Tandem Bank to charge customers monthly membership fee
UK challenger bank Tandem is introducing a £5.99 monthly fee from March 2020 for users of its cashback credit card.
Customers are being asked to sign up to the new programme before it launches on 9 March. Those who don’t will be unable to use their cards and will see their credit agreements closed with the bank.
Payment of the monthly fee will give customers access to a Tandem Membership group, which offers a 1.50% annual equivalent rate (AER), no interest on cash withdrawals abroad, and a standard interest rate drop to 0%.
“For a monthly fee of £5.99, you’ll gain access to all these benefits,” Tandem writes in an email to customers. “If you choose to become a member, your existing credit agreement will change starting on 9 March 2020.
“If you choose not to become a member, you can use your card as normal until 9 March 2020. After this date, you will no longer be able to use your card and your credit agreement will end when your balance is repaid in full.”
The fees will not affect savings account holders at the bank.
Customers have taken to social media, many of them confused over what they see as a sudden introduction. One wrote: “I’m really sad that I have been left no option but to basically pay for a credit card that I’m very happy with.”
Many Tandem customers publicly announced on Twitter that they would quit the start-up following the changes. One customer wrote: “Looks like it’s time to cut up my @Tandem_Bank card. It was fun whilst it lasted.”
Plans for a membership fee at Tandem have been on the cards since last year, when the bank announced that it would be taking the cashback credit card off the market in the near future in favour of a fee-paying scheme.
Ricky Knox, CEO of Tandem, says of the new membership programme: “We want to continue to offer products and services that make a real difference to our customers, but we also need that offer to be sustainable.
“That’s why we’re taking the opportunity to test a membership model that preserves all of the benefits of the cashback card and more.”
A Tandem Bank customer, who passed the customer email to FinTech Futures, said: “I signed up to Tandem 18 months ago when I was looking for my first credit card. The main reason was to improve my credit score by showing that I could regularly pay off the balance in full.
“I have been casually following the rise of challenger banks over the last few years, and the idea of a fully online experience appealed to me.
“However now I’ve learned that I’ll have to pay a monthly fee to keep a credit card with Tandem. I will almost certainly cancel my account now, because I am sure there will be other companies offering a similar experience, but without fees.”