Credit card reward schemes are order of the day
New research by Sainsbury's Credit Cards shows that of the 8.65 million people planning to take out a new credit card in the next 12 months, over a quarter (some 28%), reveal that a card offering a loyalty reward is the most important deciding factor in their card choice.
However, the supermarket bank's research also reveals that only 34.4% of credit cards in the UK offer a loyalty scheme (a tiny improvement on last year's 30.8%). 14 of these offer cashback with 11 of those offering cashback of 1% or less, and two of which also apply fees to have the card. The average cashback deal available is 0.8%, whilst Sainsbury's Nectar Credit Card and Sainsbury's Gold Credit Card both offer the equivalent of 2% cashback, when used in conjunction with a Nectar card.
One in 10 of those looking for a new card (10%) plan to do so because their existing card offers no rewards and some 8% say they're shopping around because their existing provider has removed or reduced the card's rewards. Additionally, one in 10 of those looking to take out a new credit card (9%) say they're looking for add-on benefits such as travel insurance.
Stuart McKeggie, Head of Sainsbury's Credit Cards said: "We're encouraged by the sign that more of us are shopping around for a credit card that rewards our custom. But with so many different cards to consider, it's easy to become overwhelmed. When you're looking for a card, the most important thing is to choose a card that gives you the maximum benefit for your particular card usage. People are looking to get more from their card nowadays, whether that is through rewards on their shopping or through extra benefits such as travel insurance. Good use of loyalty schemes and card features can help people get a lot more value from their card."
After the desire for improved rewards, the research revealed that the next most important reasons for people searching for a new credit card are because their interest free period on their balance transfer has expired (26%), to find a lower rate of interest (23%), and because the interest free period on purchases has expired (15%).
Andrew Hagger from Moneynet commented: "It's no surprise to learn that more people want to be rewarded for their spending, as the tough economic conditions endured over the last couple of years have made customers focus on making better use of their financial products."
Sainsbury's Finance offers a range of credit cards to meet different lifestyle requirements. The Sainsbury's Gold Credit Card offers customers a number of attractive benefits when both travelling and staying at home. These include no foreign exchange transaction fees, interest-free cash withdrawals (if the whole balance is paid in full and on time each month) and worldwide family travel insurance which is one of the best quality products available according to Defaqto. In addition the card a low rate of 9.94% pa (variable) on purchases and offers users double Nectar points on Sainsbury's shopping in-store, online and in petrol filling stations. The card carries a fee of just £5 per month.
The Sainsbury's Nectar Credit Card offers users an APR Representative of 12.9% on purchases and balance transfers - with no balance transfer fee - and double Nectar points on all Sainsbury's shopping, including in store, online and in petrol filling stations, for two years. The extra Nectar points are equivalent to an additional 1% off their Sainsbury's shopping bill, 2% when combined with their Nectar card.
To find out more about the Sainsbury's Gold Credit Card, visit sainsburysfinance.co.uk.