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Tesco v Sainsbury - which supermarket has the best credit card?

You choose a supermarket for your weekly shop but should you use its credit card? We investigate the best supermarket credit cards and look at how the Tesco and Sainsbury’s cards compare

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Which supermarket has the best credit card?
Which supermarket has the best credit card?

Credit cards are no longer just a convenient form of spending, they also come with a range of added extras to entice you into parting with your cash. This can be a benefit if you use them in the right way.

Supermarkets are well established in the credit card market and Tesco and Sainsbury’s lead the field. 

As well as using these cards for your groceries, you can also use them to collect rewards, in the form of Nectar or Clubcard points, which can be redeemed against other things you buy.

They’re not the only supermarkets with credit cards, however. Here we look at everything you need to know about how supermarket credit cards work, including how they can benefit you and which one offers the best rewards. We also reveal what you need to consider before applying so you can decide which card might be best for you.

Which supermarket credit card has the best rewards?

The two main supermarket loyalty schemes are Sainsbury’s Nectar points and Tesco’s Clubcard points.  Here we look at both in a little more detail.

How to earn Nectar points with the Sainsbury’s credit card

You need to have a Nectar card to get the added benefits of the Sainsbury’s Bank credit card but there’s no fee for this card. 

You’ll earn three points for every £1 you spend at Sainsbury’s or Argos and one point per £5 spent with any other retailer. There’s also an opening bonus of 8,000 points if you spend at least £400 at Sainsbury’s, Argos, Habitat or Tu Clothing in the first two months. 

Each Nectar point is worth 0.5p, so 100 Nectar points are equivalent to 50 pence. 

When it comes to redeeming the points you’ve built up, you can either use them at Sainsbury’s itself or one of its partners. These include British Airways, eBay, Eurostar, Sky and around 300 other brand names. You can see a full list on the Nectar website

How to earn Clubcard points with the Tesco credit card

With a Tesco credit card, you will earn one Clubcard point for every £4 spent at Tesco and one point for every £8 you spend elsewhere. This is on top of the standard one point per £1 spent you receive when using the retailer’s loyalty Clubcard scheme. So, if you use both the Clubcard and credit card for your Tesco shopping, you’ll get five points for every £4 spent. 

Every three months your points are converted into vouchers, and these can be used for money off your Tesco shopping. Each point is worth 1p so 500 is equivalent to a £5 voucher.

You can also redeem them at a Tesco reward partner for three times the value. Reward partners include Pizza Express, RAC, Disney and Legoland.   

The best from the other supermarkets

It’s not just Sainsbury’s and Tesco who offer rewards-based credit cards, however. And it’s not worth getting either if you do your supermarket shopping elsewhere – at Asda, for example. Here is a selection of other reward credit cards from big stores:


With Amazon’s credit card, you’ll earn 0.75 points for every £1 you spend at Amazon and 0.25 points for every £1 spent at other shops. Amazon Prime members will get 1.5 points for every £1 spent at Amazon. It also comes with a £40 Amazon voucher as a welcome bonus. 

John Lewis

For every £4 you spend at either Waitrose or John Lewis, you’ll earn five points. You’ll earn one point for spending anywhere else. One point is equivalent to one penny and when you’ve earned 500 points this is converted into a voucher for £5 to spend at one of the branches or online.  


Every £1 spent at M&S earns you two points for the first year you have the credit card. After this, it's one point for every £1 spent. Whenever you use the card elsewhere, you’ll earn one point for every £5 spent. Every point is worth one penny to spend at M&S.

How to make the most of your reward credit card

Every time you spend on a reward card, you’ll be paid, usually in the form of points or vouchers to redeem at a later date. The more you spend, the more you’ll build up in rewards. 

If you were to do all your spending on that card and pay it off every month, you’d essentially get the added benefits for free. They’re not an excuse to overspend though and need to be treated as if you were using your debit card for your normal monthly spending. 

They also only work if you’re clearing the card each month. If not, you’ll be paying interest on the debt and this will wipe out any benefits you’re earning. 

It’s worth setting up a direct debit payment, or a monthly reminder, to clear the card on time to make sure you don’t have to pay any interest or late fees. 

Supermarket credit cards aren’t designed for major outlays, as their interest rates tend to be higher than other cards, but they may have extra benefits on top of the rewards you can earn. 

For example, many have 0% balance transfer rates, which can be attractive if you are looking to transfer an existing balance or you want to take advantage of 0% purchase rates to spread the cost of a big new purchase. However, with both of these, they’re only worth it if you can clear the debt within the 0% period; if not, you’ll start paying high-interest rates. 

What to consider before taking out a supermarket credit card

There are clear benefits to a supermarket credit card but they’re only worth taking out if you’ll use the points you’re earning, and if you can clear the card each month. 

It’s also worth saying that there’s no point paying more for your shopping to get rewards. If you generally shop at Aldi, for example, then switching to Waitrose for the sake of the rewards is unlikely to leave you quids in.

So, take some time to calculate how many points you might earn in a month, and what you would use these for. If you always shop at Tesco, it makes sense to have a Clubcard as you’re essentially being given free benefits in the form of points you can redeem. 

However, if you aren’t loyal to one supermarket, store-linked credit cards might not be your best bet. A regular cashback credit card might work better for you – these give you cashback every time you use them. 

How much will a supermarket credit card cost you?

If you use a supermarket credit card correctly and always pay it off on time, it shouldn’t cost you anything extra, unless there’s a fee to open the card. 

If you can manage payments well, you can use the card for all your normal spending and earn points or rewards for doing so – just be careful that you’re not tempted to spend more than you normally would.

These cards tend to have high interest rates, however, so if you don’t clear your card’s balance, you’ll be hit with interest charges on whatever money you owe. You’ll also be charged a late payment fee if your monthly payment isn’t made on time.

Missing payments will also negatively affect your credit history for six years. 

To be accepted for one of the market-leading cards, you will also need a good credit score as lenders will want to know you can pay the money back in a responsible way.

When you apply for a credit card, a record of the application is placed on your credit history. This means there’s a danger here: if you’re rejected for a supermarket credit card, your credit score will fall, making any subsequent applications even more likely to fail.

If you make several applications over a short space of time it can give the appearance that you’re unable to manage your finances.

One way around this is to use a free credit card eligibility checker. There are lots to choose from and they will give you an idea of the type of credit card you may be approved for, and the likelihood of being accepted. These types of checks don’t leave a mark on your credit score either. 

Are supermarket credit cards any good?

Tesco and Sainsbury’s are the leaders when it comes to supermarket credit cards and if you are a regular shopper at either store it’s worth considering whether the credit card might be of use. 

You’ll be paid in points to do the shopping you were already doing, and these can be redeemed against future shops or at partner companies.

However, the reward credit card market is complex and competitive so before you jump in and apply, look at what else is on offer. 

There are credit cards that will give you cash back that you can spend anywhere you choose, not just at your usual supermarket and its list of retail partners. 

The Amex platinum cashback card, for example, pays 5% cashback in the first three months, to a maximum of £100. After that, you’ll receive 0.5% cashback on everything you spend up to £10,000 and 1% on anything over this.  

There is also an Amex Nectar credit card which offers 20,000 Nectar points if you spend £2,000 in the first three months after receiving the card. After that, you’ll earn two points for every £1 spent – although it’s worth noting that there’s a £25 annual fee after the first year.

About Rebecca Goodman

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