NatWest is cancelling its charge cards from the autumn because low user numbers make the products uneconomical to operate, affecting an estimated 95,000 customers.
Financial journalist Alex Brummer discovered the decision after receiving a letter from NatWest, where he has banked for six decades. The bank informed him that charge card users were now rare because customers prefer digital wallets.
NatWest told Brummer that if he wanted a credit card instead, he would have to contact customer service, submit an application, and undergo credit checks required for a loan agreement.
Brummer had used a NatWest charge card for everyday spending for nearly two decades, unaware that it offered different protections than a credit card. On NatWest online banking, the card was even described as a credit card.
Charge cards allow users to borrow up to a monthly spending limit, such as Brummer's £6,000 limit, but require the balance to be cleared in full each month by direct debit. Unlike credit cards, charge cards do not allow users to spread payments over multiple months or incur interest.
Consumer protection rules
Charge cards do not qualify under Section 75 of the Consumer Credit Act of 1974. Under Section 75, credit card holders are entitled to a full refund from the card lender, retailer, or service provider if items are faulty or the seller goes bust.
Section 75 legal protection applies to purchases priced between £100 and £30,000, covering problems such as expensive car repairs or cancelled flight bookings. Debit and charge cards offer non-legally binding chargeback options, where providers attempt to pull money back from a retailer's account.
Brummer said he had lived under the illusion that the law protected his charge card purchases. He added that he never noticed the lack of borrowing flexibility because he always pays off his balance in full every month.
Ascertaining how many NatWest customers were affected was initially difficult, as the bank claimed the data was commercially sensitive. NatWest later disclosed that 0.5 percent of cardholders among its 19 million customers held charge cards.
Customer figures and market context
Based on NatWest's 19 million customers, Brummer estimated that 0.5 percent represents 95,000 cardholders. A subsequent email from NatWest stated that one-third of charge card holders are dormant and the majority spend £100 a month, though Brummer noted his spending is often higher.
NatWest is not the only provider of charge cards in the United Kingdom. American Express is the largest operator, with an estimated two million charge card customers, including Brummer, who has held a British Airways American Express card for ten years to collect Avios points for flight upgrades, holidays, and companion tickets.
Brummer criticized NatWest for forcing long-standing customers to apply for an alternative card rather than offering an easy transfer. He described the bank's approach as clumsy and expressed concern that simple tasks become drawn out when dealing with customer service.
Bank service and account history
He referenced a recent dispute involving two cash machines that failed to dispense money from his debit card while charging his account. NatWest customer service took weeks to return the funds to his current account after leaving him on hold for long periods.
Brummer said that while the delay did not impact his livelihood as a well-paid professional, similar delays would cause severe trouble for customers living on a limited stipend or pension.
He pays £36 a month, or £432 a year, for a NatWest Premier Black account, which includes travel insurance and breakdown services, alongside a joint account he has shared with his wife for 50 years.
His loyalty to NatWest dates back to when his father introduced him to the manager at District Bank, which was later absorbed by NatWest, over a cup of tea and biscuits before he attended university. Brummer was also a shareholder in the Royal Bank of Scotland before the financial crisis and subscribed to Fred Goodwin's £12 billion rights issue, noting that those financial losses still rankle.
