However, Barclaycard said most customers would benefit, as the company is scrapping “tiered” rates. Typically this had meant customers earned just 0.25pc cashback on the first £200 of spending, and would only get 1pc on spending over £1,500.
Some customers also paid a £12 annual fee. In addition, most cardholders had earned no cashback on spending above £20,000 a year. The cap and fees will be removed.
And unusually this new deal will allow customers to access the cashback they’ve earned when they want, rather than waiting until the end of the year.
Manoj Piplani, the managing director of Barclaycard UK, said: “These changes come after extensive research which showed that customers thought the market was very confusing.”
He said the proliferation of tiered rates, teaser rates, caps and fees made it hard for people to spot the best deals, as much depends on your spending habits (see below).
“We wanted a simpler product, where people earned a flat rate of cashback from the first pound they spent,” he said. However, he conceded that having two cards, rather than one, might sound “a little complicated”.
These cards are linked: the total spend on both will appear on one statement, with one monthly payment to make. Customers will retain the same Pin, credit limits and interest rates they currently have.
The changes will be rolled out over the next three months for existing customers. Mr Piplani said he hoped to offer a similar deal to new customers “in the second half of this year”.
Andrew Hagger, a financial researcher, said: “Credit card providers have always struggled to offer simple straightforward cashback deals. Many customers are not going to be happy that they now have to carry two pieces of plastic.”
But Paul Lawler of Moneysupermarket.com said Amex had become more widely accepted in recent years, with most larger retailers now taking the card.
BEST CASHBACK DEALS
We’ve analysed the “teaser” rates, tiered rates, annual fees and caps to see which cashback card suits which spenders. The golden rule is clearing your balance in full each month; just one month of interest can offset all the cashback.
Paying 5pc, the Platinum Cashback card is the best on the market. However, this rate lasts for just three months, and only on spending of up to £2,500. So the maximum you can earn is £125. Then the rate is 1.25pc. You need to work out if your spending will outweigh the £25 annual fee.
An alternative is the fee-free Everyday Platinum card. It has the same 5pc “teaser” rate for three months, this time on spending up to £2,000. Then customers get tiered cashback from 0.5pc to 1.25 on spending over £7,500.
Those spending less than £10,000 a year are better off with the Everyday card, according to Moneysavingexpert.com.
Not as generous as the AmEx deal, but suits those who use the cards for petrol and groceries.
It pays 1pc on all supermarket spending, 2pc on money spent in department stores and 3pc on transport costs, including petrol and rail and Tube fares. Transport cashback only applies to the first £300 spent each month.
There is a £24-a-year fee. Despite this, Andrew Hagger said the card had proved popular with families.
Capital One – Aspire Elite Card
This card offers a 5pc cashback rate but charges £120 a year. This means in most cases the card is only suitable for very high spenders who will generate enough cashback to justify this fee.
The 5pc rate lasts three months, capped at a maximum of £200. Then there is tiered cashback from 1pc on spending of up to £15,000 to 1.35pc above £50,000.
This card suits those without perfect credit scores, paying 0.5pc cashback. However, the average interest rate of 34pc APR makes full repayments essential.
Credit limits are low – typically between £900 and £1,500 – as the card is targeted at less wealthy spenders.
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