Totally understand that cashback is super valuable to users. These changes only affect the standard Neo Mastercard users who told us clearly they valued credit limit over rewards, it won’t affect World or World Elite user and those cards remain very rewards focused and boosted by the Neo partner network.
For Neo Mastercard users who really do want the cashback, they can use the free Neo Money card, it has the exact same rewards as the Neo Mastercard used to.
And don’t worry! Insiders still get Grow for free!
I appreciate and understand your frustration, not every update contains features that directly benefit every user. However, you and I use Neo similarly and there’s still lots that’s keeping me here. Let me break it down to how I would think of it.
Rates - Grow includes more than just a phenomenal savings rate (the only standard rate I can find that is over Neo’s 2.75% is Oaken’s 2.80%). I just got back from a 10 day trip and saved $60 on FX fees thanks to the Grow membership. It also gets you priority support and all the features in Build, like free ATM withdrawals, credit score monitoring, etc.
E-transfers - We don’t expect many people to pay for e-transfers. E-transfers are free with Start and Start is free with some form of income entering Neo, and the definition of payroll will be very user-friendly.
Other features launched recently - Neo recently launched a new World Elite card and four new cashback configurations for the World and World Elite cards, all intended to provide more cashback to customers that care about rewards. Also, the FX fee reimbursement, which is not attached to a specific card, but available to anyone who wants it.
Core features that remain strong - The Neo partner network drives almost half of my monthly cashback and is available for everyone.
You should always consider your options, but I personally think Neo is a very strong option for most people and we’d love it if you stayed!
I agree. I have been so impressed by the cashback value using my MC, it’s disappointing to see that go. It would be nice to have an option of cashback vs. credit increase.
The big thing for me is that all or most of that is free with Wealthsimple. You don’t need to deposit any of your pay or anything.
To me the only way the build subscription makes sense is to offset it with the additional savings rates since like I said, those things are free at Wealthsimple.
And for the savings rate, to offset the new cost of the grow subscription ($15/month, $180/year) you’d need to have nearly 72,000 in cash savings just to break even for the cost. Which to me is quite insane. I don’t have that cash nor would I really want to have that amount of cash in a savings account.
For me there’s hardly any partners I use. Once shell went away there’s nothing I really use. Maybe every once in a while it would be useful, but not over what I have now. 2% cashback on everything with a waived credit card fee at Wealthsimple (and no fx fees for their credit or debit). No fees for e-transfer, etc.
I also mostly use my 3% Rogers World Elite anyways. So that’s pretty hard to beat unless I travel. If Neo updated their World Elite to be cheaper or have some way of offsetting it, it would possibly tempt me, but right now, it doesn’t make much sense. Just like the updated fee structure for the savings account. And with recurring subscriptions the recent changes basically has made all of my actually recurring subscriptions not count.
To me for the average person I don’t think it makes sense to try and draw blood from a stone to try and use neo as compared to free and easy use of everything at Wealthsimple.
My partner is using the Secured Neo World Mastercard. Does this make them eligible for the upcoming credit limit increases?
After reviewing everything, so long as I move my payroll to Neo, I will only lose 0.25% interest on the savings account. Cashback remains the same, e-transfers will still be free with Start. I honestly don’t see any upsides to this on my end.
I feel like there’s something I’m missing here. Getting a higher credit limit has never been a goal for me, nor my partner over anything but a basic non-secured credit card.
Hey, sorry for the slow response, I thought I sent something yesterday but it was sitting in draft.
No, the Neo Mastercard is not being phased out. It’s designed for credit builders who want access to a limit and to grow their score as fast as possible, these changes are intended to double down on that and make it even better for credit builders. Neo Mastercard users who miss the cashback are welcome to use the free Neo Money card for gas and groceries and they won’t be missing anything.
As for cashback boosts, those are not being impacted at all. You can even boost the Neo Mastercard if you so please!
Hi Cassandra, thanks for the note! Optionality would have been the best of both worlds solution, for sure, it’s just more complicated to develop and manage. Given the strong majority of users we talked to preferred limit to rewards, and the fact that the Neo Money card is free and gives the same rewards, we decide the best decision overall was to adjust it for everyone. Does that make sense?
I actually like the idea of the new Start membership. I think it could attract more people to Neo and encourage users to use the app for more basic financial tools, like credit monitoring, e-transfers, etc.
That said, maybe it’s just me, but with Start being positioned where it is, the other memberships seem a little less attractive now. I’d be interested to hear what others think about that specifically.
