The past year has seen an increasing number of the UK's credit card providers either withdrawing or reducing their spend-based loyalty rewards, with the latest casualty being the original rewards-based card from Sainsbury's Bank, now relaunched as a limited-time 0% interest card.
The UK-based financial research firm Moneyfacts Group Plc poses the question: Are credit card incentives on the way out? With Sainsbury's Bank being the latest in a long line of credit card providers to withdraw loyalty or cashback reward schemes, the answer may be that it is the end - or certainly could be, if the trend continues.
Over the past year there has been a growing trend for institutions to withdraw these incentives that they once used as a means to lure customers away from their competitors. Samantha Owens, head of research for Moneyfacts, said: "It is now becoming increasingly difficult for customers to find a card that offers them the kind of benefits that were commonplace a year ago."
Not only have cashback deals been severely cut, or in a number of cases totally withdrawn, but incentives such as Nectar points are also less widely available (particularly since Barclaycard announced its withdrawal from Nectar).
Loyalty scheme cuts
And with 0% interest deals reportedly costing the card industry in excess of 1 billion per year, and many high street banks reporting a steep increase in bad debts, Moneyfacts was not surprised to see credit card providers taking measures to reduce their costs.