A BIG high street banking chain is axing a lifeline service for all customers within weeks.
M&S Bank is stopping customers from paying off their credit card bills in-store, by cheque, or using bank giro credit – a move campaigners say will make life harder for older and vulnerable people.
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The bank, run as a joint venture between HSBC and M&S since 2004, had already paused in-store credit card payments back in April.
Now, the decision has been made permanent, according to This is Money.
To make matters worse, a letter sent to customers confirmed that from October, payments by cheque or giro credit will no longer be accepted at banks, building societies, or post offices.
The decision has caused a stir, with critics claiming it’s yet another blow to older people who are being left behind in an increasingly digital world.
Baroness Ros Altmann, a pensions expert, said: “You’re pushing away your most loyal, older customers who’ve probably shopped with you for decades.
“It might only be a minority who use these methods, but with M&S Bank’s huge customer base, it’s still a lot of people.
“These changes tend to hit older folks hardest.
“Many don’t have access to online banking or smartphones, and some prefer cash to help them budget better.”
M&S Bank currently offers credit cards, personal loans, travel insurance, store payment cards and a buy now pay later credit to over three million UK customers.
Caroline Abrahams, Age UK’s charity director, also raised concerns.
She highlighted research showing that 27% of people still manage their accounts through branches, while 31% feel uneasy about banking online.
“Reducing payment options will limit some older people, especially those who aren’t online or who prefer cash,” she said.
M&S Bank has defended the decision, saying only “1%” of customers use these older payment methods.
A spokesperson said: “Most customers are choosing to use digital channels for their banking needs.
“We’ve introduced a pay-by-bank option via the M&S Bank app, alongside direct debit and bank payments, to make things easier for them.”
They added that the axed options were “legacy payment methods” and pointed out that customers can still pay at a bank, but giro forms will no longer be printed with statements.
M&S Bank used to offer current accounts prior to 2021.
However, the bank closed this product offering on August 31, 2021, in a shock move that also resulted in the closure of all 29 in-store bank branches on July 2 of the same year.
Since the shake-up, the bank has completely shifted its focus to credit cards, insurance and reward offerings.
M&S REWARDS POINTS
M&S Rewards Credit Card holders earn reward points with every purchase.
Points can then be converted into M&S rewards vouchers which can be spent in stores and online.
Cardholders earn one point for every £1 spent at M&S and for every £5 spent elsewhere, with 100 reward points equating to £1.
When you reach 200 reward points you will receive a rewards voucher, which are sent out every quarter.
Digital Rewards vouchers are usually available in your Sparks account in the M&S app or at marksandspencer.com in March, June, September and December.
Paper rewards vouchers are usually sent in February, May, August and November.
Paper rewards vouchers are valid for 15 months.
Digital rewards vouchers in your Sparks account are valid for 17 months.
What other banking changes are coming?
NatWest is making changes to its business current accounts by increasing fees for cash payments, cheque transactions, and certain online transfers.
From August 30, cash payments into and out of business accounts will see their fees surge from 70p per £100 to 95p per £100.
Cheque payments, whether processed by hand or via mobile, will also jump from 70p to 75p per cheque.
The bank is also increasing some charges related to its BACS payment system.
The BACS system is a UK payment network used by businesses to make electronic bank-to-bank transfers, such as Direct Debits and Direct Credits.
The fee for processing each individual payment or instruction, will soon rise from 18p to 21p.
The cost to process a file containing multiple payments or instructions will also increase slightly from £5.25 to £5.35.
Meanwhile, Santander is closing its 123 Lite current account, which offers up to 3% cashback on household bills for a £2 monthly fee, on August 21.
Customers affected by the closure will be automatically switched to Santander’s Everyday Current Account.
This account has no monthly fee but does not include cashback benefits.
Plus, new customers applying for the bank’s Edge Credit Card will now face a monthly fee of £4, an increase from the previous £3.
Plus, customers of Lloyds Bank, Halifax and Bank of Scotland will soon lose the ability to deposit their cheques at any of the 11,500 Post Office branches nationwide.
From December 31 this year, Lloyds Banking Group will withdraw this service for all customers.
CREDIT CARD NEED-TO-KNOWS
NOT using a credit card effectively can wreak havoc on your finances and your credit score.
If you don’t keep up with repayments or default on your debt, you are likely to get a black mark on your credit record, which could affect your ability to get a credit card, loan or mortgage in the future.
It’s important not to let yourself get sucked into overspending.
You should always clear the full balance as soon as possible.
If you have a poor credit score, don’t bank on being approved for a card or getting the 0% deal you’d hoped for.
Card providers only have to give the advertised rate to 51% of applicants, so you could end up paying more interest than you bargained for.
After your 0% period is up, lenders can charge upwards of 40% interest, so if you have not repaid the debt fully by then, try to move the debt onto another 0% deal.
If you’ve got a poor credit record, you’re less likely to get the best rates.
And if you are looking for a new credit card, don’t apply for lots at once.