Supermarkets good value for money products too

3 Feb, 2016

The big supermarket brands have been successfully selling financial products for just shy of 20 years in the UK and the keen rates and discounted deals continue to make them a popular choice.

With all the accounts and cards being sold online or by phone the overheads are less of a burden and that translates to keenly personal finance deals regularly appearing in the best buy tables.

With no bank branches to maintain or the cost of extra ‘in store’ staff eating into profits, this ‘lean and mean’ business model gives the supermarkets a distinct advantage.

As well as competitive pricing, there’s the convenience factor including free parking right outside the front doors, 24 hours a day in some cases – something that most high street banks can only dream of.

The advertising is polished and literature cleverly positioned to ensures millions of weekly shoppers can’t help but notice the display of money and insurance advertising staring them in the face as they put their weekly groceries on the conveyor belt.

Whether you’re looking for credit cards, personal loans, mortgages, savings, insurance or travel money the shelves are stacked with award winning top value deals.

Credit cards offering reward points is a very strong product area built on the huge success of the Clubcard loyalty scheme at Tesco and Nectar brand at Sainsbury’s.

Similarly the cash back credit card from ASDA which gives you 1% back on all grocery and fuel spend is another popular loyalty based product and one that ASDA say isn’t going to be axed or cut any time soon.

Unsecured borrowing is a particularly strong area with Sainsbury’s Bank featuring prominently in the best buys with the third longest interest free term for card purchases at 25 months with Tesco Bank not far behind at 21 months.

Similarly Tesco Bank and Sainsbury’s Bank are also in the top ten for zero per cent balance transfer deals at 38 months and 37 months respectively – in touching distance of the 39 and 40 month market leading deals from MBNA Platinum and Halifax respectively.

Supermarket banks are just as competitive in the personal loans space and have dominated the best buy tables over the last three years

For loans of £7,500 and £10,000 Tesco Bank charges just 3.4% APR representative and is a top five player along with the likes of M&S Bank and Yorkshire Bank.

Tesco is also establishing itself as a credible threat in the mortgage market particularly for longer term fixed rate deals.

The supermarket banks have always excelled at offering simple no nonsense products and savings accounts is another area in which they fare well

Whilst the top slots in the savings best buys tend to be occupied by the less well known banks and niche financial players, both Tesco and Sainsbury’s are never too far off the pace with their pricing and frequently offer a better return than the main UK banking brands.

Tesco Bank also has its own current account which offers an excellent all-round proposition with Clubcard points on debit card spending, a competitive overdraft rate and credit interest of 3% on balances up to £3,000.

Switching numbers have been better than many of the big banks and that’s not really a surprise with many consumers seeing current accounts as an alternative home for some of their savings nest egg.

There’s frequently talk of challenger banks threatening the monopoly of the big high street banks, however it’s the supermarkets that have the dream combination of a huge weekly footfall and simple competitive product ranges to really make a difference.