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A 'free' way to pay off your credit card debts
Sainsbury’s Bank has revamped its Nectar credit card range.
The supermarket now has three deals available, which all give you Nectar points as you spend.
And the new Sainsbury’s Bank Nectar Credit Card with BT Fee Refund could prove very attractive to people who have credit card debts, as it offers to refund the balance transfer fee with the equivalent value in Nectar points – essentially offering a 'free' balance transfer.
It offers 12 months interest-free on purchases as well as 12 months 0% on balance transfers with a 3% fee. However, if you make a balance transfer within six weeks of opening the account you can get the fee refunded in Nectar points.
All of the cards also allow you to earn double Nectar points on Sainsbury’s shopping as well as two Nectar points per £1 spent on Sainsbury’s fuel and one Nectar point for every £5 spent elsewhere.
How the fee refund works
As two Nectar points is equivalent to 1p, if you made a £2,000 transfer onto the Nectar Credit Card with BT Fee Refund you would have to pay a £60 fee, but you would get back 12,000 Nectar points.
And the more you transfer the bigger the Nectar haul.
Effectively the balance transfer is free as you get the same value back to spend, though it has to be spent with Nectar partners.
The points get added to your Nectar account within six weeks of the balance transfer completing.
But to benefit from all the promotions on the card you will need to pay at least the minimum payment each month and stay within your credit limit.
[The £1,200 cost of a poor credit rating]
What you can spend Nectar points on
Nectar points can be used to get money off shopping, restaurants, entertainment, leisure activities, days out and holidays via Nectar partners including Sainsbury's, Homebase, Argos and eBay.
And at some Nectar partners you can double the value of your points.
This applies at the Gourmet Society, on Merlin Annual Passes and for entry into theme parks like LEGOLAND and Alton Towers.
So a balance transfer with the Nectar Credit Card with BT Fee Refund could actually end up being worth more than the original cost of the balance transfer fee.
However, this card is only worth it if you can pay off your debt within 12 months and you can use the Nectar points to make useful purchases.
For more information check out the Nectar website.
[Compare 0% balance transfer credit cards]
The other Sainsbury's cards
The Sainsbury’s Bank Nectar Low Rate Credit Card used to charge a representative APR (the annual combination of fees and charges that has to be offered to 51% of applicants) of 7.8% across purchases and balance transfers, but is now offering a market leading 6.9%.
Meanwhile the Sainsbury’s Bank Nectar Credit Card comes with a boosted introductory offer on 0% balance transfers and purchases. Now instead of 15 months interest-free you can get a competitive 16 months on both, with a 3% fee on balance transfers. The move makes it one of the top all-round cards on the market.
How the Sainsbury’s cards compare
Sainsbury’s Low Rate credit card is a market-leading card. The next best deal is on offer from Tesco. Its Low APR credit card comes with a representative APR of 7.8%, though it offers three months interest-free on balance transfers and purchases.
When it comes to all-round credit cards like the standard Sainsbury’s Nectar credit card or the Sainsbury’s Bank Nectar credit card with BT Fee Refund you are getting a deal on both balance transfers and purchases, but you aren’t necessarily getting the best deal on either offer.
You could get 18 months interest-free on purchases with the Santander 18-Month Purchase MasterCard or Tesco Clubcard credit card for Purchases. And with the Tesco card you can pick up Clubcard points – five points for every £4 spent at Tesco and one point for every £4 spent elsewhere. Both come with a representative APR of 18.9%.
Alternatively if you're after the longest lasting 0% balance transfer there is the Barclaycard Platinum Visa which will freeze your debt for 31 months. It charges a 2.99% fee and comes with a representative APR of 18.9%.
But if you like the thought of just carrying one card the best deal going comes from Nationwide.
The Nationwide Select credit card offers 26 months 0% on balance transfers and 15 months interest-free on purchases as well as 0.5% unlimited cashback on all sterling purchases and commission-free purchases abroad. And if you want a balance transfer and apply before 31st March the balance transfer fee is just 0.75% – making it the cheapest long-term balance transfer credit card around. The card comes with a low representative APR of 15.9%.
However, you will need to be a Nationwide current account customer to be able to apply for the Select card. If you aren’t prepared to switch current account to get it, you can still access the cheapest long-term balance transfer deal going via the Nationwide Visa, which is available to anyone. It offers 26 months with a 0.75% fee (until 31st March) as well as three months interest-free on purchases. This card comes with an APR of 17.9%.
If you're a keen Nectar collector and don't need a balance transfer the American Express Nectar credit card might be a better option. It offers 20,000 Nectar points when you spend £2,000 on the card in the first three months which is equivalent to £100. You can also earn four Nectar points for each £1 spent at Nectar partners and two Nectar points earned for every £1 spent elsewhere. The representative APR is 15.9%. This offer surpasses Sainsbury’s low APR card and Nectar credit card.
