Focus on: 20,000 Nectar points with American Express

If you religiously pay off your credit card balance in full each month and are looking to get something back for your spending, the latest offer from American Express could be right up your street – particularly if you're a regular Sainsbury's shopper.

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Amex has enhanced the welcome bonus on its Nectar Credit Card, giving new customers 20,000 bonus Nectar points in the first three months. However, the offer is only available until November 6, so you'll need to act quickly if you want to take advantage.

What's the deal?

The American Express Nectar Credit Card is now offering new customers a bonus 20,000 Nectar points, which is equivalent to £100, when they spend £2,000 or more in the first three months.

In addition, you'll collect two Nectar points for every £1 you spend on the card and, if you use a Nectar loyalty card as well, you'll earn up to two points extra for every £1 spent at Nectar partners such as Sainsbury's, Homebase and BP. These points can then be redeemed at certain retailers, at a range of restaurants and on days out.

With the Amex Nectar Credit Card, you'll also be able to take advantage of 'American Express Invites', allowing you to buy tickets for music, theatre and film events, often before they go on general sale.

And you'll be given a supplementary card for a family member at no extra cost, helping you to build up your Nectar points more quickly.

The card has a representative annual percentage rate (APR) of 25% (variable) and comes with a £25 annual fee.

Who's it good for?

The Amex Nectar credit card is best suited to those who pay off their balance in full each month as paying the high APR will outstrip any benefit you get back in rewards. It's an attractive option for those who regularly use their Nectar card at retailers such as Sainsbury's and Homebase and are looking to build up their Nectar points more quickly.

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Any catches?

The £25 annual fee and the high representative APR of 25% are the two biggest catches you need to watch out for.

Remember too that you will only receive the 20,000 bonus Nectar points if you apply for the card before midnight on November 6 and you spend £2,000 or more in the first three months. Bear in mind that American Express is not accepted in all retailers.

To qualify for the card, you'll need to be at least 18 years old, have a household income of £30,000, and have an excellent credit rating.

What's the verdict?

If you frequently shop at Nectar partner stores and are a keen Nectar-point collector, the American Express Nectar Credit Card could be a tempting option – but only if you are certain you can clear your balance each month.

To give you an idea of how much you could earn, say you spent £700 a month on your credit card, with £250 of this at Sainsbury's, you'd earn four Nectar points for each £1 spent at Sainsbury's, and two Nectar points for every £1 spent elsewhere. Therefore you'd earn 1,000 + 900 = 1,900 points each month. Plus, you'd get the 20,000 bonus points in the first three months.

These points can be redeemed at places such as Sainsbury's, Homebase, Argos, Bella Italia, Strada, Expedia, Eurostar and easyJet, where 500 points is equivalent to £2.50. Or you can double the value of your Nectar points (500 points = £5) by using them for days out places such as Warwick Castle, Madame Tussauds, Alton Towers and Legoland.

You can view the full list of places that accept Nectar points on the Nectar website.

If you'd prefer not to pay an annual £25 fee, or you know you won't be able to clear your balance each month, you might prefer the Sainsbury's Nectar Low Rate Credit Card. It has no annual fee and comes with a much lower representative APR of 7.8% (variable), so you won't have to fork out as much in interest if you are unable to clear your balance one month.

In addition, you will collect 10 points for every £1 you spend on Sainsbury's shopping for the first three months and four points per £1 spent after that. You'll also collect one point for every £5 spent elsewhere. (You must use your Nectar card in conjunction with the Nectar Low Rate credit card.)

Top tip!

If you're more of a Tesco shopper than a Sainsbury's shopper, or you know you don't always manage to clear your credit card balance each month, the Tesco Clubcard credit card for purchases could be more suited to your wallet.

The card offers a market leading 18 months at 0% on purchases, has no annual fee, and allows you to earn Clubcard points as you shop. You'll earn five Clubcard points for every £4 you spend at Tesco stores and petrol forecourts, and one Clubcard point for every £4 you spend elsewhere.

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