M&S Bank to slash credit card reward points
M&S Bank the latest credit card provider to cut rewards due to interchange fee cap.
M&S Bank will cut rewards points on the M&S Credit Card by 60% from 29th February.
Cardholders will only receive one point for every £5 spent outside Marks & Spencer, reduced from the current system where you get one point for every £2 spend.
M&S has confirmed that none of its other terms are changing, so you’ll still get a point for every £1 you spend in-store.
Find out more about the M&S Credit Card at the loveMONEY credit card centre
Why is it being cut?
M&S Bank is blaming the new interchange fee cap which was introduced in December 2015 and controls how much card providers can charge retailers for processing credit card and debit card payments. The limit is 0.3% for credit cards and 0.2% for debit cards.
Since the change, a succession of rewards schemes have been changed or scrapped entirely, with card providers arguing they simply cannot afford to continue them. RBS/Natwest, Capital One and Tesco Bank all cut rewards last year.
Other financial bodies argue that the cap will save cardholders money in the long term. The UK Cards Association estimates that £900 million of savings should be passed on to customers. That's all well and good, but the cap has also dented the appeal of rewards and cashback credit cards.
You can find out more by reading The credit rip-off that should have stopped.
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Comments
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Basia, I don't think that miscalculating the value to consumers is unique to the EU. It would be just as bad if not worse if we were outside it.
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Whilst we loose out on 'points' all the evidence suggests that the money saved is being recovered by banks by putting up other charges, and the retailers hanging onto the money. EU miscalculates the benefit to consumers again - another reason to get out.
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18 February 2016