The $1 e-transfer fee on Essentials also feels a bit crappy, especially when most other banks don’t charge for standard e-transfers. Everything else seems pretty reasonable to me. I’m excited for these new features!!
Like you, I love to compare cards and rates and try to figure out the best possible setup. I’m going to challenge you a bit, purely in the hopes of having a productive conversation.
There’s a lot of different issuers, cards, accounts, rates, limits and promos to consider. It’s not completely true that others like Wealthsimple don’t have certain requirements (their WE-level card requires $100k in investments to be free, for example, otherwise it’s $240). Nor is it true that Neo is the only organization that makes changes (Rogers just announced last week that they’re nerfing their pseudo-3% card and Roger’s clients pay a premium to begin with).
Of course, you should make the best decision for yourself.
Also, I’m with you that it would be great if there was an easy way to offset the World Elite fee, but nothing on the roadmap for now.
Your partner won’t be eligible for this round of guaranteed increases, because it’s just on the Neo Mastercards for now. Even though the World card isn’t going to get an immediate increase, this update is part of an platform to help people get access to partially secured credit faster and accelerate towards full graduation.
We’re also adding Neo Advance, which will act as a 0% interest safety net and grow your credit history, speeding up that progress journey.
Thanks for the feedback, that’s valuable! We’re going to continue adding features to all the memberships and hope to make them strong options for people at different stages in their financial journey.
I think that’s an interesting idea! Generally, waivers are there to reward customers who do more of their banking with us. We found it correlates better with payroll than with savings volume, and that’s why we made the switch.
Out of curiosity, what would your thoughts be with a increasingly-valuable payroll-based waiver? I.e., you could maybe get Grow for free if you had, say, $5,000 / mth in inflows?
That’s a great idea, and it’ll actually work for most of the customers. I mainly liked having a way to waive the membership fee based on deeper engagement with Neo.
Getting Grow for free at $5,000/month in inflows sounds reasonable to me.
There certainly is a lot of information here! I really am drawn to the idea of ‘students’ as a target demographic. I think back to my own life out of highschool and I remember gravitating to the first Student card that my credit union offered me. I didn’t think that long or hard about it as life was busy enough at that time.
I think this could be a really strong way to build a young and loyal customer base. That is IF the marketing is specific enough. The big banks usually get a lot of corporate tie-ins like cheap laptop deals and such to lure students in for a quick marriage of convenience. Everyone is sensitive to the feeling of being manipulated. However many students and young adults can feel too busy and just go for whoever prompts them on a more honest level (like what happened to me).
The student card didnt have a great credit limit - but that kept me in check.
It didnt have any cash back - so it inhibited careless spending.
It had a pretty high interest rate - I was a young kid, who would expected anything else?
I ended up keeping that student card for my entire young adult life because it became fundamental to me by keeping me in line with my income. I now realise that the card really did an amazing job in building my credit over the time that i had it. I would be interested in hearing more on what the plans are for such a card or system.
Out of my savings, I will now be losing $180 a year because of this change. On balances of $50,000, you will lose about 14% of your interest because of this, making the effective rate ~2.33%. I can find better at EQ which offers a 30 day notice account at a rate of true 2.75% or a 1 year GIC with 3.4%.
For balances above $25,000 or inflow of $2,500/mo., allow at least something. I am fine with the cost for build/start (or otherwise eligible memberships) being prorated against the cost for grow, as then I won’t be paying so much.
This is just all around saddening. At least keep a discounted rate for people who have been with you before these changes occurred. One of the reasons many come to neo is no monthly fees, and this change is not nice at all.
I can send unlimited etransfers with changeable limits from my local bank with no monthly fee, and neo cannot do that as an online bank? It isn’t what many signed up for.
We’re working on the models now. Basically, just have to confirm that more inflows actually correlates with more use. I’m hoping it does, because I also really enjoyed having Grow, it’s amazing for travel.
Sorry to hear that there may be some negative impacts to you as a long time customer! We’ve always pushed to offer a top savings rates, paying for a Grow membership to get that rate is, like you said, going to reduce the effective earn rate. Fortunately, there are other features that Grow provides and FX alone might make up the difference, if you travel a couple of weeks each year.
As for waivers based on inflows, the Start membership will launch soon and that will allow unlimited e-transfers with a modicum of inflow. We expect pretty much all our serious users to do this, as e-transfers are pretty critical to Canadian finance. I personally really like your idea of extending the waivers up to Grow, we just need to model out what that might look like.
