Sainsburys Bank is supporting the use of reward schemes for credit card customers, saying they can help save money.
With over 8 out of 10 credit card users saying they will probably be spending less than last year on their cards the providers are looking at ways to incentivise their customers to use them, and reward schemes have proved very successful. The Nectar scheme is typical of the new approach to customers say Sainsburys Bank. Such cards provide real benefits to users, with the ability to save money on other items they use in their lives and ultimately reducing their costs.
The other point about reward schemes said the Sainsburys Bank spokesman is that they differentiate the credit card from many others. The usual 0 percent interest offers are everywhere so something different and real is the best way to attract users.
The worldwide credit squeeze is beginning to affect UK borrowers now, with holders of MBNA credit cards seeing interest rates climbing.
It seems that MBNA are trying to recover their losses in other markets by really pressing credit card clients, in some instances simply doubling the interest rate payable and then levying additional payments when accounts have got into difficulties.
The bottom line is that banks like MBNA can do whatever they choose with interest rates when they are classed as variable, which all credit cards are. Right now it looks like the UK borrowers are paying for the difficulties in the USA, literally. A typical example is of a lady who had never missed a payment and was what would be categorised as an excellent credit risk. Her rate went up within a couple of months from just under 16 percent to almost 28 percent. Knowing someone has the means to manage their credit and will pay the extra cost is no justification for doing so.
Barclaycard is acknowledged as being the most powerful credit card brand in the UK according to an independent study of the market.
The survey, carried out by the ACG, looked at the number of people having a card, how often it was used, customer thoughts on quality and how the brand is perceived. Having taken all these factors into consideration Barclaycard came out on top, thanks to it being the best known credit card in the country and also the second most used.
A spokesman for ACG, commenting on the results, said that Barclaycard would stand out strongly in the current economic climate since consumers look to the best known names in times of difficulty, feeling that there is less to worry about with a credit card brand they know and trust.
