How does the idea of a free credit card which has NO foreign exchange fees and pays you 0.5% cashback on all your spending sound?
Tempting, I imagine, which is why we thought we would take a closer look at a new card product today even though it has nothing to do with ‘miles and points’. With the closure of the Lloyds Avios Rewards credit card to new applicants, there is no longer a rewards card out there which has 0% foreign exchange fees when you are travelling.
Step forward Tandem Money. This is another new(ish) challenger bank which runs its business via an app instead of outlets on the high street.
Tandem’s first product was a money management app, helping users to manage their money. The app pulls data from your bank accounts and calculates your available spending money by subtracting bills from the balance. It also warns users of higher bills and finds better deals.
The reason there hasn’t been a real banking product until now is that Tandem has had some bank licence issues.
Having initially gained a banking licence in 2015, Tandem lost it in March 2017 due to House of Fraser – of all people – pulling out of agreed funding due to issues with HOF’s new Chinese owners.
However, in January 2018 Tandem Money bought Harrods Bank (yes, Harrods had its own bank with a branch inside the store) and thereby got a bank licence back. This allows Tandem Money to launch savings accounts in the future.
Tandem Money has now launched its first real product – a credit card with no FX fees and 0.5% cashback.
The Tandem credit card is a Mastercard and offers 0.5% cashback on everyday spending in the UK and abroad.There are no FX fees when you are travelling which save you 2.99% compared to the fees on the average UK credit or debit card.
In comparison, the Lloyds Avios Rewards card is the only loyalty credit card which doesn’t charge FX fees. With the Mastercard you earn 0.2 Avios per £1 spent and with the American Express card 1.25 Avios per £1. The Lloyds Avios American Express card remains the best deal for spending abroad but Tandem – with 0.5% cashback – is more attractive than earning 0.2 Avios on the Lloyds Avios Rewards Mastercard.
Tandem also imposes no fees for cash withdrawals abroad though you do have to pay interest from the moment you take out the money.
The Tandem cashback is added to your statement each month. It genuinely could not be easier.
Let’s be honest. With interchange fees of 0.3%, to me this credit card clearly seems financially unsustainable for Tandem, although Tandem claims that the credit card is profitable, and I’m assuming that this is just a way of luring in new customers.
Tandem Money has a fixed term savings account in the pipeline which will exploit its new banking licence (you don’t need a banking licence to issue credit cards) and will be trying to get its credit card customers to eventually move their savings to Tandem as well.
Whether or not the card is unsustainable is not your problem though! If Tandem is willing to run up large losses then you should take advantage of them until their funding runs out as your money is not at risk.
Want to earn more points from credit cards? – September 2021 update
If you are looking to apply for a new credit or charge card, here are our September 2021 recommendations based on the current sign-up bonus.
The following offers will end soon:
- 2,000 Virgin Points on Virgin Atlantic Reward Mastercard (ends 15th October)
- 30,000 Virgin Points on Virgin Atlantic Reward+ Mastercard (ends 15th October)
- 10,000 Avios on British Airways American Express (ends 2nd November)
- 40,000 Avios on British Airways American Express Premium Plus (ends 2nd November)
- 60,000 points on The Platinum Card from American Express (ends 2nd November)
- 30,000 points on American Express Preferred Rewards Gold (ends 9th November)
Here are the top current deals:
British Airways American Express
10,000 Avios for signing up, no annual fee and an Economy 241 voucher for spending ….. Read our full review
British Airways American Express Premium Plus
40,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review
American Express Preferred Rewards Gold
Your best beginner’s card – 30,000 points, FREE for a year & two airport lounge passes Read our full review
The Platinum Card from American Express
60,000 points and an unbeatable set of travel benefits – for a fee Read our full review
Virgin Atlantic Reward Mastercard
The UK’s most generous free Visa or Mastercard at 0.75 points / £1 Read our full review
Virgin Atlantic Reward+ Mastercard
30,000 points bonus and the most generous non-Amex for day to day spending Read our full review
Earning miles and points from small business cards
If you are a sole trader or run a small company, you may also want to check out these offers.
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
American Express Business Platinum
40,000 points sign-up bonus and a long list of travel benefits Read our full review
British Airways Accelerating Business American Express
60,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review
Capital On Tap Business Rewards Visa
The most generous Avios Visa or Mastercard for a limited company Read our full review
For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending: