New 5% cashback credit card from Sainsbury’s

Supermarket giant Sainsbury's has launched a cashback credit card paying a whopping 5% cashback. There's a catch though...

Sainsbury’s has entered the cashback credit card market, with the launch of the Sainsbury’s Cashback Credit Card offering a 5% return on your spending.

But the headline rate is only available on all shopping at Sainsbury’s over the first three months, capped at £50 per month.

There is also a £5 a month cashback reward each month when you spend at least £250 at Sainsbury’s and £250 elsewhere.

Best of all, there’s no fee with the card.

Interest-free purchases and balance transfers

Somewhat unusually, the Cashback Credit Card also boasts some 0% interest periods that are not to be sniffed at.

There’s 0% interest on purchases for six months, offering the chance to earn cashback on your spending without having to clear the balance all in one go. There’s also 15 months of 0% interest on balance transfers, with a 3% balance transfer fee.

How does it compare?

The Sainsbury’s Cashback card will certainly appeal to dedicated shoppers at the store, but unless you always do your shopping there – and at £250 a month, it’s rather a lot of shopping – you may be better off with a rival card.

There are three main alternatives:

American Express Platinum Cashback

The American Express Platinum Cashback credit card pays 5% cashback in the first three months, capped at £100, no matter where you do that spending. After that there’s a rate of 1.25% cashback, though this doubles in your anniversary month with the card to 2.5%.

However, the annual fee of £25 eats into your cashback return.

Capital One Aspire World

The Aspire World card from Capital One also pays 5% in the first three months (also capped at £100), but there’s no annual fee to worry about.

The cashback rate you get after that depends on how much spending you do, up to a maximum of 1.25%.

Santander 123 Credit Card

Another card with an annual fee, this time of £24. The cashback rate you enjoy with the Santander 123 card depends on where you do your spending – you get 1% at supermarkets, 2% at department stores and 3% on fuel (capped at £9 per month)

One big bonus with this card is that the cashback is paid monthly rather than annually.

Check out The best cashback credit cards for more.

The Sainsbury’s Nectar Credit Card

The cashback card is not Sainsbury’s only new plastic offering. The supermarket has also revamped its Nectar Credit Card, offering a greater points return on spending than usual.

In the first three months with the card, for every £1 you spend at Sainsbury’s you’ll receive 10 Nectar points. That’s FIVE TIMES the usual return. After that, you’ll get back four points for every £1 spent at the supermarket.

[SPOTLIGHT]The return for money spent elsewhere is not so good though – one Nectar point for every £5 spent on the card.

0% periods

Not only do you get a boost to your points, but the Nectar Credit Card comes with the same interest-free periods as the Cashback Credit Card.

So that’s 15 months of 0% interest on balance transfers (with a 3% fee) and six months 0% interest on spending.

How it compares

If you do all of your shopping at Sainsbury’s and avidly collect your Nectar points, this card will look pretty tempting.

But if you vary where you shop, or tend to stick to rival supermarkets like Tesco or Waitrose, this is not the card for you.

You can read more about the Nectar scheme and how it compares to other loyalty schemes in The top loyalty schemes for shoppers.

Getting a better 0% deal

Both of these cards offer interest-free periods on balance transfers and purchases. And while that’s a nice bonus feature, there are far more lengthy deals on offer.

For example, on balance transfers Barclaycard has just revamped both of its Platinum credit cards, so that they offer 23 months and 22 months of 0% interest respectively (with 2.8% and 2.6% balance transfer fees). Read Barclaycard launches 23 month interest-free balance transfer credit card.

Indeed, there’s a pretty wide range of cards offering 22 months of 0% interest, including from Sainsbury’s supermarket rival Tesco. Check out Tesco increases Clubcard card balance transfer period for more.

And then on purchases, you can get a whopping 16 months of 0% interest on your spending with the top card – the Tesco Clubcard credit card.

There are 15- and 14-month 0% deals on offer from the Halifax All in One and Barclaycard 14/14 Platinum cards too.

Read The best 0% purchase credit cards for more.

More on credit cards:

The best 0% balance transfer credit cards

The best 0% purchase credit cards

Luma 0% credit card improves your credit rating

50% transfer fee refund on Lloyds Platinum balance transfer credit card

Best credit cards if you have bad credit