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TSB has enhanced its popular Classic Plus account* with a new cashback credit card.
Those who hold the account in addition to the TSB Mastercard credit card can earn 1pc cashback on up to £500 of credit card spend each month.
The offer applies to TSB’s Platinum, Advanced and student credit cards until September 20 2017.
The current account already pays a 5pc on balances up to £2,000, which means customers could earn a maximum of £100 a year – before any cashback.
The Classic Plus account also offers 5pc cashback on the first £100 of contactless spend every month. This is a further £5 per month or £60 a year.
Those who take advantage of the new cashback credit card deal could stand to earn £5 a month on top.
So customers who maximise all the cashback and interest could net £220 in a year.
Depending on other savings, under the new personal savings allowance, this could all be tax-free.
Anything I should know?
To be eligible for the credit card cashback, customers must already hold or open a Classic Plus account.
The account pays a market leading rate of interest, but it does come with certain requirements.
Customers must pay in £500 each month and register for online banking, paperless statements and paperless correspondence.
As far as high interest accounts go, the Classic Plus is one of the least demanding.
For example, the Club Lloyds account pays 4pc on balances between £4,000 and £5,000 but customers must pay in £1,500 each month and set up two direct debits or pay a £5 monthly fee.
The overdraft fees are also not particularly attractive. TSB charges £6 a month for those who go over their £10 buffer regardless of whether the overdraft is planned or unplanned.
A daily fee also applies to unplanned overdrafts. Customers will need to pay an extra £5 a day if they go over £10 but below £25 or £10 a day if they go over £25. See here for more about the overdraft fees of popular current accounts.
Verdict
At a time when many lenders are cutting the cashback on credit cards or increasing the fee, TSB’s latest offer is generous.
Andrew Hagger, founder of MoneyComms said the combination of the 5pc interest on the first £2,000, the 5pc back on contactless spend and the 1pc cashback from the TSB Mastercard credit cards makes it a “pretty rewarding all round package.”
He said if you regularly spend £500 or more per month then he would suggest customers considering taking advantage of the Classic Plus account and the cashback.
However, he said: “Bear in mind that the deal is scheduled to end in Sept 2017. So you’ve got approximately 14 to 15 months of earning potential.”
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