month, the free perks that credit cards offer can prove very attractive," he says. "The withdrawal of these fringe benefits by some leading card providers is a disappointment, and evidence of well-intentioned regulation having an adverse impact on consumer choice.

"I believe that the withdrawal of free insurance perks on credit cards, as well as other types of financial products, such as current accounts, is likely to be a growing trend hereon in, with many other providers following suit." Credit-card companies have also been cutting back on perks such as cashback. Most recently, Alliance & Leicester announced that it was axing its money-back deal, which gives customers 0.5 per cent cashback on their purchases.

Mr Glendinning continues: "As the cost of insurance regulation hits card-providers, and many choose to withdraw the perks, consumers should check that they are getting the best package from their provider. New customers may wish to consider other types of rewarding credit cards, such as those offering cashback or reward points, while existing customers should check their contract and be careful not to rely on any insurance cover that has previously been given."

He adds that the days of 0 per cent deals for balance transfers and purchases may also be numbered. An increasing number of providers have started introducing fees on balance transfers to recoup some of their losses.

Arts and Entertainment
Dakota Johnson as Anastasia Steele in Fifty Shades of Grey
film
Sport
Bafetibis Gomis of Swansea City is stretchered off at White Hart Lane
football
News
Jerry Seinfeld Comedians in Cars Getting Coffee
peopleSitcom star urges men to be more supportive of women than ever
Life and Style
Living for the moment: Julianne Moore playing Alzheimer’s sufferer Alice
health
News
Jay Z
businessJay-Z's bid for Spotify rival could be blocked
Sport
footballLouis van Gaal is watching a different Manchester United and Wenger can still spring a surprise
News
The spider makes its break for freedom
VIDEO
Voices
A propaganda video shows Isis forces near Tikrit
voicesAdam Walker: The Koran has violent passages, but it also has others that explicitly tells us how to interpret them
Arts and Entertainment
books
News
people
Sport
Ashley Young celebrates the winner for Manchester United against Newcastle
footballNewcastle v United player ratings
Life and Style
love + sex
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Graduate Application Support Analyst

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Reach Volunteering: External Finance Trustee Needed!

    Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

    Christine McCleave: FP&A Analyst

    £36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

    Recruitment Genius: Sales Executive - OTE £40,000

    £15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

    Day In a Page

    War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

    Baghdad fights to win back Tikrit from Isis – but then what?

    Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
    Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

    What is it like to live with Alzheimer's?

    Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
    The Internet of Things: Meet the British salesman who gave real-world items a virtual life

    Setting in motion the Internet of Things

    British salesman Kevin Ashton gave real-world items a virtual life
    Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

    Election 2015: A dead heat between Mr Bean and Dick Dastardly!

    Lord Ashcroft reveals latest polling – and which character voters associate with each leader
    Audiences queue up for 'true stories told live' as cult competition The Moth goes global

    Cult competition The Moth goes global

    The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
    Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

    Pakistani women come out fighting

    Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
    Leonora Carrington transcended her stolid background to become an avant garde star

    Surreal deal: Leonora Carrington

    The artist transcended her stolid background to become an avant garde star
    LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

    Education: LGBT History Month

    Pupils have been discussing topics from Sappho to same-sex marriage
    11 best gel eyeliners

    Go bold this season: 11 best gel eyeliners

    Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
    Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

    Cricket World Cup runs riot to make the event more hit than miss...

    The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
    Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

    Katarina Johnson-Thompson: Ready to jump at first major title

    After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
    Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

    Climate change key in Syrian conflict

    And it will trigger more war in future
    How I outwitted the Gestapo

    How I outwitted the Gestapo

    My life as a Jew in wartime Berlin
    The nation's favourite animal revealed

    The nation's favourite animal revealed

    Women like cuddly creatures whilst men like creepy-crawlies
    Is this the way to get young people to vote?

    Getting young people to vote

    From #VOTESELFISH to Bite the Ballot