The supermarket credit cards that beat the banks

Some of the best 0% purchase, 0% balance transfer and low APR credit cards come from supermarkets.

Supermarkets aren’t just places you can pick up your groceries anymore.

The likes of Tesco, Sainsbury’s, Asda and M&S are offering financial products to rival the high street banks. At the moment there are great deals to be found on credit cards.

We take a look at how supermarket deals are stacking up against highstreet banks in some of the major categories.

0% purchase cards

The longest 0% deal on offer comes from Santander’s 123 credit card, which won’t charge interest for 23 months. It also pays cashback on your spending of up to 3%, though there is a £24 annual fee to take into account.

Here are the longest 0% purchase deals on offer at the moment.

Credit card	0% period	Representative APR
Santander 123 Credit Card*	23 months	16.5%
Clydesdale Bank Gold MasterCard	20 months	18.9%
Yorkshire Bank Gold MasterCard	20 months	18.9%
Halifax Purchase Credit Card	20 months	18.9%
Tesco Clubcard for Purchases	19 months	18.9%
M&S Credit Card	19 months	18.9%
Sainsbury’s Nectar Purchase Credit Card	19 months	18.9%
Lloyds Bank 19-Month Platinum	19 months	18.9%
Bank of Scotland 19-Month Purchase	19 months	18.9%

*Annual fee of £24

As you can see, supermarkets’ credit cards are not quite market-leading. However, they do offer the added bonus of allowing you to collect loyalty points on your spending.

For example, the Tesco Clubcard for Purchases gives you five points for every £4 spent at Tesco and £1 elsewhere, while the Sainsbury’s Nectar Purchase Credit Card gives you two Nectar points for every £1 spent at Sainsbury’s and one point for every £5 spent elsewhere.

Meanwhile the M&S Credit Card pays one point for every £1 spent in-store and then one point for every £2 elsehwhere. You also get 500 bonus points when you use your card in-store in the food, clothing or home departments.

With these cards you get the combination of length 0% deals and a reward for your spending, without having to pay an annual fee.

Long 0% balance transfer cards

Tesco has just revamped two of its balance transfer credit cards, which make them even more impressive now.

First up, it has extended its longest 0% balance transfer card, so you now get 35 months clear of interest on your balance. It has coupled this with a reduction in the balance transfer fee to 2.7%.

Here’s how it now matches up against other lengthy 0% deals:

Credit card	0% period on balance transfers	Balance transfer fee	Cost of transferring £2,000 balance	Representative APR
Barclaycard 36-Month Platinum Visa*	36 months	2.99%	£59.80	18.9%
Virgin Money Balance Transfer Credit Card	36 months	3.49%	£69.80	18.9%
Barclaycard 35-Month Platinum Visa*	35 months	2.69%	£53.80	18.9%
Halifax 35-Month Balance Transfer Credit Card	35 months	2.7%	£54	18.9%
Tesco Bank Clubcard 35-Month Balance Transfer Credit Card	35 months	2.7%	£54	18.9%
MBNA Platinum Credit Card	35 months	2.99%	£59.80	18.9%
Lloyds Bank Platinum 35-Month Balance Transfer Credit Card	35 months	3%	£60	18.9%
Bank of Scotland Platinum 35-Month Balance Transfer Credit Card	35 months	3%	£60	18.9%
Sainsbury’s Nectar Balance Transfer Credit Card	34 months	2.89%	£57.80	18.9%
HSBC Credit Card	34 months	3.3%	£66	18.9%

*Get £15 cashback if you transfer £1,000 in first 90 days

As you can see, Tesco’s longest 0% balance transfer card is now a real contender, with only a marginally higher transfer fee than Barclaycard’s 35-month card. However, you can get an extra month free of interest – with a bigger fee – with both Barclaycard and Virgin Money.

It’s also worth noting Sainsbury’s makes it onto the best buy table with its 34-month 0% card.

Low-fee 0% balance transfer credit cards

Tesco’s other change was on its low-fee balance transfer credit card, which now offers 28 months free of interest for a transfer fee of a paltry 1.49%. As far as combining a low fee with a lengthy 0% period goes, it’s a hell of an offer. However, if you can pay your balance off quicker, you can pay even smaller fees as the table below demonstrates.

Credit card	0% period on balance transfers	Balance transfer fee	Fee paid on £2,000 transfer	Representative APR after 0% period ends
Santander 123 Credit Card*	23 months	None	£0	16.5%
Halifax 0% Balance Transfer Fee Offer MasterCard	16 months	None	£0	18.9%
Nationwide Select Low Balance Transfer Fee Credit Card**	15 months	0.55%	£11	15.9%
Nationwide Low Balance Transfer Fee Credit Card	15 months	0.65%	£13	17.9%
Post Office Platinum Credit Card	18 months	0.79%	£15.80	17.8%
Halifax All in One Credit Card	19 months	1%	£20	18.9%
Barclaycard Platinum	24 months	1.15%	£23	18.9%
Virgin Money Balance Transfer Credit Card	26 months	1.25%	£25	18.9%
Tesco Bank Clubcard 28 Month Balance Transfer Credit Card	28 months	1.49%	£29.80	18.9%

*£24 annual fee

**Nationwide current account customers only

Low APR cards

As with the 0% purchase cards, the low APR cards on offer from supermarkets are not the very best around, but they do come with the added bonus of loyalty points on your spending. The Tesco card also comes with a three-month 0% period on both spending and balance transfers.

Card	APR	0% offer?
Bank of Scotland Low Rate Credit Card	6.45%	No
Lloyds Bank Platinum Low Rate Credit Card	6.45%	No
Tesco Bank Clubcard Low APR Credit Card	7.8%	Three months on both balance transfers (with no transfer fee) and purchases
Sainsbury’s Bank Nectar Low Rate Credit Card	9.9%	No

Cashback cards

Asda Money is the only supermarket to offer a cashback credit card.

You can get 1% cashback when you use the card at Asda stores or petrol stations and 0.5% cashback everywhere else. The card also offers 12 months interest-free on balance transfers for a 2.9% fee.

It’s a good deal if you are a regular Asda shopper as this is where you can earn the top rate of cashback and the card comes without an annual fee. However there are better cards that can offer a boosted rate of cashback.

For example the American Express Platinum Cashback Everyday card pays 5% cashback during the first three months (capped at £100), plus up to 1.25% thereafter depending on how much you spend over the year.

For a full guide read The best cashback credit cards.

More on credit cards:

The best cashback credit cards

What REALLY damages your credit rating

The best credit cards to use on your travels

The best low-fee balance transfer credit cards