Pros and Cons of the Tandem Credit Card
With a recent focus on 0% FX credit cards here on Thrifty Points, we’re conscious that none of those covered to date offer any form of travel rewards or cashback. With 0.5% cashback and no foreign exchange fees offered by the Tandem Cashback credit card, this Tandem credit card review will focus on every aspect of the card to see whether it really is the best 0% FX card on the market.
For those who haven’t heard of Tandem before, they’ve had their struggles obtaining a banking licence over the last couple of years, having lost their original licence in March 2017. That was until they purchased Harrods Bank in January 2018. Whilst you don’t need a banking licence to issue credit cards, it has prevented this ‘challenger bank’ expanding as quickly as similar products on the market (think Monzo, Revolut, etc.).
Let’s venture back to the beginning. Tandem Money was set up in 2013 and began life as an app allowing users to conveniently manage money on their phones. Various parties invested in Tandem in 2016, including eBay founder (Pierre Omidyar) and eVentures. It was however announced that Sanpower (former owner of House of Fraser) revoked £29m of their initial £35m investment with concerns over restrictions on outbound investment in China. As a result, Tandem returned their banking licence. In August 2017 Tandem announced they would be purchasing Harrods Bank and with that they regained a banking licence in early 2018.
Let's break this post down...
Tandem Card – What is it?
With the announcement of a new card in November 2018, there are now two Tandem credit cards available. The main card and the one we’re focusing on in this Tandem credit card review is the Tandem Cashback credit card. Don’t worry, we’ll also take a quick look at the new Tamden Journey credit card and focus on the main differences between the two cards.
Tandem Cashback Credit Card
Most credit cards within the UK will charge a 3% fee when used abroad. However with a number of ‘challenger banks’ such as Tandem, Monzo and Revolut introducing 0% FX fee credit cards there has been some serious competition in the travel credit-card industry over the last couple of years.
With competition continuing to heat up, each challenger bank is attempting to entice new customers through either cashback offers or sophisticated apps which promise to provide significant value to users. The Tandem card has decided to opt for the cashback option and offers 0.5% cashback on all purchases.
Regular readers may have heard me mention the EU cap on interchange fees of 0.3% – this is essentially the amount a card provider can charge a retailer on every payment. With the current cashback offer of 0.5%, Tandem Money – who provides the Tandem credit card – is actually losing 0.2% on every transaction. As such, the high cashback rate is likely to prove unsustainable over the long term and may reduce over time. That said, it’s a good offer and one which is likely to be appealing to regular international travellers.
One of the best features of the Tandem credit card is that you can withdraw cash from ATMs abroad with no fees payable. However interest is payable on the money as soon as you’ve taken it out. Similar products such as the Curve Card (reviewed here) have a cap on free international withdrawals of £200, above which point a fee of 2% is payable.
For a credit card that began life as a money management app, there are mixed reviews as to the functionality of the App. Truth be told, in comparison to say the Curve app, Tandem’s offering does feel basic with nothing that stands out as a real wow factor. ‘Key’ features include upcoming bills, alerts when bills increase, recommended ways to reduce bills… there’s nothing challenger about these I’m afraid, although with a potentially loss-making card there may be limited funding to continually overhaul the functionality of the app.
Tandem Journey Card – What’s the Difference?
In November 2018, Tandem launched the Tandem Journey credit card aimed at helping those who haven’t had credit before to build up a strong profile. So what’s the difference between the two cards I hear you ask? Well, with the Journey credit card you’ll receive NO cashback on purchases, however like the other card you will benefit from fee-free international spending.
With a lower initial credit limit from £150 to £1,200, compared to £500 to £12,000 for the Tandem Cashback credit card, it’s meant to be easier for those who don’t have a credit history to apply. Whether this is true or not is a different story.
As a result there’s no real benefit to using the Tandem Journey credit card if you’re eligible for the Tandem Cashback credit card.
What are the Alternatives to a Tandem Credit Card?
With the EU introduction of a 0.3% cap on the fees credit card providers can charge retailers, the number of credit cards that provide cashback incentives have continued to decline over the last 12 months.
The only other alternative free card on the market offering 0% FX transactions and 0.5% cashback would be the Aqua Reward card. This card does however come with a higher interest rate of 34.95% (compared to 18.9% for the Tandem credit card) and a lower, initial credit limit of £250 to £1,200 (compared to £500 to £12,000).
If you’re after a cashback credit card to use in the UK, then it is worth considering the American Express Platinum Cashback Card which offers 1% cashback on all spending up to £10,000 and 1.25% above that. The card comes with a 5% cashback welcome bonus up to £125 for the first 3 months. Unfortunately the card is not free, with an annual fee of £25, HOWEVER this can be offset by a free £25 sign-up bonus when you spend just £1 on the card. Just use this referral link – NOTE that you’ll need to scroll down, click on credit cards and then click on the Platinum Cashback Card.
Let’s Wrap this Tandem Credit Card Review Up
There’s no denying that the current cashback offer from the free Tandem credit card is market leading. How long this will last we can’t be sure, but if you travel regularly, aren’t particularly bothered about a sophisticated app and would like to earn a reasonable level of cashback on your everyday spending then the Tandem Cashback credit card is likely to be suitable for you.
If you don’t plan on using the cashback card abroad and would like to receive the best cashback rate in the market then we would strongly recommend considering the American Express Platinum Cashback Card.