How does Santander's All in One credit card compare?

We put the new Santander All in One credit card under the microscope to work out whether it’s worth going for.

How does Santander's All in One credit card compare?

Santander has scrapped its popular 123 Credit Card.

The 123 Credit Card offered customers tiered rates of cashback. You could get 3% on travel spend, 2% on department store shopping and 1% at supermarkets and attracted a fee of £3 a month.

Existing customers will still be able to use the card to earn cashback, but the deal has been pulled from the market.

New borrowers that want to earn cashback on their spending can go for the new All in One Credit Card instead.

What you can get

The All in One Credit Card has a host of dazzling features.

It offers 0.5% unlimited cashback on all spending at home and abroad.

There's also six months 0% on purchases and no fees on foreign transactions when you spend in the local currency and make cash withdrawals in another country.

But one of the big draws, which seems slightly at odds with the above features that reward spending, is that it's got a great debt-busting offer too.

The All in One Credit Card comes with 40 months interest-free on balance transfers with a 1% transfer fee, making it the cheapest longer-lasting deal around when you just look at the transfer fee.

However, the card also has a £3 monthly fee, meaning you will pay £36 a year to have it, which will limit how beneficial this card will be for most.

Is it worth going for?

The £3 monthly fee means you need to really think about whether the All in One card suits your needs.

If you have a lot of expensive credit card debt to tackle, the balance transfer deal looks competitive, but once you factor in the monthly fee, it's less so.

If you had a £2,000 debt to shift, for example, it would cost you £20 to move onto the All in One Card. But on top of this you will need to pay £36 annually.

So after one year you would have paid £56 to shift debt and keep the card, which means you've effectively paid a 2.8% fee.

If you kept the card for three years (which is about the length of the 0% balance transfer period), it would cost you £128, meaning you've effectively paid 6.8% overall.

Of course, spending on the card can help you limit the impact of the fee as you can earn 0.5% cashback.

But you will need to spend £600 a month to cancel out the £3 a month fee, which might be quite steep for many, especially those struggling with debt.

Don't forget that spend needs to be cleared in full each month or you'll start racking up interest once the 6-month 0% new purchase offer expires.

The card also offers fee-free transactions and cash withdrawals abroad,but there are better deals available that don't attract an annual fee – such as Santander's other new deal, the Zero Credit Card.

It's also worth pointing out that making cash withdrawals on a credit card (anywhere) is a really bad idea as you attract a higher rate of interest immediately.

The problem with all-in-one deals in general

The problem with jack-of-all-trades cards like Santander's All in One is that sometimes you are often better off with a card that does one thing really well.

So if you're after interest-free purchases, the Santander All in One Card's six-month offer is paltry compared to the fee-free Tesco 28-Month Purchase Credit Card.

Meanwhile the 0.5% unlimited cashback Santander offers is tempting but there are better fee-free alternatives around.

For example, the Asda Cashback Credit Card offers 1% back on Asda shopping and 0.5% on all other spending with no fee.

There are also credit cards that you can use for spending abroad that are fee free such as the Post Office Money Platinum card.

Finally, when it comes to 0% balance transfers, Santander's 40 month offer is one of the longest-lasting offers and has the most competitive fee at 1%, so is probably it's key feature.

But as we explained earlier you need to spend heavily to earn enough cashback to cancel out the monthly fee, and it's worth considering whether that's a wise idea if you already have a hefty debt to clear.

If you don't earn cashback, the balance transfer offer really doesn't stack up against the top deals on the market.

The Bank of Scotland Platinum 40-Month Balance Transfer Credit Card and the Lloyds Bank Platinum 40-Month Balance Transfer Credit Card, for example, offer 40 months with a 2.39% fee, which works out £8.20 cheaper than the Santander deal on a £2,000 debt over one year.

Verdict

Overall, the All in One Credit Card seems a bit mismatched and you will need to think carefully if the card makes sense for you based on your circumstances and how you spend.

If you're in a lot of debt you should get the longest lasting deal for the cheapest balance transfer and no ongoing fee, which is the Virgin Money 40-Month Balance Transfer Credit Card.

Meanwhile if you're in a manageable amount of debt you could be better off going for a shorter 0% balance transfer deal that doesn't charge a balance transfer fee. The best in this space at the moment is the Halifax 25-Month Balance Transfer Credit Card.

And when it comes to spending there are better options for cashback, interest-free purchases and transactions abroad.

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