In a remarkable example of consumer power, the eight million holders of Barclaycard have forced the credit card operator to back down on plans to scrap the most attractive parts of its Reward loyalty points scheme. In what is turning out to be part of a wholesale reshaping of credit card perks, Barclaycard holders woke up earlier this year to the apparent worthlessness of their Reward points, despite many people saving for years for coveted big-ticket prizes.
After anguished calls from Barclays branches to head office about angry customers, Barclaycard extended the deadline for scrapping the points system by three months to 31 July. Barclaycard's spokesman, Mark Gonnellar, says: "We have also removed the £10 annual fee and lowered the APR. Many cardholders never used their points, and only air miles can no longer be utilised."
Then this month Barclaycard retreated further. It admitted: "Some of our longer-term cardholders have asked us to reintroduce our flights and wine offers for which they have been saving points. Consequently, in response to demand and having already extended our flights offer from May to July, we will be reintroducing flights and wine offers in our next catalogue in October. These offers will remain open for six months to allow people sufficient time to redeem their points."
Barclaycard's UK managing director, Peter Crook, said: "Having listened to our customers, we are sorry that a number have been disappointed, so we are reintroducing two of our most popular offers."
But Barclaycard is pressing on with a replacement scheme not dissimilar from benefits already available with the cards Barclaycard administers for the National Union of Students, where rewards range from 50 per cent off Virgin train fares to unmetered internet access.
Other banks, too have found that their loyalty schemes have met with a mixed response, prompting a re-vamp. HSBC is also abolishing points on its MasterCard, but rather differently. It announced the move to its two million cardholders, plus some with Visa cards, in July, giving them until 31 October to redeem the points or donate them to charity. HSBC's spokeswoman, Caroline Harris, said: "We found that by no means everyone was aware of rewards, and only one cardholder in three ever redeemed the points."
The banking giant is also introducing a triple scheme whose details have yet to be unveiled. Apart from seasonal offers, there will be discounts on services such as travel cover, and cardholders can enter competitions with prizes that include a Jaguar car. The Peugeot card also issued by HSBC can be used towards buying that brand of car.
Lloyds TSB is already geared to travel, with perks that seem unlikely to be altered soon. Holders of its free Visa and MasterCards can take advantage of five schemes, including holiday discounts at First Call, which trawls through 50 companies. The cards also offer what are effectively half-price deals with Thistle Hotels and Hertz cars as well as Hoverspeed and British Midland
Three banks in the Royal Bank of Scotland group are staying with air miles on their cards. Coutts Classic and Ulster's Visa and MasterCards add one point for every £20 spent and those from NatWest also give a double bonus when used at Shell or Sainsbury. NatWest's spokesman, Nicholas Gill, says: "These have been very popular with our five million cardholders over the past 10 years, and they can now be extended to hotels and leisure."
NatWest also discounts interest on balances transferred from other cards, and other issuers do rebates anyway. Cards from Halifax provide cashback of 1 per cent up to £1,000. Alliance & Leicester returns 0.5 per cent on purchases up to £4,000 then 1 per cent for the next £16,000. There is even Double MoneyBack for using the card at certain outlets.
Benefits on other cards are geared to specific stores. Visa from Budgens gain points at its checkouts, and Egg has a similar link with 200 top retailers. Goldfish from HFC Bank gains points at a dozen of them such as Dixon, Halfords and Curry's.
The same issuer has extended the points to British Gas bills, while the most obvious one for electricity bills is the Bank of Scotland's Open & Direct Energy Visa Card. This also allows various retail and travel points to be credited at a dozen companies such as Rite Price and Irish Ferries.
The priority remains basic conditions, starting with the rate and any fee. Co-op's Visa was always free, but there are 68 other cards with few frills. Many provide free cover for travel accidents up to £100,000 and some go to £250,000 and above.
Moneyfacts magazine publishes a list of 100 permutations of perks that come with 42 types of credit or charge card. These range from dot.com deals on the GM card to ones with Hilton and Eurostar on the Green Amex card. Ten cards, including American Express, still provide air miles, and Diners Club offers access to airport lounges.
Elizabeth Chettleburgh, of Moneyfacts, says: "The value of extras depends on how you aim to use the card. Big spenders living on credit will look more at APR and maybe rebates, and free purchasers' protection is always a key benefit. Points are for steady users who pay the whole bill each month."Reuse content