The number of credit cards offering a standard long-term APR – cards that offer a lower rate over the long term without any introductory 0% offers – has fallen by 35% over the past five years, according to new research(1) from Sainsbury’s Credit Cards.
The supermarket bank’s research(1) shows that there has been such a decline in cards with standard long-term APRs that there are now just four cards on the market (3.4%) offering rates below 10% APR on purchases, compared to 14 (9.9%) five years ago.
The findings show that card providers have continually increased the length of their longest 0% balance transfer or purchase deals during the past five years, whilst reducing the number of standard long-term options available. Five years ago there were 62 cards available (44.0% of those on the market at the time) that offered long-term rates on purchases with no introductory offer. Now there are just 41 cards available with only a long-term rate on purchases (34.8% of those on the market)(1).
Sainsbury’s Credit Cards is encouraging people to remember that while there are some very attractive introductory offers available, often people forget that when their rate runs out, their remaining balance will move to the go-to rate on the card. Sainsbury’s Credit Cards’ research(3) reveals that the average go-to rate on credit cards once the promotional rate expires is currently 17.31%.
Stuart McKeggie, Head of Sainsbury’s Credit Cards explained: “Customers choosing a credit card must remember to be realistic about what will happen to their rate at the end of the introductory offer. There are so many introductory offers available today and many people may think this is the best option for them but that might not necessarily be the case. It’s important to think about your card usage and consider the benefits of introductory offers against the benefits of cards with good standard long-term rates; in many cases the latter could make more financial sense and be more convenient.”
Sainsbury’s Low Rate Credit Card, available to customers with a Nectar card(2), offers a representative APR of 6.9% on new purchases and balance transfers, the lowest APR currently available in the market(3), and has no balance transfer fee. This is only the third sub-7% credit card to hit the market in the past four years.
The findings(1) also show that there are fewer cards offering attractive long-term rates, with no introductory offers, on balance transfers than five years ago. In October 2006 there were 16 cards offering standard APRs below 10% from when the balance transfer was made, 11.4% of the cards available at the time. This has now decreased to just six cards that offer a long-term sub-10% rate on balance transfers, a mere 5.1% of the credit cards now available.
The research reveals that only one in seven cards available now (15.3%) offers no balance transfer fees(1).
To find out more about Sainsbury’s Low Rate Credit Card call0800 030 4365 or log onto www.sainsburybank.co.uk or pick up a leaflet in your Sainsbury’s supermarket. Customers applying for a Sainsbury’s credit card should have their Nectar card ready when they apply.
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For further information, please contact:
Ian Morris / Tom Wilson
Citigate Dewe Rogerson
020 7282 1037/1072
Notes to editors:
(1) 6.9% APR Representative Variable. Terms and conditions apply. Please note, whilst you need to provide your Nectar card number when you apply for this credit card, it does not earn Nectar points. New customers only. Seewww.sainsburysbank.co.uk for full terms and conditions.
(2) Research commissioned by Sainsbury’s Bank on behalf of its credit cards division. Moneynet research carried out in October 2011, comparing the credit card market in October 2011 with October 2006
(3) Research commissioned by Sainsbury’s Bank on behalf of its credit cards division. Moneynet research carried out on 15th March 2012
(4) Research commissioned by Sainsbury’s Bank on behalf of its credit cards division. Moneynet researched the UK credit card market on 12th September 2011. The Barclaycard Simplicity rate was 6.8% until June 2010 when it was increased to 7.8%, then it was reduced to 6.8% again before being put back up to 7.8% in February 2011. Halifax Easy Rate card launched at 6.9% in March 2010 but was withdrawn from the market on 19th October 2010. As of 12th September 2011 the best APR available on the market was 7.9% from Barclaycard Simplicity (minimum income £20,000)
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Sainsbury’s was the first major British supermarket to open a bank, commencing trading in February 1997. Benefiting from a fantastic, trusted brand that enables us to combine the shopping experience with personal finance, Sainsbury’s Bank provides a range of quality products including insurances, credit cards, savings and loans. Our proposition is to make shopping more rewarding by offering customers great products at fair prices, while consistently rewarding shoppers for their loyalty and being easy to do business with at all times. Our products consistently top Best Buy tables and regularly win awards for quality, price and service.
Sainsbury’s Bank recent awards (in 2012) include Best Personal Loan Provider, Consumer Moneyfacts; Best Low Rate Credit Card Provider and Best Credit Card Provider for use abroad (Gold Credit Card), Moneyfacts; and Best Loan Provider, Moneysupermarket Supers. 2011 awards include Best Overall Online Provider, Best Online Pet Insurance Provider, Best Online Personal Loan Provider and Best Direct Home Insurance Provider at the Your Money Awards 2011
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