Credit card Guides

Supermarket credit cards guide

By Emma Lunn editorial@consumerchoices.co.uk

This guide looks at the variety of different supermarket credit cards available, and helps you pick the best one for you (Updated 4/12/09).

Most people, and families especially, spend a significant amount of money on their supermarket shopping. Taking out a supermarket credit card can earn you points that will save you money on your weekly shopping - leaving more for the nicer things in life.

In this guide we look at the various different card available and help you work out which might suit you best.

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 spend on your shopping any way. 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 card.

“Points” are deliberately 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 work out as in real terms.

And 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:

• Two Clubcard points for every £1 spent at Tesco, one for every £4 spent elsewhere
• 100 Clubcard points is worth £1
• Six months interest-free on balance transfers
• 12 months interest-free on all purchases

Obviously, the Tesco Clubcard credit card is good for people who do a lot of their shopping at Tesco, as it offers two Clubcard points for every £1 spent at Tesco, and one for every £4 elsewhere.

As well as six months interest free on balance transfers, with a 2% transfer fee, you’ll also be able to take advantage a massive 12 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, 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
• 100 Nectar points is worth 50p
• 12 months interest-free on Sainsbury’s purchases
• 0% for 10 months on balance transfers (with a 3% fee) and all other purchases

This card is similar to the Tesco Clubcard credit card in that it offers points, 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 10 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 spent 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 15.9%APR, making any savings you’ve made worthless.

Asda Reward credit card

The ASDA Reward credit card offers:

• 0% interest on purchases for three months
• Nine 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 for the first three months. Two points are earned for every £4 spent anywhere you use your card for the first three months and every time you shop at Asda. After the first three months you’ll earn one point for every £4 spent every time you use your card outside of Asda.

Be careful if you transfer a balance to this card and spend on it too. After the three-month interest-free purchase period is finished, your repayments will go towards paying off balances transferred to the card, leaving your purchases racking up interest at 17.8%. 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 10 months then a typical APR of 15.9%.
• 0% on balance transfers for six months.

The best supermarket credit card for you

The best card for you will normally be the one from the supermarket where you do most of your shopping as this will earn you the most points.

However supermarket credit cards only work out 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 dwarfed 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.

Compare reward credit cards

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