Santander 123 credit card - not free for ever?

Susievintage

A year ago I opened a 123 current account with Santander. They asked whether I would like a 123 cashback credit card as well, and told me that although there was a £24 fee for this credit card, the fee would be waived for 123 current account holders. Ignore the paperwork, said the Santander person - it mentions a £24 fee, but this does not apply to 123 current account holders.

I opened both - the initial fee of £24 appeared and was refunded on the first credit card statement, and all went well for a year.

Yesterday my 123 credit card statement arrived, and there again was the £24 annual fee. I was going in to the Santander branch anyway, so mentioned in passing that I would be expecting a refund as before - but no. All of the 123 credit card leaflets now say in big letters "fee free for the first year".

It doesn't actually matter to me financially, because the branch staff agreed very readily (which is what makes me wonder....) to refund the fee and close the 123 credit card account for me. It's a hassle, now that I have to find another credit card, but I'm not out of pocket. But as they were so unsurprised and so willing to refund the fee, it made me wonder: were lots of people given the same mis-information as me, about the credit card remaining free for current account holders? Is it yet another example of mis-selling?

Th1984

I was told the same so we opened two accounts, one for me, one for my wife. Mine is now closed (with refund of fee) but it is worth keeping the other one for the £2 p/m fee.

YorkshireBoy

Susievintage wrote: »

It doesn't actually matter to me financially, because the branch staff agreed very readily (which is what makes me wonder....) to refund the fee and close the 123 credit card account for me.

I don't know what branch offers were on 12 months ago, but as I recall the 123 card has only ever been free for the first 12 months on their online offers.

It's a hassle, now that I have to find another credit card...

You'll struggle to find one as good (in terms of cashback - even after the fee) as the one you've just closed!

but I'm not out of pocket.

How much cashback (net, after the £24 fee) will you be giving up per year from now on though?

£15 a week on fuel covers the fee. If you're not a motorist (and most people are, or at least have someone in the family who is), then a £50 a week grocery spend will do the same.

Anything on top is pure 'profit'.

You don't think you were a little too hasty?

Susievintage

As a child-free couple with no car, we weren't really milking the cashback option - no petrol spend, and not a "big weekly family shop" in the supermarket. Over the year, after taking off the £24 fee, I earned £8 cashback.

It's more the principle of the thing. People mistakenly imagine that credit card fees are fair, as a way for the companies to make money from holders who (like me) pay off each month in full. They forget that the credit card companies make a handsome profit from their merchant fees - far outstripping any tiny portion they hand over in cashback.

So - on principle - I refuse to give them any more!

YorkshireBoy

Susievintage wrote: »

It's more the principle of the thing.

So - on principle

I suspected it was, and nearly said in my earlier post that principles usually cost money. In your case it's £8 plus the "hassle" (your word ) of getting another card.

YorkshireBoy

Susievintage wrote: »

They forget that the credit card companies make a handsome profit from their merchant fees - far outstripping any tiny portion they hand over in cashback.

I think you're forgetting that Santander Cards Limited (or whatever they're known as these days) will probably take less than 0.5% to 1% of the merchant fees. Don't forget, there are a lot of people taking a cut here, eg the retailers merchant acquirer, Mastercard, etc.

In effect, they'll be losing money on a lot of their customers like yourself. That should make you feel even better! Or at least should have...because by closing your account it looks like you'll be saving them money now.

Susievintage

Principles generally do cost something - money, hassle, time - but it is for the good of us all that some people do have, and abide by, them.

As so often on this forum, I end up wishing I hadn't asked!

bengal-stripe

Susievintage wrote: »

As so often on this forum, I end up wishing I hadn't asked!

How boring would life be, if everyone agreed with you?

Susievintage

I think what is frustrating is how easily these threads are derailed.

I didn't actually ask whether having a cashback card is a good idea, or worth it for me, or good business for the credit card company, but only whether anyone else had been given the same misinformation by Santander!

That's what makes me wish I hadn't asked - because the question just gets lost under lots of opinions about vaguely related issues!

Hominu

I completely agree with you, vegetable soup is far better than tomato.

michaels

Having cancelled can you not then apply for another one which will be free for the first year?

In fact do you even need to cancel first, can you only have one 123 credit card?