Credit card offers sweet rewards

Nectar Card customers may benefit from a new credit card loyalty scheme

Sainsbury's is hoping that loyalty will drive more customers to its latest credit card deal. It's offering double Nectar points in store, online and in petrol stations for two years. With 16.8 million people signed up to the Nectar scheme, the supermarket is clearly banking on many of them being persuaded to add themselves to the 500,000 people already signed up to a Sainsbury's credit card.

But is a rewards scheme a good reason to pick your plastic? That depends on how you use your card. If you pay the balance off in full every month – and so never incur interest charges or other fees – then it's clearly worth looking into what other benefits, other than convenience, you can get from using your card.

If you often run up a large balance on credit cards, then more crucial to you will be how much you're going to be charged. The cheaper the cost of borrowing the better. In fact, if you do use a credit card to borrow, Sainsbury's has also targeted you this week with its 0 per cent introductory deal on its other new credit card.

"Interest-free introductory deals have become quite rare," says Andrew Hagger of Moneynet. "However, the new Sainsbury's credit card offers 0 per cent for 12 months on balance transfers and purchases, something that only the Virgin credit card, can match. With the average credit card purchase rate in the market in excess of 18 per cent, the post promotional rate of 15.9 per cent is also attractive."

If you do pay off your credit card balance each month, is the new Sainsbury's Nectar Card deal worth considering? Yes, if you're a Nectar Card customer, says Mr Hagger. "The card offers a very low standard rate of 12.9 per cent on purchases with only a handful of cards offering lower than this, plus you can also get 12.9 per cent on balance transfers. However the double Nectar points on Sainsbury's shopping for two years will be the main reason to sign up for their supermarket customers."

If you're not already a Nectar card holder, it could well be worth signing up to the scheme to qualify for this credit card, but only if you're going to be using it at Sainsbury's, otherwise you get less points. It's easy to sign up for Nectar – you can pick up a card free in store and register online.

Sainsbury's move is the latest in a series of improvements in the rewards offered by credit cards, following the Barclaycard Freedom initiative and the AA rewards credit card. "There seems to be more emphasis in rewarding loyalty in an attempt to encourage longer term customer relationships," says Hagger.

Barclaycard's scheme is currently top of Moneysupermarket's best buys (see below). "But Sainsbury's move shows how the credit card market is becoming more niche – not only do you need a good credit rating, but providers are looking to give better offers to existing customers," says Peter Harrison, credit card expert at

Barclaycard's deal offers the card's 8 million customers 1p for every £1 they spend in participating shops and restaurants or 0.5p for every £1 they spend at Shell garages. Big names signed up for the scheme include Pizza Express, nPower, Flight Centre, LA Fitness and Balls Brothers. Uniquely, the points – known as Reward Money – can be used while spending. The value of Reward Money appears on the card machine before people enter their PIN to pay. They can then redeem some or all of their points on that transaction.

But if none of your favourite shops or restaurants are signed up to Barclaycard Freedom then the scheme will be worthless to you. It may be worth instead looking to the shops you use most and checking what credit card reward schemes they offer. Both Marks & Spencer and Tesco have decent plastic card deals, for instance. Beyond that you can cut the cost of flights through schemes from bmi American Express and Lloyds TSB's Duo Airmiles cards.

Reward Cards: The best benefits

Barclaycard: 1 per cent in participating outlets (although just 0.5 per cent at Shell) as well as other promotions and discounts.

Sainsbury's Finance: Double Nectar card points on shopping in store, online and in petrol filling stations for two years. One point for every £5 spent elsewhere.

bmi American Express: Spend £250 or more within the first 90 days of opening and receive 20,000 destination miles which is enough for two return flights in Zone 1 – Cologne, Amsterdam, Dublin and others.

Lloyds TSB: Earn one airmile per £10 spent on the Airmiles Duo American Express Card, one Airmile per £50 spent on the Airmiles Duo MasterCard.

Marks & Spencer: Earn one point for every £1 spent at M&S and one point for every £2 elsewhere. 100 points = £1 reward voucher.

MBNA Rewards: Earn one MBNA Reward point for every £1 spent on the American Express card. Points can be used for holidays and high street shopping.


Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Recruitment Resourcer

    £20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

    Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

    Ashdown Group: Trainee Consultant - Surrey / South West London

    £22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

    Day In a Page

    Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

    Climate change key in Syrian conflict

    And it will trigger more war in future
    How I outwitted the Gestapo

    How I outwitted the Gestapo

    My life as a Jew in wartime Berlin
    The nation's favourite animal revealed

    The nation's favourite animal revealed

    Women like cuddly creatures whilst men like creepy-crawlies
    Is this the way to get young people to vote?

    Getting young people to vote

    From #VOTESELFISH to Bite the Ballot
    Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

    Poldark star Heida Reed

    'I don't think a single bodice gets ripped'
    The difference between America and Israel? There isn’t one

    The difference between America and Israel? There isn’t one

    Netanyahu knows he can get away with anything in America, says Robert Fisk
    Families clubbing together to build their own affordable accommodation

    Do It Yourself approach to securing a new house

    Community land trusts marking a new trend for taking the initiative away from developers
    Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

    David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

    The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
    With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

    Money, corruption and drugs

    The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
    America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

    150 years after it was outlawed...

    ... America's first slavery museum is established in Louisiana
    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
    Tony Oursler on exploring our uneasy relationship with technology with his new show

    You won't believe your eyes

    Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
    Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

    Moores must go. He should never have been brought back to fail again

    The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
    War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

    The battle for Mosul will unleash 'a million refugees'

    Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn