Credit Card News

Two of the cards eligible for this offer come with a non-sterling transaction fee of 2.95%.

Santander has launched a 1% cashback incentive on its Mastercard credit cards for spending abroad between 13 June and 18 September. To qualify, customers must spend at least £500 in foreign currency during their holiday.

“For many of us, this is our first summer holiday abroad for two years, and to celebrate we’re giving our Mastercard credit card customers cashback on their holiday spending,” said Matt Hall, Head of Cards and Loans at Santander UK.

However, those looking to make use of the provider’s Everyday credit cards to access this incentive can expect a non-sterling transaction fee of 2.95% on their purchases. The other cards on offer, which include the All in One Credit Card and World Elite Mastercard, do not hold any additional fees.

Travel agent and airline spending are at their highest since the beginning of the COVID-19 pandemic.

Just over one in five Brits are planning on taking a holiday during the upcoming Queen’s Jubilee weekend, according to Barclaycard’s latest Consumer Spending Index. Of this number, 84% of respondents are planning a trip abroad.

“While concerns around rising household bills may continue to hamper spending on non-essential items, the upcoming Platinum Jubilee Weekend and summer months should provide opportunities for Brits to spend on celebrations and make the most of warmer weather,” said José Carvalho, Head of Consumer Products at Barclaycard.

In addition, travel agent and airline spending saw their biggest monthly expenditure since the onset of the COVID-19 pandemic in 2020.

Despite this increase, compared to April of 2019, travel agent spending in the same month this year was down 3.5%, while airline spending was down 9.9%.

“The improvements seen by airlines and travel agents are particularly positive, and hopefully point to a recovery in spending on international travel later this year,” said Carvalho.

The UK’s biggest Buy Now Pay Later provider will share its customer debt and payments with Experian and TransUnion from 1 June.  

From 1 June, Buy Now Pay Later (BNPL) provider Klarna will start sharing its customers payments made on time, late payments, and unpaid purchases with credit reference agencies.

Experian and TransUnion will be the first credit reporting agencies to receive this information.

This means that if a consumer falls behind on any repayments, their credit score will worsen. Equally, if a consumer repays their debts on time their credit rating will improve.

“It is alarming that UK consumers are still being forced to take out high cost credit cards to demonstrate they can use credit responsibly and build their credit profile,” said Alex Marsh, Head of Klarna UK.

“That will start to change on 1 June this year as the vast majority of the 16 million UK consumers who make Klarna BNPL payments in full and on time will be able to demonstrate their responsible use of credit to other lenders.” 

The move comes at a time when the BNPL market is facing pressure from lobbyists to be regulated. In February, Klarna, Clearpay, Openpay and Laybuy all changed terms in their contracts after pressure from the Financial Conduct Authority (FCA).

Currently, if a customer falls behind on their Klarna repayments, their credit score will remain unaffected. Instead, they will be referred to a debt collection agency.

This is common with other BNPL providers. Yet around 47% of people surveyed by Creditspring, a loan subscription provider, did not know that a BNPL user could be referred to a debt collector if they missed their payment. 

"Worst-case scenario is that borrowers can end up receiving a knock on the door from a debt collector, but currently the vast majority are completely unaware this is even a possibility," said Neil Kadagathur, Co-Founder and CEO of Creditspring. 

Number of people struggling to access credit increased by 50% in six years.

There are 20.2 million UK adults who may have difficulty accessing credit from mainstream lenders according to fintech company TotallyMoney and accounting firm PWC.

This is likely due to minor adverse credit history, volatile incomes which can impact affordability assessments, or minimal credit history. People who fall into this category are often referred to as “under-served.”

“The findings show the underbelly of a broken market – and it’s too big a problem to ignore,” said Alastair Douglas, CEO of TotallyMoney.

The category of “under-served” borrowers has grown by 50% over the last six years. In addition, a further 8.9 million are “financially fragile”, and are at risk of adding to the number.  

“An alarming rise in the under-served group, and millions more treading water, is not just a symptom of the pandemic and the worst cost of living crisis in a generation, it’s also because the credit market is archaic; built to keep data in the hands of companies, not the people it belongs to,” said Douglas.

It is a view shared by Simon Westcott, Strategy & UK Financial Services Lead at PwC UK, who also calls for the financial services industry to offer greater support.

“There is an opportunity for lenders to enhance existing propositions and deliver new solutions that truly meet the needs of this big and diverse segment of society,” he said.