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Feeling The “interchange” Pinch? As A Cap On Card Fees Comes Into Force In December, Credit Card Reward Schemes Are Cut

09 December 2015

Sainsbury’s Bank bucks the trend by increasing its Nectar rewards on its four new credit cards

As banks prepare for the cap on the “interchange” fees they charge merchants and retailers when their customers make credit or debit card payments – coming into force on 9 December 2015 – new research(1) from Sainsbury’s Bank reveals a number of credit cards have cut back on their customer reward schemes.

In total, 35% of credit cards now offer a reward scheme compared to nearly 40% a year ago.  Nearly 4% of credit cards have removed or reduced the value of their reward schemes since 19th April 2015, and just over 7% have done so since October 2014. In addition to this, around 2% of credit cards have increased the interest rates they charge since April, and almost 5% have increased rates from a year ago(1).

However, Sainsbury’s Bank is bucking this trend.  It recently launched four new credit card offers, each with an attractive introductory purchase or balance transfer period, plus a reward scheme(2). And new customers who take out any Sainsbury’s credit card by 29th December will receive 4 Nectar points per £1 on Sainsbury’s shopping for the first three months, (an increase of 2 points per £1),  which is equivalent to 2.5% back on their shopping if they also swipe their Nectar card. New Credit Card customers will also earn 4 points per £1 for the first 3 months on fuel at Sainsbury’s.

Analysis(1) by Moneycomms reveals that someone typically spending £100 a week on shopping  at Sainsbury’s on their Sainsbury’s Bank Credit Card in conjunction with their Nectar card, could receive £78 worth of Nectar points a year. With the additional Nectar points on offer for three months, this could increase by a further £13.

Simon Ranson, Head of Banking, Sainsbury’s Bank said: “The credit card market is extremely competitive and as a retailer and card provider, we aim to offer some of the best deals possible for our customers.  This means having some of the most attractive interest rates and interest free offers available on our cards as well as a worthwhile loyalty scheme that rewards our customers for shopping with us.”

Andrew Hagger of Moneycomms.co.uk said: ”the credit card rewards and cashback market has become more challenging for providers – as a result some customers in this space are now subject to new or increased monthly fees, higher interest rates or watered down rewards programmes.”

About the Sainsbury’s Bank Credit Cards:

Sainsbury’s Nectar Purchase Credit Card

Sainsbury’s Nectar Dual Offer Credit Card

Sainsbury’s Nectar Long Balance Transfer Credit Card

Sainsbury’s Nectar No Balance Transfer Fee Credit Card

Sainsbury’s Nectar Low Rate Credit Card

For information on Sainsbury’s Bank credit cards call 0800 030 4429 visit sainsburysbank.co.uk/cards or pick up a leaflet instore at Sainsbury’s. Customers applying for a Sainsbury’s Bank credit card should have their Nectar card ready.

This press release is information for journalists only and is not intended to be a promotion to be acted upon by consumers.

Ends

Notes to Editors

www.sainsburysbank.co.uk

Sainsbury’s Bank Press Office. Natasha  Virtue 0131 286 0010 /Natasha.virtue@sainsburysbank.co.uk Ctigate Dewe Rogerson 020 7368 9571 / phil.anderson@citigatedr.co.uk

  1. Sainsbury’s Bank commissioned Andrew Hagger of MoneyComms to conduct a review of the UK credit card market.  This was completed on 19th October 2015. Points earned calculation: Spend on Sainsbury’s Bank credit cards in Sainsbury’s normally earns 2 points per £1 spent. In addition, customers collect 1 point per £1 by swiping their Nectar card. So each £100 shop collects (£100 x (2 + 1 points)) = 300 Nectar points. Over a 52 week year, that’s 52 weeks x 300 points = 15,600 points, equivalent to £78. With the introductory offer, customers collect an additional 2 points per £1 for the first 3 months: (£100 x 2 points x 13 weeks) = 2,600 points, worth £13. 500 Nectar points = £2.50.
  2. 2 Nectar points are collected on each full £1 of each separate shopping and fuel transaction at Sainsbury’s. Excludes Sainsbury’s Telecoms and Energy, which will be treated as non-Sainsbury’s purchases. For non-Sainsbury’s purchases 1 Nectar point is collected on each full £5 of each separate transaction. Travel Money purchases are not eligible for points. Nectar points are awarded to you by Sainsbury’s Supermarkets Ltd and Sainsbury’s Bank plc, who reserve the right to alter or terminate the Nectar point offer at any time, but will give as much notice as is reasonably possible before doing so. Points may take up to six weeks to appear on your account. The Nectar loyalty programme is operated independently of Sainsbury’s Bank by Aimia Coalition Loyalty UK Ltd, and the collection and use of points is governed by the Nectar Collector Rules, which are set out in the registration pack and are also available at nectar.com.
  3. Sainsbury’s Bank commissioned Andrew Hagger of MoneyComms to conduct a review of the UK credit card market.  This was completed on 15th October 2015.

Sainsbury’s Bank:

To view our latest press releases and product information, please visit the Sainsbury’s Bank online media centre at www.sainsburysbank.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 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 plc. Registered Office, 33 Holborn, London EC1N 2HT (registered in England and Wales, no 3279730) is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (register no. 184514). Sainsbury’s Bank plc is covered by the Financial Services Compensation Scheme (FSCS).