Halifax Cash Back

It used to be that credit cards, personal loans and current accounts were fairly straightforward and individual entities. However recently Barclaycard launched their personal loan/credit card hybrid and it seems there are more changes on the horizon with Halifax launching the UK’s first ever cashback debit card/current account. More choice for consumers is surely better but is that the case here as Halifax’s new product comes at a time when credit card companies are cutting back on cashback deals.

It seems that banks and building societies aren’t able to sustain the great cashback offers consumers have enjoyed in the past; this is likely due to the fact that those customers who pay their balance in full each month can benefit financially from cash back rates. Halifax is one of at least a dozen companies to cut their cashback rates although they claim this decision is not linked to their new product. The new Halifax account will be open to anyone with a balance of £1,000 and Halifax hopes it will bridge a gap in the market that high interest current accounts don’t cater for at the moment. Many consumers don’t qualify for high interest current accounts due to not having a high enough balance. However since the new Halifax account is open to anyone with £1,000 in their account 70% of customers can benefit from this new type of current account.

As with the new Barclaycard Combinations not everyone is as enthusiastic about this new product as Halifax is. While the way ahead in personal finance is for companies and consumers to try out new products and services is there really anything wrong with the old ones? Does combining personal finance products really benefit the consumer? According to Abbey, one of the building societies to still offer good cashback rates on their credit cards, consumers are better off shopping around for a credit card with good cashback rates and earning interest in their current account. Abbey aren’t the only ones to still offer good cashback rates. Morgan Stanley has gone so far as to have short-term offers of double cashback rates.

While most companies argue about which is the best way ahead the Co-operative Bank takes an entirely different stand. They feel the best way forward is an end to short-term offers that, while may appear attractive to consumers, banks and building societies aren’t able to make a profit on in the long term. Instead Co-operative Bank advocate realistic deals that consumers can be confident won’t change significantly over time and offer one low rate for all transactions.

It would seem that, as with Barclaycard Combinations, this new product from Halifax could work to consumers advantage but its still worth investigating whether arranging your personal finance products separately would be better for your circumstances. There is still plenty of choice out there and it’s a case of shopping around for the best credit card deal with the best cashback rates before making a decision on any new product.