Blow for older travellers as Saga axes fee-free Platinum card removing their ability save abroad
A number of credit cards popular with travellers and people who like to earn rewards for regular spending are being withdrawn or replaced.
Over-50s product provider Saga is axing its popular Platinum card at the end of next month. This was a top recommendation for older travellers who wanted a good deal on holiday spending because it does not impose any fees for payments made with the card while overseas.
Andrew Hagger, from financial analysis company MoneyComms, says: ‘This withdrawal has come as a bolt out of the blue and will upset many loyal customers who have benefited from fee-free overseas purchases.’
Axed: The Saga Platinum card could be used abroad without incurring charges
The card’s withdrawal is a result of the ending of a longstanding agreement with Allied Irish Bank that issued it under the Saga label.
Saga says only a ‘small portfolio’ of Platinum card customers remain and a ‘fraction’ have outstanding balances.
If these are not cleared by the end of next month, AIB may facilitate a transfer of the debt to a third party – and the interest rate may be higher.
Saga says: ‘We are endeavouring to ensure that any customers with outstanding balances are protected and will not be left in a worse financial position.’
The company is also gearing up to offer a new credit card to replace Platinum, though no details are yet forthcoming.
For any Platinum customers looking to shift debt, the longest credit card offers that allow balances to be repaid at zero per cent interest are for 32 months. These are from HSBC and Post Office Money.
HSBC’s offer with £25 cashback is available until the beginning of next month.
Santander’s Everyday card offers a shorter term at 27 months, but there is no balance transfer fee. Sainsbury’s Bank offers 22 months and also has no fee.
When it comes to spending abroad, Hagger recommends that people with a decent credit rating and regular income should look at alternatives such as Barclaycard Platinum Cashback Plus, Halifax Clarity and Tandem.
Lloyds Bank’s Duo Avios deal is also changing from the end of next month. Currently it is one account with twin cards – an American Express and a Mastercard.
But this will be replaced with just one Avios Rewards Mastercard. The American Express card is also being dropped from Lloyds Bank’s Avios Rewards deal.
This is a result of American Express ending an agreement allowing UK and European banks to issue its cards.
There is no annual fee but the points system is changing. Under current rules customers spending £5 get five Avios points using Amex and one Avios point with Mastercard.
With the new Mastercard, the rate is two Avios points per £5. The value of an Avios point depends upon how it is used but typically it is around 1p.
The scaling back of credit card rewards is a result of a legal ruling capping the fees that providers charge shops when customers use their credit card as payment. Many generous cashback and rewards-based credit card deals vanished from the market as a result.
Previously Amex was unaffected by the ruling, but last year European courts ruled that it too was bound by the cap when it co-branded with another company such as Lloyds Bank.
The company says the changes will not affect its British Airways American Express deal, which also offers Avios points.
Hagger adds: ‘The rewards market has been decimated but there are still a few decent deals – mainly if you do a good proportion of your shop at a specific store. Sainsbury’s Bank Nectar, Asda Cashback and Tesco Clubcard are great for spending in their own stores but offer less choice on spending elsewhere.’
Before applying for a credit card, check your credit history for free with companies such as Experian or ClearScore. Providers will use this information in deciding whether to accept an application.
Also use ‘soft search’ tools provided by comparison websites. These highlight card providers likely to issue a card based on your personal information.