Credit card reward schemes on the rise
Research from Sainsbury's Finance reveals that 42.3% of credit cards now offer some form of reward incentive, compared to 27.4% two years ago.
In terms of what form these rewards take, 22% offer cashback, and 68% provide a points or voucher system. The remaining 10% offer Air miles.
Sainsbury's Finance, which offers a range of credit cards including two that provide double Nectar points on Sainsbury's shopping and fuel, welcomes the findings which demonstrate a real shift towards rewarding the consumer for their loyalty.
However, the findings reveal that the financial value of these rewards can vary dramatically and it is urging would-be card holders to select their credit cards wisely. Looking at cashback deals for example, on an annual spend of £6,000, the average reward is just 0.77%; only 27.2% of the cash back deals available pay 1% or more.
The Sainsbury's Finance double Nectar point reward, available on the Sainsbury's Nectar Credit Card and Sainsbury's Gold Credit Card, offers the equivalent of an extra 1% off your Sainsbury's shopping when used in conjunction with a Nectar card, the total combined reward is therefore equivalent to 2% off.
Given the proliferation of credit cards with reward schemes, new research from Sainsbury's Finance reveals that 55% of credit card holders now claim to be rewarded for using their plastic. Indeed, 24.5% of people planning to take out a new credit card over the next 12 months are doing so because they want to be better rewarded for using their card. A further 4.5% will be taking out a new credit card because their existing one has removed or reduced its existing rewards scheme.
Stuart McKeggie, Head of Sainsbury's Credit Cards said: "As the cost of living increases, people are increasingly looking to get more for their money and also be rewarded for being loyal customers. This is particularly true with credit cards, where people want rewards for using them. In addition to other attractive features, our Nectar Credit Card and Gold Card both offer a double Nectar card proposition on Sainsbury's shopping in-store, online and at Sainsbury's forecourts, which is equivalent to 1% off their shop.
"However, the financial value of rewards is worthless if it is difficult to redeem them. With Nectar, you can save up your points and use them to reduce the cost of your Sainsbury's shopping, or use them at other outlets where they are accepted."
Sainsbury's Finance offers a range of credit cards that reward shoppers with double Nectar points on all their Sainsbury's shopping and fuel including the Sainsbury's Nectar Credit Card which offers 0% for 15 months on balance transfers (3% fee) and 0% for six months on all purchases. For those who travel abroad, the Sainsbury's Gold Credit Card includes rewards such as double Nectar points on Sainsbury's shopping and fuel, and has a number of additional benefits, including annual family worldwide travel insurance, no foreign exchange fees and free cash withdrawals. The card carries a £5 monthly fee and a typical APR representative of 20.1% variable.