Tandem, the U.K. challenger bank that recently acquired the banking arm of the famous Harrods department store partly in order to get its banking license back on track, has launched its first banking product: a credit card that offers cashback on every purchase and no exchange fees when spending abroad.
The new card is designed to work with Tandem’s Personal Finance Manager (PFM) app, which you plug into your existing bank accounts and credit cards to get spending insights and set budgeting goals to help you better manage your money.
The challenger bank, like many other consumer-facing fintechs, wants to become your financial control centre from which it can connect to and offer financial services, either products of its own, such as the newly launched Tandem credit card, or through partnerships with other fintech startups or bigger providers. On that note, Tandem says it plans to offer a savings account in the near future.
Specifically, Tandem says its new credit card brings customers a competitive combination of cashback on all purchases (0.5 percent), no overseas transaction fees, a “market leading” exchange rate, and real time updates when you purchase.
It isn’t the only credit card of its ilk in the U.K. — there are a number of cashback-styled credit cards — although Tandem isn’t charging a monthly fee, which is certainly a draw. (Its APR of 18.9 percent isn’t the lowest on the market, however).
It also points to the startup bank’s initital “attack vector” (as Monzo’s Tom Blomfield calls each fintech’s entrance point): come for the cashback credit card and zero fees when spending abroad, and stay for the PFM and soon-to-launch savings deposit accounts.
The latter, of course, means as a licensed bank Tandem can begin lending out a portion of those deposits, which would begin to form the basis of a proven business model.
To that end, Tandem says it chose to launch with a credit card for multiple reasons. A credit card gives customers free protection on purchases over £100, so you’ll get your money back if, for example, a retailer goes bust. “On top of this, everyone needs some extra cash once in a while. Tandem want to be there when you need some money to cover an emergency cost,” says the self-described “Good Bank”.
Adds Ricky Knox, Tandem’s CEO, in a statement: “With our new banking license, our banking app and our new credit card, 2018 is going to be a great year for Tandem. We are looking forward to getting our colourful cards into the hands of customers – I can’t wait to start seeing customers tapping around town”.