For a long time, our recommended credit card for overseas use was from challenger bank Tandem Money.
It was a great product. There was no annual fee, you paid nothing in foreign exchange fees and you got 0.5% cashback on all of your spending – even your foreign spend.
This was clearly a loss leader for Tandem which couldn’t continue. The card was withdrawn for new applications late last year. Existing cardholders received an email yesterday explaining that they are losing it too unless they pay a fee.
From March, cardholders have two options – they can either pay a £5.99 monthly fee to retain their card, or the card will be cancelled.
For most people, it will be ‘bye bye’ to Tandem Money.
If you have a bit of cash sitting around, there MAY be something for you.
The £5.99 fee also allows you to open a Tandem Money savings account with a ‘top of the market’ interest rate of 1.5%. You can invest up to £250,000 although I doubt you would want to risk more than the £85,000 that is Government-protected in case of default.
If you DO have £85,000 in cash, there is an interesting angle here:
Invested in Tandem Money at 1.5%, you would receive £1,275 gross in interest
The best alternative deal at the moment is probably Marcus at 1.35% (£1,147 of interest)
You would be paying a £72 annual fee for your Tandem Money account BUT you would be receiving £128 more of gross interest. Knock off tax at your marginal rate and you should be roughly quits, which means that the credit card benefits are all upside.
There is one more quirk as well. From March, the interest rate on the Tandem credit card will be 0%. Forever. Tandem is basically offering you a 0% loan as long as you pay your £5.99 monthly fee.
You can find out more on the Tandem Money website here.
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