Save £100s on your supermarket shopping this year

Use these cards wisely and save a fortune on your groceries!

Many of us now spend a vast amount in the supermarket giants, thanks in no small part to the fact you can get everything from your food shop to contact lenses and car insurance there. Unsurprisingly many of them now offer their own branded credit cards, offering rewards on your loyalty.

But which one offers the best return?

The Nectar credit card

American Express offers its own Nectar card credit card, and has recently launched a promotion for new users. So long as users spend £500 within the first three months, they will accrue a bonus 5,000 points, worth a minimum of £25 depending on where you use those points (some partners are offering double value redemptions).

John Fitzsimons looks at the easy ways you can boost your loyalty points, and nab all sorts of free goodies!

Two points are gained for each £1 spent at Nectar partners, with one point for each £1 spent everywhere else. What’s more, if you use your Nectar card at the same time as the credit card you can earn double the points – that’s up to four points for every £1 you spend.

One of the great things about the Nectar loyalty scheme is that there are loads of different partners – far more than Tesco enjoys, for example, which can help you keep pretty much of all the money you spend each month going into Nectar partners.

So let’s have a look at how many points you can earn over a year with the Nectar credit card, and therefore how much you can save on your shopping each year. As with all of these sorts of cards, you really have to put as much of your spending on the credit card each month as you possibly can in order to get the best possible benefit.

For argument's sake let’s assume you spend £900 on your credit card each month. And let’s say that £600 of it is spent in Nectar partner stores.

Over a year that comes to £10,800 on the card, with £7,200 of that coming in Nectar stores. That means up to 28,800 points just in the Nectar stores, with an additional 3,600 points for money spent elsewhere, a total of 32,400, before you count the bonus 5,000 points.

According to the points calculator on the Nectar website, that gives you a total of £185 off your shopping at Sainsbury’s!

The Sainsbury’s Finance credit card

If you do all of your shopping at Sainsbury’s, an alternative is the Sainsbury’s Finance Nectar credit card.

Again, you’ll earn two points on all of your shopping at Sainsbury’s for each £1 you spend, and one point for each £5 you spend elsewhere.

Related goal

Cut your food bills

As food prices continue to rise, here's some handy ways to keep your food bills under control.

Do this goal

It doesn’t take a rocket scientist to see that this is not anywhere near as generous a scheme as that offered by the Nectar credit card from American Express, even though you can still earn double Nectar points if you present your Nectar card at the same time as the Sainsbury’s credit card for your shopping at Sainsbury’s.

Let’s still assume that you spend £600 a month in Nectar stores (we’ll say half in Sainsbury’s and half in other stores) and £300 elsewhere. For the £300 spent in Sainsbury’s you’ll get four points for each £1 – that comes to a total of 1200 points each month. Assuming the £300 you spend in other Nectar stores offer a return of two points for each £1 you spend, that comes to 660 points (60 from the credit card itself, and 600 from your Nectar card). And finally the £300 spent elsewhere will give you a return of a further 60 points each month.

In total then, that’s a return of 1,920 points, and over a year that means 23,040 points, equivalent to about £115.

A good return on your spending, undoubtedly, but someway behind that on offer from the American Express Nectar credit card, though remember American Express cards are not accepted everywhere..

One additional feature which may boost the appeal of the Sainsbury’s card is the fact that it offers 0% interest on purchases for a full year. So if you know you have a couple of large purchases on the horizon – perhaps a holiday or a wedding – then you can seriously boost your points grabbing by using this card, and only paying off that purchase in stages.

The Tesco Clubcard credit card

This is my own card of choice, given that most of the money that leaves my back account each month ends up in the Tesco coffers.

With the Tesco Clubcard credit card, you get one point for every £4 you spend wherever you are. What’s also useful is that the credit card doubles as your actual Clubcard, so you benefit from the double Clubcard points currently on offer on shopping at Tesco itself.

The best of the rest

It would be remiss of me to ignore the fact that there are alternative supermarket branded credit cards out there which will offer you a bonus return on the spending you do there.

One excellent card is the Partnership credit card from John Lewis and Waitrose. With this card you earn one point for every £1 you spend at John Lewis, Waitrose (and both of their websites) as well as Greenbee.com and Ocado.com. You then earn a further point for every £2 spent elsewhere, with 500 points equalling a £5 voucher.

Alternatively, there is the Marks & Spencer credit card. Again, it offers one point for every £1 spent at M&S, or £2 elsewhere. 100 points then equal a £1 voucher, and you’ll be sent those vouchers four times a year.

With both of these deals you are looking at around £72 worth of vouchers after a year of spending on the model I’ve used for each of these cards thus far.

Whichever deal you go for, it should be clear that it’s absolutely crucial to spend as much as you can on your credit card to get the best return. That doesn’t mean to spend more than you usually would, but rather to put as much of the money you spend each month on your plastic as possible.

More: The cards you’re conned into using | My top seven savings accounts