Sainsbury’s Finance has launched a new
credit card which offers a range of benefits for a nominal monthly fee.
For £5 a month, Gold
Credit Card users can make purchases at the relatively low interest rate of 9.94 per cent, and take advantage of several perks particularly useful for travel.
As well as the competitive rate, the product comes with worldwide
travel insurance, has no
foreign exchange transaction fees and allows interest-free cash withdrawals overseas.
Monthly fees are becoming increasingly popular, with around 20
credit cards currently on the market charging such a fee in return for added bonuses.
However, David Black at financial research firm Defaqto said the fee could deter as many consumers as it attracts.
"Credit cardholders generally are not used to having to pay a fee. The real challenge for Sainsbury's will be to attract customers to pay for something they are used to getting for nothing," he said.
Stuart McKeggie, head of
credit cards at Sainsbury’s Finance, acknowledged that there is a "consumer hurdle" with such a product, but added that
travel insurance provided is "one of the best quality products available".
