Credit Building > How does the Sainsbury’s Everyday credit card work?

How does the Sainsbury’s Everyday credit card work?

Wollit Team4 minute read · Updated 30th June 2024

The Sainsbury’s Everyday credit card is a UK credit-building card meant for people with bad credit or who are trying to build their credit history.

Unlike most credit builder cards, however, this one comes with rewards, as you can earn Sainsbury’s Nectar points for your purchase, which you can redeem later.

How do Sainsbury’s credit card rewards work?

The Sainsbury’s Everyday card is among the few UK credit-building cards with rewards. The way they work is simple:

These rewards are called Nectar and are essentially points you earn for shopping at Sainsbury’s, Argos, and partner stores.
This credit card simply gives you more points as you shop. You can earn Nectar points as you spend.
You can get up to 3 Nectar points for every £2 that you spend at Sainsbury’s and its partner stores (Argos, Habitat, and Tu Clothing).
For other purchases, you earn 1 point for every £5 spent.
You can redeem these Nectar points for restaurant meals, books, or shopping vouchers.
You can see how to redeem the Nectar points on the Nectar website or in the Nectar app.

This credit card can be a great choice if you have a Sainsbury’s nearby or regularly shop at Argos. Making small, regular purchases on a credit card and then paying them in full and on time is one of the best ways to build your credit history. Other cards also offer Nectar rewards, but they are not necessarily aimed at people with poor credit scores.

What is the interest rate for a Sainsbury’s Everyday credit card?

Sainsbury’s Everyday credit card has an interest rate of 29.4% APR (variable). If you carry a balance on your card, you will be charged this interest rate on the outstanding amount.

Sainsbury’s also offers an opportunity to reduce your interest rate.

To reduce how much you pay on interest, you need to use your card regularly and make at least the minimum payment on time. Then, you could become eligible for an APR reduction within the first year of you opening your account.

The good news is that Sainsbury’s credit card does come with up to 56 days interest-free period for purchases. As long as the bill is paid in full every month by the payment date, you don’t have to pay the 29.4% APR charges.

What is the minimum payment for the Sainsbury’s Everyday credit card?

The minimum payment that you need to make each month for the Sainsbury’s credit card is 2.25% or £5, whichever is greater.

Here are a few reasons why you should make at least the minimum payment each month:

If you don’t pay it on time, you’ll be hit with a £12 late payment fee.
Your credit score will take a hit. According to Experian, it can be up to 80 points.
If you make the minimum payment on time, your APR might go down. Your credit limit might also be increased.

However, if you can, try to pay more than the minimum amount. Here are three reasons why:

If you pay just the minimum amount, you will still have to pay interest on the difference between this and the outstanding card balance.
If you pay your card balance in full and on time each month, you will essentially have to pay zero interest.
Paying your balance in full and on time also helps you improve your credit score much faster.

What is the Sainsbury’s Everyday card credit limit?

The Sainsbury’s Everyday credit card has an initial credit limit of up to £2,000, which is quite generous by credit-builder card standards. This is the maximum initial limit—the actual initial credit limit that you’ll be offered will depend on your situation and credit history.

Your credit limit could also increase if you use the Everyday card often and make at least the minimum payment on time each month.

However, the Sainsbury’s card has no scheduled credit limit review like other credit-building cards.

What other fees does the Everyday credit card charge?

Besides the APR, the Sainsbury’s Everyday card also comes with other fees:

A £12 late payment fee. A late payment can also lower your credit score, so set a Direct Debit and pay all credit card bills on time.
A 3% cash advance fee (if you withdraw money at an ATM).
A 2.75% foreign exchange fee.
And another £12 fee for going over the credit limit.
There are also fees for money transfers, balance transfers, and more.

The good news, however, is that Sainsbury’s Everyday credit card has no annual fee, making it a cost-effective option for your everyday use.

What are the Sainsbury’s Everyday card eligibility criteria?

According to Sainsbury’s, the Everyday card is available to all UK residents over 18 years old. A minimum credit score is also not required for it.

Other than this, the eligibility requirements are a bit unclear. Hence, we recommend you use Sainsbury’s eligibility tool to see if you qualify for the Everyday credit card.

This tool is free to use; it will give you a result in just a few seconds and won’t affect your credit score.

Best of all, Sainsbury’s guarantees the 29.4% APR if the eligibility checker says you can apply.

How can the Sainsbury’s Everyday credit card help me improve my credit score?

Here is how you can use the Sainsbury’s Everyday credit card to improve your credit score:

Making all payments on time and in full can help you build your credit history. This is the main piece of your credit score.
Getting a new credit card can also increase your total credit limit, another factor in your credit score.
The rewards it offers could potentially make it easier for you to use the card more often for small purchases. Using a credit card regularly also helps build your credit history.

However, don’t forget that the Sainsbury’s Everyday is still a credit builder card. This means that it comes with the same risks:

A much higher APR than on regular credit cards.
A lower initial credit limit can make it easy to max out your card and accidentally hurt your credit score.
As with any credit card, it can also worsen your debt problems if not managed properly.

Because of these reasons, you might want to look into safer alternatives, such as dedicated credit-building apps.

One such app is Wollit. Building your credit history with a credit card requires you to purchase goods on debt and repay them as soon as possible. With Wollit, you only need to pay a fixed monthly fee. Wollit then reports this subscription as a loan repayment to the credit reference agencies.

This directly helps you build your credit history and improves your credit score – while keeping you safe from high APR charges or maxed-out credit limits. More importantly, as your credit score improves, you’ll get a chance to become eligible for credit cards with higher credit limits and lower APRs.