ING Direct, the innovative bank known by its slogan, Save Your Money, never introduced a credit card.

Only after the Scotiabank acquisition did the renamed Tangerine Bank release a no-fee, money-back MasterCard that wowed many Canadians eager for innovation.

Tangerine offered a 2 per cent rebate on purchases in two categories of your choice and a 1 per cent rebate on all other purchases.

Another benefit was a 1.5 per cent foreign conversion fee for purchases made in U.S. or other currencies, “one of the lowest on the market,” Tangerine boasted.

Barely one year after the launch, Tangerine MasterCard is raising fees and cutting benefits – a move many customers call bait and switch.

The 2 per cent rebate on two categories of purchases remains. But the rebate on all other purchases drops to 0.5 per cent, starting April 29.

The foreign conversion fee is going up to 2.5 per cent, bringing it up to the level of most other Canadian credit cards.

There are other changes: The balance transfer fee triples to 3 per cent (from 1 per cent). The cash advance fee rises to $3.50 within Canada (from $2.50). And the over-limit fee increases to $25 (from $20).

Why did Tangerine’s first credit card, launched with such fanfare, require retooling within a mere 12 months?

“We reviewed our credit card and decided to make changes,” said Buket Oktem, a company spokesperson. “The changes reflect what our clients value most and allow us to maintain a competitive product with industry-leading features.”

But when I asked readers for their views, nearly everyone complained about the reduced rebate outside the chosen categories and the higher conversion fee for foreign currency purchases.

Some plan to drop the card. Others plan to keep using it in tandem with other cards offering higher rebates.

“To say I was disappointed would be an understatement. I was just plain annoyed and felt betrayed by this action,” said Susan Beals.

“They reeled us in with their great offer and once we had bitten, wham, they pulled the rug out and made changes. To make it worse, I even recommended the card to several people.”

Felicia Isenbaum headlined her email, “Sour Tangerine” and added, “Pardon another pun, but I think it is becoming a real lemon.”

She has applied for an American Express SimplyCash Card, which offers 5 per cent cash back on all eligible purchases at gas stations, grocery stores and restaurants in Canada (up to $250 cash back) for six months, followed by a 1.25 per cent rebate on all purchases.

Jim Deakin travels frequently with his wife outside Canada. He picked the Tangerine card specifically for the 1.5 per cent foreign exchange fee, planning to use it exclusively for travel.

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“Years ago, I used a Desjardins Visa card that had a 1.5 per cent fee. When Desjardins raised the fee to 2.5 per cent, I cancelled the card and I will now cancel the Tangerine card,” he said.

Many cardholders don’t know there’s a fee for making a purchase in a foreign currency. It is not shown separately on credit card statements, but rolled into the price you pay after converting a purchase into Canadian dollars.

I asked two bloggers who gave Tangerine high ratings in the past about the revamped card.

Stephen Weyman, HowToSaveMoney.ca:

“Now the No.1 ranked card among no-fee cash-back credit cards, Tangerine’s card will drop all the way down to the No.7 spot in our rankings.

It’s still an attractive no-fee card for those willing to carry multiple cards to maximize rewards. You could combine the 2 per cent cash back on Tangerine’s bonus spending categories with the 1.25 per cent everyday cash back of the SimplyCash Card from American Express – giving an even better reward value than the old Tangerine card on its own.

This is a really disappointing change from Tangerine so shortly after the card was launched. Companies need to treat their customers fairly. Setting and dashing expectations is not the way to encourage repeat business.”

Marc Felgar, GreedyRates.ca:

“Tangerine likely had an overly optimistic set of assumptions that never panned out. If they were losing money, and I believe they were, the decision was inevitable. Fortunately for cardholders, it’s a no annual fee product.

Its offering can still be attractive. There are no other no-fee cash-back credit cards in Canada that give 2 per cent unlimited cash-back rewards in two or three categories.

However, its 0.5 per cent on all other spending is not very attractive when compared to other cards – such as Amex’s SimplyCash card (1.25 per cent on all spending), BMO’s no-fee cash-back card (1 per cent on all spending) and Rogers Platinum MasterCard (1.75 per cent on all purchases and 4 per cent on foreign currency purchases).”

My advice: Big banks can revamp their products and services any time they like, reducing the benefits that led you to sign up in the first place. Don’t expect loyalty to customers to supersede the primary goal of making profits for shareholders.