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Sainsbury's launches Nectar Credit Card

7th April 2010 Print

Sainsbury's Finance has launched two new market leading credit cards that are targeted at Sainsbury's shoppers.  In order to apply for them, customers must have a Nectar card. 

The first card, the Sainsbury's Nectar Credit Card, offers users an APR of 12.9% on purchases and balance transfers, and double Nectar points on their shopping, in store, online and in petrol filling stations for two years.  The extra Nectar points are equivalent to an additional 1 per cent off their Sainsbury's shopping bill.

The second card, the Sainsbury's Credit Card, offers 0% APR for the first 12 months on purchases and also on balance transfers.  It has a typical APR of 15.9% on both purchases and balance transfers.

The cards have been launched against a backdrop of rising interest rates in the credit card market.  Indeed, research commissioned by Sainsbury's Finance reveals that the average interest rate on credit card purchases is currently 18.2%, compared to 16.3% two years ago.  Only 6% of credit cards offer 12.9% or less on purchases, and the corresponding figure for 15.9% is 32%.

In terms of interest free periods, before the launch of the new Sainsbury's Credit Card, only 1.5% of credit cards offered this for 12 months on purchases, and only 31.6% offered this or better on balance transfers.  There are now only two credit cards currently offering this on both purchases and balance transfers - one of which is the new Sainsbury's Credit Card.

Sainsbury's Finance's research also reveals that only 30.8% of cards offer a loyalty scheme, including 12 that offer cash back.  However, seven of these offer cash backs of less than 1%, and two of those that provide 1% cash back apply fees for having the card.

Stuart McKeggie, Head of Sainsbury's Credit Cards said: "Over the past few months, the credit card market has seen interest rates rise steadily.  Our strategy is very much focused around encouraging more Sainsbury's shoppers to take out our financial services products, and to do this we need to ensure that we continue to offer them exclusive deals that are extremely attractive.  We are confident our new credit cards will be well received by Sainsbury's shoppers."

Further new research from Sainsbury's Finance reveals there will be a considerable amount of customer activity in the credit card market this year.  Some 3.18 million people (7% of the adult population) are considering taking out a new credit card during 2010 with 1.18 million people planning to transfer up to £2.55 billion between cards.