With a staggering range of incentives on offer, including cash back, air miles and loyalty club points, working out which card to choose can be a daunting experience for consumers. Matters are made more confusing by the range of introductory zero per cent APR periods now on offer from many providers, either on balance transfers or purchases. Customers should consider how often they will use their card, and which type of reward will be most useful to them.
For example, The Sainsbury's Nectar Card Credit Card, at 12.9 per cent APR, shapes up well in terms of rate and benefits and will be attractive to anyone shopping at Sainsbury's on a regular basis. In addition for the first two years, card holders will get double Nectar points on their shopping when spending in Sainsbury's stores and petrol stations as well as online.
Kevin Mountford, head of banking at moneysupermarket.com, said: "With each scheme offering its customers something unique, consumers need to work out what sort of rewards suit their personal circumstances and shop around for the best deal. For a shopaholic this might be a product that offers them money off their next purchase, whereas a jetsetter might be better off with a card that allows them to accrue air miles. Think about how and where you are likely to use the card before you apply. Many schemes are tied in to certain retailers and purchase types, and if you don't use them regularly in the right place your card will turn into a white elephant."
The BMI Credit Card from American Express offers 20,000 destination air miles to customers spending £250 or more within the first 90 days of opening their account. This is equates to two BMI return flights to a range of destinations including Cologne, Amsterdam or Dublin.
Kevin Mountford said: "We have seen many reward schemes come and go over the past couple of years and the market has become use to a high frequency of product changes. That said, reward schemes can still be a great way to generate some extra value from your provider. Customers must remember however, that any interest charged on the card will always negate the value of the rewards, even on the most generous schemes.
"Anyone thinking about taking out a reward card needs to be disciplined and ensure they are paying off the full balance each month, ideally by a direct debit, to avoid getting stung by interest charges. If you do pay off your balance each month, then interest rates are of little relevance to you. However, if you intend not to repay your debt in full each month then you should avoid reward cards and opt for a card with a lower interest rate instead."
- Ends -
Notes to editors:
* Opinium Research carried out an online poll of 2009 British adults from 26th January 2010 - 28th January 2010. Results have been weighted to nationally representative criteria.
Reward cards
|
Provider |
Typical APR |
Introductory Period |
Benefits |
Points Received per £1,000 Spent |
|
Barclaycard
Various Cards |
Various |
Various |
Barclaycard holders will earn 1% in most participating outlets (0.5% at shell) alongside other special promotions and discounts in store.
Reward money is recorded in pounds and pence. |
£10 |
|
Sainsbury's Finance
Nectar Card Credit Card |
12.9% |
N/A |
Receive double Nectar card points on shopping in store, online and in petrol filling stations for 2 years.
1 Nectar Card point for every £5 spent elsewhere.
Customers must be a Nectar Card holder to obtain this card. |
4,000 if card is used in Sainsbury's* alongside a Nectar points card
2,000 if card is used alone in Sainsbury's*
200 when card is used elsewhere |
|
bmi American Express
Credit Card |
15.9% |
0% for 12 months on balance transfers
0% for 3 months for purchases |
Spend £250 or more within the first 90 days of opening and receive 20,000 destination miles which is enough for 2 return flights in Zone 1 - Cologne, Amsterdam, Dublin and more.
Earn 3 destination miles for every £1 spent on bmi flights booked at flybmi.com, 1.5 destination miles for every £1 spent on other purchases. |
3,000 miles if spent on bmi flights
1,500 elsewhere |
|
Lloyds TSB
Duo Airmiles Credit Cards |
15.9% |
0% for 6 months on balance transfers
(minimum spend of £100 applies in the first 3 months) |
Receive 2 cards - Airmiles Duo American Express Card and Airmiles Duo MasterCard.
Earn 1 Airmile per £10 spent on the Airmiles Duo American Express Card.
Earn 1 Airmile per £50 spent on the Airmiles Duo MasterCard.
Receive 150 miles for every £1,000 that is transferred, collect double airmiles when the card is used abroad. Airmiles points can be used to gain free flights, and activity rewards. |
100 points if Airmiles Duo American Express Card used
20 points if Airmiles Duo MasterCard used |
|
M & S
Credit Card |
15.9% |
0% for 6 months on balance transfers
0% for 10 months on purchases |
Earn 1 point for every £1 spent at M&S and 1 point for every £2 spent elsewhere.
Four times per year points earned will be converted into M&S Reward Vouchers which can be used as full or part payment on M&S goods.
100 points = £1 reward voucher. |
1,000 if card used in M&S
500 if card used elsewhere |
|
MBNA Rewards
American Express Card |
16.9% |
0% for 13 months on balance transfers
0% for 3 months for purchases |
Earn 1 MBNA Reward point for every £1 spent on the card.
Points can be used for holidays to high street shopping. |
1,000 |
|
Nectar
American Express Credit Card |
19.9% |
N/A |
2 points for almost every £1 spent on the Nectar Credit Card at Nectar participating partners.
1 point for almost every £1 spent on the card everywhere else.
500 extra points for every £500 you spend on the card in any calendar month.
Double Nectar points on purchases for the first 3 months. |
2,000 if card is used in Nectar participating partners
1,000 when the card is used elsewhere |
|
Tesco
Clubcard Credit Card |
16.9% |
0% for 12 months on balance transfers
0% for 6 months on purchases |
Collect 1 Clubcard point for every £4 spent.
Everytime £4 is spent elsewhere 1 Clubcard point will be earned.
At the end of each quarter a Clubcard voucher will be sent for the points collected in-store and the extra points earned when the card has been used elsewhere.
Clubcard points can be used in-store against Tesco purchases, on Clubcard Deals where you will get four times their value in Deals Tokens. These can be used on holidays in the UK and abroad, weekend breaks, restaurants, home improvements and more.
Just £2.50 in Clubcard points can get 60 AirMiles redeemable with over 100 airlines. |
250
|
*Excludes Sainsbury's Telecoms and Energy
Sourced by
www.moneysupermarket.com 10.05.2010
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