Asda is launching a range of financial services products including car, travel and home insurance, currency exchange and a flagship cashback credit card.
Under the supermarket’s new financial service brand, Asda Money, the products will be promoted in its stores and online.
Asda’s cashback credit card – is it any good?
Asda Money’s new MasterCard offers a good cashback deal if you are a frequent Asda shopper – 1% cashback on shopping at the supermarket’s stores and petrol stations, 0.5% elsewhere.
The best cashback credit cards from American Express and Capital One still offer better value, though, as you are not restricted to a particular place to earn the best rate of cashback. The American Express card does come with a £25 annual fee, though, while the Asda and Capital One cards do not.
Cashback on Asda’s card, provided by Creation, is redeemed monthly but to make the most of a cashback card you should always pay off your bill in full each month to avoid paying any interest. So although Asda offer a below average APR on the card of 14.9%, people should avoid borrowing on it if they want to make the most of the cashback.
The 12 months 0% balance transfer deal with 2.9% handling fee capped at £3 is OK but there are much longer offers currently available – up to 22 months from Barclaycard – if you are looking for a balance transfer credit card.
Based on the latest survey of credit card providers, Asda does not fair too well, with a customer satisfaction score of 50%. The average overall customer satisfaction score is 67%. Our full list of credit card Which? Recommended Providers will help you choose a card provider.
Supermarkets putting pressure on banks
Asda’s launch into the financial services sphere follows on from Marks & Spencer’s (M&S) decision to open 50 bank branches in stores across the UK which will offer current accounts, savings accounts, cash Isas and mortgages.
This all comes at a time when the reputation of banks is taking a battering after millions of NatWest, RBS and Ulster Bank customers were affected by technical problems last month, while Barclays continues to find itself at the centre of a storm for its part in the rigging of London inter-bank offered rates (Libor), the interest rate at which banks lend to each other.
Which? banking analyst David Paine said: ‘We’re always pleased to see greater competition in these markets so to witness supermarkets putting pressure on banks is to be welcomed, but it remains to be seen whether they can combine potentially attractive offers with great customer service in this sector.’
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