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Credit card Guides
Supermarket credit cards guide
Updated: Wednesday 30 November, 2011
By Martin Fagan
Looking at the different supermarket credit cards available, and helping you pick the best one for you.
Most households spend a significant amount of their money in the supermarket. Taking a credit card issued by the shop you visit most frequently can earn you points that will save you money on your weekly shopping.
In this guide we look at the various different cards available from the major supermarkets and help work out which might suit you best.
- What are supermarket credit cards?
- How do I choose the right supermarket credit card?
- Tesco Clubcard credit card
- Sainsbury’s credit card
- Asda Reward credit card
- Marks & Spencer &More credit card
- The best supermarket credit card for you
What are supermarket credit cards?
Most of the major supermarkets offer a credit card that works like any other reward credit card, as well as offering deals like 0% balance transfers and interest free purchases for a promotional period.
How do I choose the right supermarket credit card?
The whole point of a supermarket credit card is that you can save money that you would normally spend on your shopping anyway. So the best card for you is usually the one offered by your local supermarket - the one you use most often.
If you live within close distance of a number of stores, then you should look at the different features and loyalty schemes offered by each of the chains.
Supermarket “points” are sometimes quite confusing things to collect. It can be difficult to work out how much you need to spend to earn, say 100 points, and then, what that 100 points would equal in real cash terms.
You’ll also need to look at other useful features like the length of balance transfers, the fee you’ll have to pay to move your money, and the standard APR - all these will affect the card you choose.
Tesco Clubcard credit card
The Tesco credit card offers:
- One Clubcard point for every £4 spent in Tesco supermarkets and elsewhere. At Tesco filling stations, you get five Clubcard points for every £4 you spend.
- 100 Clubcard points are worth £1
- Nine months interest-free on balance transfers
- 15 months interest-free on all purchases.
Tesco’s Clubcard credit card could be a good choice for people who do a lot of their shopping at Tesco, especially if they do a lot of driving and regularly fill up with Tesco fuel. As well as nine months’ interest-free on balance transfers, with a 2.9% transfer fee (that’s £29 for every £1,000 transferred), you’ll also be able to take advantage of 15 months’ interest-free on all purchases. You will also get bonus Clubcard points when you spend in store.
However, it’s best to use this card only for spending in Tesco (if only for the extra Clubcard points), and for transferring debt from another card. And make sure that you have cleared any additional spending - either in Tesco or elsewhere - before your interest-free periods end, or you’ll be charged 16.9%APR, forfeiting any benefits.
Sainsbury’s credit card
The Sainsbury’s credit card offers:
- Two Nectar points for every £1 spent at Sainsbury’s in the first two years, one Nectar point for every £5 spent elsewhere
- 100 Nectar points are worth 50p
- Six months interest-free on all purchases (not just at Sainsbury’s)
- 0% for 15 months on balance transfers (with a 3% fee)
This card is similar to the Tesco Clubcard credit card in that it offers points (Nectar), a balance transfer deal and interest-free purchases in store.
So if Sainsbury’s is your supermarket of choice, you can take out a card that, as well as offering 15 months’ interest-free balance transfers (a 3% free applies), will give you a year of interest-free shopping in Sainsbury’s and two Nectar points for every £1 spend in store.
As with its Tesco counterpart, this card is best used only for spending in Sainsbury’s, and for transferring debt from another card. Make sure that you have cleared any in-store spending before your interest-free period ends, and by the end of each month if you’ve been shopping elsewhere, or you’ll be charged 16.9%APR, more than wiping out any savings you’ve made.
Asda Reward credit card
The Asda Reward credit card offers:
- 0% interest on purchases for three months
- 12 months’ interest-free on balance transfers (with a 2.99% fee)
- Free home shopping delivery when you spend £99 or more on the Asda Reward credit card
- 5% discount at Asda Living stores
- Four Reward points are earned for every £4 spent in Asda for the first three months and two points are earned for every £4 spent anywhere else. After initial period you earn two points for every £4 when you shop at Asda and one point for every £4 spent elsewhere.
- 5,000 points equal £50 in vouchers.
Be careful if you transfer a balance to this card and spend on it too. After the three-month interest-free purchase period, your repayments will go towards paying off balances transferred to the card, leaving your purchases racking up interest at 16.8%. Most credit cards are tiered in this way so it’s often a good idea to have separate cards for balance transfers and spending.
Marks & Spencer &More credit card
The Marks & Spencer &More credit card offers:
- One Marks & Spencer reward point for every £1 spent in store and one point for every £2 spent elsewhere
- 100 reward points gives you £1 in reward vouchers
- Interest-free shopping everywhere for the first 15 months then a typical APR of 15.9%.
The best supermarket credit card for you
The best card for you will normally be one from the supermarket where you do most of your shopping, as this will earn you the most points in the shortest timeframe.
However, supermarket credit cards will only prove to be a good deal if you pay off your balance in full each month (after any interest-free period), otherwise any rewards you earn will be more than matched by the interest you pay.
If you transfer a balance to a supermarket credit card, make sure you pay it off before the promotional period ends – otherwise you’ll be charged interest. If you can’t pay it off in time, shop around for another card with a 0% offer on balance transfers.
In some cases, a cashback card will be better - and simpler to understand - than a supermarket credit card. Cashback cards reward you in cash, rather than points, on all your spending. However, the cashback rate will not be as generous as a supermarket’s points scheme and the cashback earned is generally deducted from your statement every month or year.