Halifax customers will soon be able to earn cashback through their current accounts, ahead of a new fast-track switching system due to launch in September.
Halifax's new Cashback Extras scheme will allow current account customers to earn between 5% and 15% on selected items at 16 high street brands including Argos, O2, and Morrisons, by using their debit or credit cards.
The new feature will see the Halifax account compete against Santander’s 123 current account, which offers three tiers of cashback as well as interest on credit balances.
The new scheme also responds to the RBS Group (inc. NatWest), which recently announced its own 1% cashback deal with 11 retailers including Cineworld, BP, and Tesco (read more).
Halifax is to compete with Santander and the RBS Group by offering cashback on current accounts.
Participating Retailers With Halifax (listed alphabetically)
- Argos
- Domino’s
- Glasses Direct
- Hertz
- Homebase
- Marriott
- Morrisons
- New Look
- O2
- Oasis
- Ocado
- Play.com
- Pets at Home
- Q-Park
- The Body Shop
- Urban Outfitters
Cashback Comparison
There will be no cap on how much cashback can be earned, and Halifax believes that customers could easily rack up over £100 per year. But the mechanics for customers appear to be more complicated than those of rival banks.
Firstly, offers will be restricted to what Halifax deems relevant to the account holder, which makes the offer distinct but potentially more frustrating for customers if the goods or services of their choice are excluded.
Customers must then log on to their internet banking account and activate the deal ahead of their shopping. Some retailers will require the customer to reactivate the offer on each occasion.
But the cashback percentage (5%-15%) is substantial, especially compared to the 1% being offered by RBS and NatWest. For the organised and technologically savvy, this offer, alongside the £100 switching incentive, could entice customers that are dissatisfied with their bank to switch once the seven-day switching system launches next month.
Find out more about the new fast-track switching system for current accounts.
Santander’s cashback offering, though lower than Halifax’s proposed offer (between 1% and 3%), covers most areas of essential spending, such as household bills, council tax, and grocery spending at supermarkets.
This means that customers are always likely to benefit in some way from the cashback offer, even during periods when customers are not indulging in non-essential spending. See a full review of the Santander account here.
It will be for consumers to decide which kind of account would suit them best, if cashback is an appealling feature.
But the emergence of more deals is further evidence that the new switching system is boosting competition in the current account market, and these new offers could yet improve if more retailers are prepared to join the new cashback frenzy.
Keith McDonald
Which4U Editor
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