Reward credit cards harder to find

Credit cards that offer a reward scheme are becoming harder to find, according to new research from Sainsbury's Credit Cards. The proportion of cards available in the UK that offer holders a reward scheme has fallen by over 11% in the past year, with just over two-thirds (66.8%) of credit cards now offering rewards compared with 78.2% just 12 months ago.

In addition, the research reveals that the rewards being offered are changing, with credit cards offering shopping rewards or cash back decreasing in number, while more cards are now providing access to a points or Air Miles type scheme than a year ago.

Yet, further research from Sainsbury's Credit Cards amongst credit card holders indicates that this decrease in the number of rewards available may be a mistake for the industry as those with access to reward schemes are now taking much better advantage of them than 12 months ago; 54% of cardholders with a reward scheme say that they have claimed all or some of the rewards that they have earned in the past year, compared with just 23% a year ago.

Craig Hunter at Sainsbury's Credit Cards said: "The recession has made a lot of people reassess their finances and it's great to see that people are starting to make the most of the rewards on offer via their credit cards. Those with cards that offer no, or poor rewards should ensure they get the best bang for their buck and shop around to make sure any reward scheme they sign up to suits their lifestyle and spending habits best.

"The credit card industry still has a lot of work to do however, as 46% of people still say that they haven't reclaimed the rewards they've earned in the past year, often because of their view of the scheme they have. There is no point offering reward schemes if there is no perceived value or if it is too difficult to redeem the rewards."

According to Sainsbury's Credit Cards research, despite the average value of rewards earned in the past year being estimated at £79.33, the main reason for people not claiming their rewards is that the financial value of these rewards is too small - the view of 17% of people with credit cards offering loyalty schemes.

A further 3% say that the redemption process takes too long and 4% say it is too difficult to redeem the rewards. This poor perception also helps explain why 32% of credit card holders have chosen cards that do not have loyalty schemes linked to them.

Craig Hunter added: "We've worked hard to deliver a card that offers a sustainable reward that is easy to redeem. A family spending £100 every week at Sainsbury's on our card would receive £104 worth of Nectar points each year on this expenditure alone."

The Sainsbury's credit card offers Nectar points equivalent to 2% cash-back on Sainsbury's purchases. There is no limit to the amount of points customers can earn and these can be easily redeemed at a Sainsbury's checkout or any other company that is part of the Nectar scheme. Card holders can also receive Nectar points on non Sainsbury's purchases as well. Of those cards offering a cash-back deal to new customers, on the first £3,000 the average non-introductory rate is 0.45% on universal spend, and no cards offer over 1% on universal spend.

For more information, visit sainsburys.co.uk