Sainsbury’s Bank slashes Nectar points rewards on credit cards

You’ll now earn far fewer Nectar points when you use your Sainsbury’s Bank credit card.

The Nectar scheme is one of the UK’s most popular loyalty schemes, but members have been dealt a blow with changes to the way that certain partner credit cards accrue points.

Sainsbury’s Bank has contacted its credit card customers to inform them of changes to the way that shoppers are rewarded for using their card.

Currently those with a Sainsbury’s Bank credit card will earn two points for every £1 they spend at Sainsbury’s and its various brands, like Argos, Tu Clothing and Habitat. You then earn one point for every £5 spent elsewhere.

However, things are changing from 1st November. At that point, when you shop with a Sainsbury’s brand you will earn one point for every £2 spent.

That’s quite the shift ‒ if you spend £100 at Sainsbury’s with your card, currently you will get 200 points but from November you’ll only get 50 points.

One Nectar point is worth roughly 0.5p, so in cash terms that reward would drop from £1 to 25p.

Battling against rising prices

The timing of this change is obviously incredibly important. It is evident to everyone how quickly food prices are increasing at the moment, with food itself one of the biggest drivers in the overall rate of inflation.

According to the latest data from the British Retail Consortium the price of food rose by 5.1% in July, but the jump in fresh food was even starker at a staggering 10.5%, the highest seen since September 2008.

Sainsbury’s has been keen to play up its attempts to help shoppers reduce their costs too. Just this week the supermarket announced a ‘price blitz’, spending £60 million into its various money-off schemes like its Aldi price match, its Price Lock promise and everyday special offers.

It seems rather contradictory to trumpet price cuts while slashing the returns on offer for shoppers making use of its loyalty scheme credit card.

After all, many members of the scheme will want to use the Nectar points they earn in order to reduce the cost of their supermarket shopping, rather than using them for money off at partner retailers.

The Nectar alternative

The changes from Sainsbury’s Bank are obviously enormously disappointing for those who are committed to making the most of the Nectar loyalty scheme.

However, it’s worth pointing out that Sainsbury’s Bank isn’t the only provider that offers a credit card affiliated to the loyalty scheme ‒ you can also get a Nectar credit card from American Express.

Currently, that card rewards users with three points for every £1 spent with Nectar retailers, with two points for every £1 spent with the card everywhere else.

What’s more you can get a bonus 20,000 points if you spend £2,000 in your first three months with the card.

There is an important downside to be aware of though ‒ the American Express Nectar credit card comes with a £25 annual fee. And while that fee is waived for the first year, it’s an added cost that has to be considered in your calculations when determining which card is best for you.

What’s more, American Express isn’t accepted by all retailers, which will dent the rewards points you can build up when shopping

However, it’s also worth considering alternative forms of rewards credit card.

You may be better off overall making use of a cashback card for example, which reward you every time you spend with money back. Check out our run through of the best cashback credit cards to get an idea of what you could get.

Of course, whatever form of rewards card you go for, it’s vital that you pay off your balance in full each and every month. Otherwise the interest charged on your outstanding balance will swiftly eat into the rewards you build up.

Shopping around

If you only shop in one store, like Sainsbury’s, then it makes sense to go for an affiliated credit card and try to maximise your returns.

However, the cost of living crisis and the need to secure some savings means that increasing numbers of shoppers are trying alternative retailers in order to hopefully find a better deal.

That is pretty evident from the data from Kantar World Panel, which monitors the market share of the different supermarkets.

The big high street names ‒ Tesco, Sainsbury’s, Asda, Morrisons ‒ have all seen their share of the market shrink so far in 2022.

By contrast, smaller names like Lidl, Aldi and Co-op have taken a bigger slice of the pie.

Becoming a little less loyal to a single supermarket isn’t a bad idea if you’re keen to find savings ‒ you can move between retailers depending on who offers the best deal that week. But it doesn’t undermine the case for signing up to loyalty schemes. 

If anything it’s more important than ever to sign up for all of them ‒ including the newest loyalty scheme, from Asda ‒ given they are free and offer the chance to get a little back on your spending.