The Chase is on, but should you sign up?
I couldn't resist beginning this article with a cheesy pun to the ITV Daytime show BUT this is a serious development in UK banking. One of the United States largest banking groups, JP Morgan Chase, are parking their proverbial tanks on the UK fintech scene with a new proposition. If you're in a major town or city across the UK you will have seen their marketing blitz currently under way - lets take a look at what they're offering.
This article is not providing financial advice but merely reviewing the Chase Bank UK product for their features and benefits. If you want proper financial advice, go somewhere else like Which? or Martin Lewis Money Saving Expert.
How does it work?
Unlike their US counterpart, Chase UK is a fully digital, app-based bank with no brick and mortar stores in their plans. This is sensible because almost all financial institutions in the 2020s do not need to have a physical presence, as proved by their fintech counterparts Starling and Monzo. Sign up is pretty quick and easy, simply requiring you to provide a selfie, proof of identification and then you're straight in with a virtual MasterCard debit within minutes. Chase have quite a unique offer in that the card has zero details on besides your name making it more secure by virtue of the fact if you left your card laying around, people couldn't take down your details to make online payments.
Get the pounds rolling in
The biggest selling point Chase are leading with on all their marketing is 1% cashback on all debit card spending within the first year of you signing up. This is quite decent for a bank account that has no monthly fee with it covering almost all regular transactions in shops but not those like gambling, premium bond or tax payments. The cashback offer is likely to draw in a lot of people in the first few months although it does beg the question, what happens after that? Will Chase move to a monthly fee? Will they extend the cashback offer? Will there be a mass exodus of users in one year? Who knows!
Besides the cashback, the other major reason for choosing this app bank is their zero foreign transaction fees. As an avid traveller, this is a big selling point. UK credit cards, besides Virgin Atlantic in the European Economic Area, charge high fees of around 2.99% for international transactions. Curve Card has a limit on the amount that can be withdrawn from a cash machine without a subscription and their relationship with some card providers, including American Express and Creation, mean that it is becoming an increasingly limited option. Traditional high street banks are notoriously expensive for foreign transactions. Monzo also have a cap similar to Curve which encourages you to subscribe to their more expensive account leaving only Starling with a similar proposition. In Year 1, Chase wins out over Starling because you will get cashback on these transactions too.
How's the experience?
I've been using Chase on and off for the past two months when their soft launch began in October time. Starting with the positives, their app is brilliant and compared to when other digital banks started is pretty smooth. NatWest Group began the short lived Bo bank in 2019 which was extremely unreliable to use so to see a big behemoth like Chase pivot and create an operation for the UK market that is this good is great. They’re also making continuous improvements to the app - since I began using it improvements have been made like Google Pay support, which was unavailable at launch. This gives me some hope that other improvements will come because, unfortunately, important services like Direct Debits are not yet available so its unlikely this will be your day-to-day account.
In time, I think Chase has the potential to be a real contender as a challenger bank - they have the financial backing of a huge corporation that will likely put up with several years of losses, like most digital banks, in order to build up a long term profitable business. More so, I hope that Chase will extend its financial portfolio into Rewards Credit Cards as they have done in the United States - that might make the potential for earning travel points easier and more rewarding.
