Chase is expanding its cashback and interest offerings in the United Kingdom.
The bank said in a Thursday (Feb. 16) press release that its existing customers with an introductory 12-month 1% cashback offer will now be able to earn 1% cashback on eligible debit card purchases for another 12 months after that initial offer expires.
In addition, beginning in April, all new and existing customers will earn 1% annual equivalent rate (AER) interest on their current account balances. Interest will accrue daily and be paid on the first day of the month, according to the release.
“We’re expanding our rewards program so our customers can continue to enjoy cashback on their everyday debit card spending,” Chase Managing Director for Everyday Banking Shaun Port said in the release. “At a time when everyone wants their money to work harder, the introduction of 1% interest on current accounts adds another way in which customers can be rewarded for banking with Chase.”
PYMNTS research has found that cashback rewards can be a powerful tool in gaining and retaining customers.
For example, when rewards are offered by money-storing apps, consumer interest in using those apps increases by 49%. That is true even for consumers who have not previously used money-storing apps — emphasizing the importance of adding such features, according to “Money-Storing Apps Gain Favor with Consumers,” a PYMNTS and Treasury Prime collaboration.
The report also found that among those who have previously used the apps, 95% said they are interested in continuing their use of the apps if they are offered rewards.
Higher account interest rates are another tool being deployed as big banks and digital-first financial institutions compete for customers.
The Wall Street Journal reported Feb. 7 that consumers and businesses are pulling their deposits out of the standard non-interest-bearing accounts offered by most banks and transferring them to products such as CDs and high-yield savings accounts.
Chase said in the press release that its 1% cashback offer includes, but is not limited to, groceries, travel, meals, entertainment, fashion, homewares, electronics, flights and holidays.
“Chase’s 1% cashback on eligible everyday debit card spending was developed in line with U.K. consumer debit card spending habits so that customers could benefit from rewards on many of the things they already buy every day,” the bank said in the release.