One of Canada's newest financial providers, actually I should say FinTech companies Neo Financial has tweaked their credit card offerings once again. It seems every few months they are changing things up - which can be both a good and a bad thing. Good in that they are flexible and learning the market as they go and are adjusting as needed, bad in that having someone grab their product(s) based on something they have only offered for a short period of time and are already switching it up which may leave a few people wondering if being with a new entrant like this is a safe and rewarding alternative to the traditional offerings. Read on the find out what those tweaks are.
There are two key changes to their products. The first is that Neo will now guarantee 1% cash back on all spending on the cards at their partners and non-partners. This is called their monthly top up and what it does at the end of the month or your billing cycle is look at your cash back and if your overall cash back across that partner and non-partner spend is less than 1% Neo will bump it up to 1%. This top up feature is good for up to $5,000 in spending per month after that amount the cash back earn rate drops to 0% for non-partner spending. I would guess that for most Neo card users that $5,000 limit is high enough that you won't lose out on any cashback in one set month unless you have some big purchases like a deposit on a new car or some home renos that need to be done. In that case you may want to spread your spending out (if you can) or put the big purchases on another card that doesn't cap your earning and/or provides a higher cash back rate. For partner spending all three cards retain their average earn rates at Neo Financial partners - which ranges from 4% to 6% depending on which card you have. If you spend a lot at Neo partners then some of your non-partner spending may end up earning below 1% as that 4-6% earn may easily push you above that 1% monthly average so also keep this in mind. To me this new earn system seems somewhat more complicated than it needs to be and may keep the cardholder guessing as to how much they are going to earn in cash back rewards.
The second change comes to the monthly fee for their higher earn rate cards. The Plus Card and Ultra Card (Which used to be known as Max, so another change there) see their monthly fees drop by $1 to $2.99 and $8.99 respectively. You may recall from our last post about Neo that we considered the $9.99 they were charging for the Max card (well Ultra now) was high for what you got in return. At $9.99 you essentially had a $120 per year card which is the same annual fee you pay on many other premium cards from other issuers that reward you with higher earn rates and include insurance benefits, lounge access and more. All the things Neo cards do not provide. Now with this change that Ultra card will cost you $107.88 per year, still high in my mind for what you get in return but it is a step in the right direction.
Wrapping it up
I like to see reward programs and credit cards evolve (and we know a lot of traditional programs and banks are too slow at it) but I think Neo needs to be careful here with the amount of changes they are making to their products. We've already seen numerous changes in their short lifespan, from focusing on local market rewards to going with nationwide earn rates, fee changes and even product name changes. I'm not saying these changes are bad but if you want to instill confidence with your customers I think you need to show confidence in what you offer. Ultimately it is good to see the monthly fees come down on their products and although it is somewhat confusing, the new guaranteed 1% return on $5,000 in monthly spending is a much needed boost to their Standard and Plus cards and as Martha Stewart would say, that's a good thing.
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