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Credit Card Reward Schemes Are Order Of The Day … If You Can Find One

05 April 2011

New research(1) by Sainsbury’s Credit Cards shows that of the 8.65 million people planning to take out a new credit card in the next 12 months, over a quarter (some 28%), reveal that a card offering a loyalty reward is the most important deciding factor in their card choice.

However, the supermarket bank’s research(2) also reveals that only 34.4% of credit cards in the UK offer a loyalty scheme (a tiny improvement on last year’s 30.8%). 14 of these offer cashback with 11 of those offering cashback of 1% or less, and two of which also apply fees to have the card(2). The average cashback deal available is 0.8%, whilst Sainsbury’s Nectar Credit Card and Sainsbury’s Gold Credit Card both offer the equivalent of 2% cashback, when used in conjunction with a Nectar card.

One in 10 of those looking for a new card (10%) plan to do so because their existing card offers no rewards and some 8% say they’re shopping around because their existing provider has removed or reduced the card’s rewards. Additionally, one in 10 of those looking to take out a new credit card (9%) say they’re looking for add-on benefits such as travel insurance.

Stuart McKeggie, Head of Sainsbury’s Credit Cards said: “We’re encouraged by the sign that more of us are shopping around for a credit card that rewards our custom. But with so many different cards to consider, it’s easy to become overwhelmed. When you’re looking for a card, the most important thing is to choose a card that gives you the maximum benefit for your particular card usage. People are looking to get more from their card nowadays, whether that is through rewards on their shopping or through extra benefits such as travel insurance. Good use of loyalty schemes and card features can help people get a lot more value from their card.”

After the desire for improved rewards, the research revealed that the next most important reasons for people searching for a new credit card are because their interest free period on their balance transfer has expired (26%)(1), to find a lower rate of interest (23%), and because the interest free period on purchases has expired (15%).

Andrew Hagger from Moneynet commented:  “It’s no surprise to learn that more people want to be rewarded for their spending, as the tough economic conditions endured over the last couple of years have made customers focus on making better use of their financial products.”

Sainsbury’s Finance offers a range of credit cards to meet different lifestyle requirements. The Sainsbury’s Gold Credit Card offers customers a number of attractive benefits when both travelling and staying at home. These include no foreign exchange transaction fees, interest-free cash withdrawals (if the whole balance is paid in full and on time each month)(5) and worldwide family travel insurance(6) which is one of the best quality products available according to Defaqto(7). In addition the card a low rate of 9.94% pa (variable) on purchases and offers users double Nectar points on Sainsbury’s shopping in-store, online and in petrol filling stations(3). The card carries a fee of just £5 per month.

The Sainsbury’s Nectar Credit Card offers users an APR Representative of 12.9% on purchases and balance transfers – with no balance transfer fee – and double Nectar points on all Sainsbury’s shopping, including in store, online and in petrol filling stations, for two years. The extra Nectar points are equivalent to an additional 1% off their Sainsbury’s shopping bill, 2% when combined with their Nectar card.

The Sainsbury’s Credit Card offers 0% APR for the first 12 months on purchases and balance transfers.

Reason for taking out a new credit card in the next 12 months(2) Percentage of people planning to take out a new credit card in the next 12 months doing so for this reason Number of people planning to take out a new credit card in the next 12 months doing so for this reason
Want to be better rewarded 28% 2.76 million
Interest free period on balance transfer has expired 26% 2.53 million
Want to find a lower standard rate of interest 23% 2.28 million
Interest free period on purchases has expired 15% 1.51 million
Previous credit card did not offer a reward 10% 990,000
Want a credit card that provides add-on benefits e.g. travel insurance 9% 910,000
Current credit card has reduced existing rewards 8% 790,000
Unhappy with service levels from existing credit card provider 6% 620,000

To find out more about the Sainsbury’s Gold Credit Card call 0800 313 4609, the Sainsbury’s Nectar Credit Card call0800 030 4418 or for the Sainsbury’s Credit Card call 0800 032 2315 or log onto www.sainsburysfinance.co.uk or pick up a leaflet in your Sainsbury’s supermarket. Customers applying for a Sainsbury’s card will need to have their Nectar card ready when they apply.

– Ends –

For further information, please contact:

Ian Morris / Sophie Woodcock
Citigate Dewe Rogerson
020 7282 1037/1072

Notes to editors:

(1) ICM Research interviewed a random sample of 2,003 adults aged 18+ by online-bus between 11th – 13th March 2011. Interviews were conducted across the country and the results have been weighted to the profile of all adults.  ICM is a member of the British Polling Council and abides by its rules.  Further information at www.icmresearch.co.uk

(2) Moneynet analysis commissioned by Sainsbury’s Finance March 2011

(3) Week’s free shopping earned by combining base points earned instore/online and offer bonus points for two years when you collect double Nectar points with selected finance products. For example, a customer spending an average of £50 a week at Sainsbury’s (shopping and/or fuel), could benefit from around £100 worth of Nectar points a year for two years.

(4) ICM Research interviewed a random sample of 2,002 adults aged 18+ by online-bus between 26th – 29th March 2010. Interviews were conducted across the country and the results have been weighted to the profile of all adults.  ICM is a member of the British Polling Council and abides by its rules.  Further information at www.icmresearch.co.uk

(5) Assuming balance is paid in full and on time (46 days – interest rate reverts to 24.9% pa variable)

(6) Worldwide travel insurance covers up to two adults and six children including travel to the USA, Personal Baggage, Winter Sports and Independent Traveller cover. Travel insurance policy is worth up to £250. No foreign exchange fees apply, assuming balance is paid in full and on time (46 days – interest rate reverts to 24.9% pa variable)

(7) Research conducted by Defaqto in August 2010 looking at the entire travel insurance market.

Sainsbury’s Finance Travel Insurance is administered by FirstAssist Insurance Services Limited and underwritten by Great Lakes Reinsurance (UK) PLC. Both companies are authorised and regulated by the Financial Services Authority.

Sainsbury’s Finance:

To view our latest press releases and product information, please visit the Sainsbury’s Finance online media centre atwww.sainsburysfinance.co.uk/media.

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 Finance 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 Finance recent awards include Best Overall Online Provider, Best Direct Personal Loans Provider, Best Online Credit Card Provider, Best Online Life Insurance Provider at the Your Money Awards 2010.

Sainsbury’s Finance is a joint venture between J.Sainsbury plc and Lloyds Banking Group.

For further information and general Sainsbury’s Finance enquiries customers can call the freephone number on 0500 40 50 60 or visit www.sainsburysfinance.co.uk