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Santander cuts cashback on popular 123 credit card – so where can you now find the best cashback deals?

IN a blow to Santander 123 credit card customers, there will now bea cap on the amount of cashback card-holders can earn.

From February 1, customers will be able to earn a maximum of just 9 a month in cashback.

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The 123 cashback changes were announced in November, but the changes come into play next Wednesday

It comes a year after the bank hiked the 123 card fees, from 2 a month to 3.

The cashback changes were announced in November, but come into play next Wednesday.

The card will still offer 1 per cent cashback on supermarkets, 2 per cent cashback on department store spending, and 3 per cent cashback on travel but the maximum that can be earned in cashback will be3 per category, or 9 across all three categories, each month.

Previously the credit card had no cap on the amount of cashback which could be earned on spending insupermarkets or department stores.

Now the cashback will only be available on supermarket and department store spending of up to 300 and 150 respectively per month.

Three per cent cashback will still be available on spending on travel, on spending of up to a maximum of 100 per month, down from 300 a month.

The interest rate for purchases made on the credit card will also increase from February 1st, from 12.7 per cent to 15.9 per cent.

The Spanish bank said the changes were being made because ofEU regulation and increased costs in the banking industry, which have a direct impact on the benefits we can offer on our products.

The 123 credit card is no longer available to new customers, after it was replaced last year with a new credit card, the All in One, which offers a flat cashback rate of0.5 per cent on all spending but theres no maximum cap on what youll earn.

Like the 123 card, it has a 36 annual fee.

Tashema Jackson, money expert at comparison, said: Santanders move to cap the amount customers can earn on their cashback spending is the second blow in 12 months for loyal 123 cardholders who were just last year hit with a hike in monthly fees.

Yet, this change is perhaps not unexpected and follows a long line of credit card providers that have slashed their customer rewards recently, including American Express and Marks & Spencer.

Ms Jackson added: When it comes to credit card providers, loyalty doesnt always pay. If youre a Santander 123 customer the maximum you can now earn in cashback is 6 per month, after the monthly fee is deducted.

To earn this 6, you will need to spend 300 on food shopping, 150 at department stores and 100 on travel each month.

If youre unhappy with the change to your credit card, its worth shopping around to see if theres a credit card deal which better meets your needs.

Santander 123 current account customers have not been left off lightly by the bank either.

Last year, customers saw their account fees increase from 2 a month to 5, or 24 a year to 60.

The interest rate on the current account was also cut from 3 per cent to 1.5 per cent on balances up to 20,000.

As a result of the changes, the lender saw only 483,000 customers switch to its account in 2016 compared to around one million the year before.

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