TSB offer credit card cash back
SOME TSB current account holders are being given the chance to earn up to £60 a year in cash back on some of the bank's TSB MasterCard credit cards.
Classic Plus account holders who take out one of the three eligible credit cards will be able to earn 1% cash back on the first £500 of credit card spend every month, and 5% cash back on the first £100 spent using Apple Pay.
Both new and existing customers can take advantage of the offer by signing up to either the Platinum Purchase (cost of credit), Low Rate Advance (cost of credit) or Student (more details) MasterCards.
Cash back will only be available for a set time - existing account holders and those earning cash back via Apple Pay will only have until the end of December this year, for example.
Those who've opened their Classic Plus accounts since the start of this month, however, will be able to earn up to £5 back every month until the end of September next year.
The cards offering cash back
Each of the cards on which cash back can be earned is suitable for different purposes or uses.
The newest of the three, TSB's Platinum Purchase credit card offers 20 months interest free on purchases and balance transfers for those who keep to the terms and conditions.
Promotional rate aside, the card offers a purchase rate of 18.9% APR representative (variable), depending on individual circumstances.
TSB's Low Rate Advance MasterCard credit card may not seem as immediately attractive, offering as it does a purchase rate of 7.9% APR representative (variable) - but as we explain further in this guide, low rate cards can be very useful.
The Student MasterCard is only available to people aged over 18 with a TSB Student Current Account - but there's nothing to stop them also being named on a Classic Plus account, say as a joint account holder.
It has the highest interest rate of the three cards, with a purchase rate of 19.9% APR representative (variable). There's more on the cost of credit with the Student MasterCard here.
More cash back
TSB have made it clear that taking advantage of the credit card cash back deal won't affect any of the perks that come with the bank's Classic Plus account - which include yet more cash back.
Current account holders can earn 5% cash back on the first £100 spent contactlessly each month, whether using their card or Apple Pay - which can earn them up to £60 over the course of a year.
The offer has been running since September last year, and at present it'll only continue until December 31st 2016 for accounts opened before the start of this month.
As with the credit card cash back offer, customers who opened their account after June 1st will find they can earn contactless cash back until September 30th 2017.
If they can juggle their spending correctly, existing Classic Plus customers could still earn up to £60 cash back by the end of the year - earning up to £5 a month on contactless payments with their debit card, then earning more cash back by using their new credit card.
As mentioned above, for those who aren't in the habit of spending £500 a month on a credit card, TSB have added another way for some customers to earn cash back.
Cardholders with an iPhone or Apple Watch can earn 5% cash back on the first £100 of Apple Pay purchases they make each month - but this method of earning cash back is only available until the end of December.
New versus old
Given that both cash back deals terminate at the end of this year for existing customers, it may not seem worth taking out a credit card for just over £30 in cash back, unless we're willing to juggle as above.
After all, we can earn much more than that simply by switching accounts.
Although new customers get a slightly better deal, they can still only earn a maximum of £140 in cash back before the deal ends.
Doing this would require spending at least £7,000 on one of the cards, or a minimum of £1,400 with the card via Apple Pay, by September 2017.
By contrast, simply switching to a Co-op current account could earn them £150 at the moment.
Nevertheless, the TSB Classic Plus account does have one other trick up its sleeve; namely, the high rate of interest paid on in-credit balances.
The first £2,000 in the account earns a market leading 5% AER, although customers must pay in a minimum of £500 a month to get it.
TSB say that someone with an average balance of £2,000 over the course of the year will earn interest of £97.80 during that time - quite a sum given that even dedicated savings products such as ISAs are paying less than 1%.
Eggs in a basket
The decision by TSB to offer credit card cash back to particular current account holders is a fresh spin on a commonly seen tactic from all manner of service providers - tempting us to do more of our business with them rather than someone else.
It's not unusual for banks to offer existing customers preferential rates on savings accounts and credit cards - and it can certainly be more convenient for us.
One potential pitfall is the fact that financial institutions are within their rights to move money around a customer's various accounts to pay off outstanding debts.
So, for example, someone who has both a credit card and current account with the same provider could find money being taken from their current account to pay for a missed payment on their credit card.
What's more, the banks don't have to tell us when they're moving money between our accounts, which can make it difficult if sums we've earmarked for something - like rent - suddenly disappear.
If the act of "setting off", as the banks call it, pushes the current account into overdraft, that will immediately wipe out that month's benefits - as the Classic Plus account doesn't pay interest in any month in which the account goes overdrawn, and there's a £6 fee for accessing the overdraft facility, even if it's authorised.
Although many people thinking of getting one of the TSB credit cards to go with their Classic Plus account shouldn't need to worry too much about setting off, it's worth being aware of.
For those who can keep to the number one rule regarding credit cards - to pay off the balance in full every month - it'll never be a problem.
But too many of us find that we're eligible for 0% deals such as that offered by the Platinum Purchase card then mess them up by overspending, or failing to make a payment on time.
Losing the promotional rate can be enough of a shock, without also finding our current account balance is lower than we might have been expecting.