Capital One is pulling its rewards credit cards from today, June 1.
The move follows the EU’s introduction of a cap on debit and credit card transaction fees meaning that card companies now earn less from cards being used either online or in store. And Capital One, as opposed to passing these cuts onto the consumer as savings are shutting down their attractive (but costly) rewards to compensate.
The writing could be on the wall for reward cards
David Mann at uSwitch.com, says: “The writing could be on the wall for reward cards if other lenders take the lead from Capital One. The EU cap on fees – which was initially heralded as a win for consumers – has become a double-edged sword. Instead of helping protect people from high charges, it may have brought about the end of free rewards for savvy card users as card providers try to make up for lost revenue.
“For anyone who pays off their balance in full each month, these cards can give you a regular bonus. Our own research shows that almost two million Brits have enjoyed a free holiday this year thanks to the rewards they’ve racked up," he adds.
Capital One is refunding customers if they have paid their annual fees for the card.
The good news is that there are still plenty of great deals out there, such as the American Express Platinum Cashback Everyday and Santander’s 123. But with RBS also pulling its cashback offer in September, you’ll have to be quick to get your hands on one before the plug is pulled.
To compare reward cards click here.