Sainsbury's new credit card with £60 price tagNew 'packaged' card could still be competitive

09 September 2010

Sainsbury's Finance

Sainsbury's Finance has launched a new credit card, the Gold MasterCard, offering the benefits usually associated with a packaged bank account. The card has a monthly fee of £5.

Which? credit card expert Martyn Saville commented: 'This new card from Sainsbury's Finance is an interesting hybrid, combining benefits like annual family travel insurance with a monthly fee you might expect to pay for a packaged bank account rather than a credit card. That said, our analysis shows this innovative new card could be good value if you use all the benefits and manage the card wisely.'

Interest rate and balance transfers

  • What the Sainsbury's Gold card offers: The Gold credit card charges 9.94% (variable) on purchases and balance transfers. It charges no balance transfer fee.
  • Which? says: The purchase rate is well below the market average and sits comfortably amongst our Best Rate credit cards for borrowing. If you're looking for a top balance transfer deal, don't use the Sainsbury's card - you can get up to 16 months interest-free (subject to a 2.9% transfer fee) with a Which? Best Rate 0% balance transfer credit card.

Credit card benefits

  • What the Sainsbury's Gold card offers: The credit card offers free annual family travel insurance cover for two adults and up to six children. It also advertises double Nectar points on Sainsbury’s shopping.
  • Which? says: The travel insurance policy doesn't quite meet our criteria to be a Which? Best Buy for travel insurance as it only offers £2,000 cancellation and curtailment cover, compared with the £3,000 offered by our Best Buys. However, if you're happy to accept this lower level of cancellation cover, the policy meets the rest of our Best Buy criteria - a Best Buy policy would cost you around £52-£64 a year, so this aspect of the Sainsbury's card could be worth the £60 annual fee alone, making this card a sound option. The double Nectar points offer isn't, however, quite as good as it seems. You'd get standard Nectar points using a normal Nectar card, regardless of how you pay for your shopping. The extra points you'd receive for paying with the Gold card are therefore only worth a cash equivalent of 1%, and this is only on Sainsbury's shopping. For rewards on all your shopping, you'd probably be better off with a Which? Best Rate cashback credit card. Or check out how Sainsbury's compares with other retailers' credit cards with our brand new Reward credit card reviews.

Fees and charges

  • What the Sainsbury's Gold card offers: The card charges no foreign exchange fees on overseas use. It also charges no cash advance fees in the UK and no interest on cash withdrawals if your bill is paid in full every month.
  • Which? says: The absence of foreign exchange fees is very welcome and makes this a good card to use abroad (again assuming that you use enough of the other benefits to justify the £5 monthly fee). If you just need a fee-free card to use abroad, try a Which? Best Rate card for overseas use. Where this card is way ahead of the rest of the market is the interest-free period on cash withdrawals. Most cards charge you a rate of up to 30% APR from the moment you withdraw cash on your credit card. Refreshingly, the new Sainsbury's card doesn't charge interest on cash withdrawals, so long as you clear your bill in full and on time every month. This is a great innovation and sets a new standard for the rest of the market.
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