Boost Your Points With A Loyalty Credit Card

If you are serious about maximising your Clubcard or Nectar points, you may want to switch to a credit or charge card that also earns points.

There are four cards that you could consider getting – two are American Express cards and two are MasterCard.  You should consider getting both an American Express and (because Amex is not accepted everywhere) Visa or MasterCard for your purse or wallet.

Please remember that you should only consider getting one of these cards if you clear your balance promptly every month and do not pay any interest to your card issuer.

I have also included details of the free ASDA Cashback Credit Card.  Whilst this doesn’t give you any loyalty points, it DOES give you 0.5% of your spending back in ASDA vouchers.

These cards are not designed for people who pay interest on their credit card balances because the interest rates are not competitive.  This page of the Moneyfacts site shows more suitable ‘low interest rate’ products if you search by ‘Low Standard Rate’.

If you want to check your credit record before applying for a new card, click here for a free 30-day trial of Equifax’s online credit report service. Note that a monthly fee of £14.95 will apply following the 30 day free trial of this product if you do not cancel within the trial period.  You can cancel your subscription at any time.

Here are details of the four Clubcard and Nectar cards you can get:

 

Nectar 185

Option 1:  The American Express Nectar credit card

Key link:  American Express Nectar card home page

The American Express Nectar credit card comes with a sign-up bonus of 20,000 Nectar points!  These will be deposited directly into your Nectar account.

As the card is FREE for the first year, and you can cancel at any time, this is an excellent offer.

You need to spend £2,000 within the first three months of having the card to receive the bonus.

The American Express Nectar card is a standard credit card so, unlike the Gold card above, you can roll over a balance from month to month as long as you are willing to pay interest.  The interest rate on this card is very high, however, and I would strongly encourage you not to apply if you do not clear your balance in full each month.

The card has a £25 annual fee but is FREE for the first year.

The representative APR is 25.0% variable when you factor in the annual fee, assuming a credit limit of £1,200. The representative APR for purchases is 19.9% variable.

The earnings rate is very attractive.  You earn 2 Nectar points for every £1 you spend.  The website says that you will earn 4 Nectar points per £1 at ‘Nectar partners’ but this is not really true – they are adding together the 2 points from the credit card plus the 2 standard Nectar points per £1 that you would earn anyway at Sainsburys etc.

Further details and the application form for the American Express Nectar credit card can be found here.

 

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Option 2:  The American Express Preferred Rewards Gold card

Key linkAmerican Express Preferred Rewards Gold home page

The American Express Preferred Rewards Gold card comes with a sign-up bonus of 20,000 Nectar points!  Technically, you will receive 20,000 American Express Membership Rewards points, but these can be converted to Nectar points at a ratio of 1:1 via the Amex website.

As with the Nectar card above, Amex Gold is FREE for the first year and you can cancel at any time.

You need to spend £2,000 within the first three months of having the card to receive the bonus.

The Gold card is a charge card and not a credit card.  The difference is that you MUST clear your balance in full every month – you are not allowed to carry forward your debt to the next month.  You should only apply for this card if you know that you can pay your bill in full each time.

The card is free for the first year.  After that, there is a charge of £140 per year, so I would strongly recommend cancelling it at the end of your first year.

The earnings rate is not as attractive as the official Nectar Amex card featured above.  You earn 1 Nectar points (assuming you convert your Membership Rewards points to Nectar) for every £1 you spend, with double points for every £1 you spend outside the UK.

Further details and the application form for the American Express Preferred Rewards Gold card can be found here.

 

Tesco Mastercard

Option 3:  The Tesco Clubcard MasterCard

Key link:  Tesco Clubcard MasterCard home page

The Tesco MasterCard is a potential card to use at places where American Express is not accepted (mainly smaller shops).

There are various different opening offers that you can receive, as you can see on the Tesco Bank website.  One comes with a long interest free period on purchases, one has a long interest free period on balance transfers and the third offers a shorter interest free period on both purchases and balance transfers – this is the version I link to above.

The card has no annual fee.  The representative APR is 18.9% variable.  There is no sign-up bonus at present.

The earnings rate is average.  You earn 1 Clubcard point for every £8 you spend, with each transaction rounded down to the nearest £8.  Spend at Tesco earns 1 point for every £4 spent.

Further details and the application form for the Tesco Clubcard MasterCard version with 0% interest on purchases for 17 months and 0% interest on balance transfers for 3 months can be found here.

There are two other versions of the card available:  0% interest on balance transfers for 40 months (click here) and 0% interest on purchases for 28 months (click here).

There is also a Premium version of this card which has a £150 annual fee.  I discuss that here.

 

Amex 185

Option 4:  The Sainsbury’s Nectar MasterCard

Key link:  Sainsbury’s Nectar credit card home page

Sainsbury’s Bank issues three different Nectar MasterCard cards.  Each has a different feature – one offers a low rate on balance transfers, one has a low interest rate and the other has a bonus deal on new purchases.

Apply before 26th March 2017 and you will receive 5,000 bonus Nectar points if you spend £250 at Sainsbury’s, including fuel, on the card in your first month.

The card has no annual fee.  The representative APR is 18.9% variable, except for the ‘low rate’ card which has a representative APR of 9.9% variable.

The earnings rate on these cards is poor and I do not recommend them.  You will receive just one Nectar point per £5 charged to your credit card – a return of just 0.1p per £1 spent.  You will actually receive even less than this, since each transaction is rounded down to the nearest £5.  A £4.99 transactions does not earn any points, for example.  The earning rate for transactions in Sainsbury’s is substantially better at 2 points per £1 spent, equivalent to a 1% return. 

Further details and the application form for the Sainsbury’s Bank Nectar MasterCard range can be found here.

 

Asda cashback credit card MasterCard

 

 

 

 

Option 5:  The ASDA Cashback MasterCard

Key link:  ASDA Cashback credit card home page

ASDA Money issues two cashback credit cards, both of which are among the most generous on the market.

The free version of the card gives you 1% cashback on all your spending as ASDA, including petrol, and 0.5% cashback on all of your other spending.  The representative APR is 19.9% variable.

There is another version of the card with a £3 per month per fee.  This earns DOUBLE cashback – you earn 2% back on all of your spending at ASDA, including petrol, and 1% cashback on everything else you buy.  The representative APR is 26.2% variable, including the fee.

If you spend more than £600 per month on your credit cards, the ‘monthly fee’ version of the card will be better value.  The extra cashback you earn will outweigh the fee.  If your card bill is generally under £600 per month, you will be better off with the free card.

There is one important point to note.  Your cashback is paid in the form of ASDA vouchers and only be spent at ASDA stores and garages.

Further details and the application form for the ASDA Cashback credit card range can be found here.