New Amex Nectar Card – Points Don’t Make Prizes

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MSE_Martin
MSE_Martin Posts: 8,272 Money Saving Expert
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New Amex Nectar Card – Points Don’t Make Prizes

American Express has a rewards credit card, which gives you Nectar points with every purchase you make..

The Facts

As the name suggests, this card allows you to accrue Nectar points - the reward scheme backed by retailers such as Sainsburys, BP and Debenhams. You will get 1 Nectar Point per £1 spent in normal stores, and 2 for every £1 spent in linked Nectar retailers.

Its regular interest rates are nothing special - its standard rate is 12.9%, and Amex has just stopped all balance transfers for new customers - so to take full advantage you really have to pay off your card in full every month. (This is of course the golden rule for using any reward scheme – see Best Cashback Cards)


The Spin


Amex claims that you earn 4 points when you ‘double dip’ and use your Amex Nectar and Nectar loyalty cards together. However, this is a cleverly constructed myth. When shopping in Sainsburys, Threshers, or anywhere else that accepts Nectar, you can always use your Nectar loyalty card in conjunction with whichever Credit or Debit card you use.

This is all about the ‘multi-use’ myth that tries to link stores together, in reality all the stores give their own points separately. So 2 per £1 it is, in the Nectar network.


How good are Nectar Points?


When Nectar originally launched, its link with Barclaycard was hideous; the value of spending on the card was a pathetic 27p per £100 spent. People were duped into thinking they were getting something for nothing.

The reason companies use reward schemes is to cloak the actual value of rewards in a grey mist. The scheme lacks transparency so credit card companies get to look like they’re paying big rewards but at little cost. See Credit Card Rewards article for full details.


How does Amex Nectar compare to the best cashback cards?


Not too favourably, especially to Amex’s existing card range.

Spending in a normal store:

This should always be the prime evaluation, as most people don’t spend in linked stores.

Nectar Amex: Pays 1 point per £1 spent
Nectar Point: Average value 0.54p (see How to Value your Loyalty Points for full details)
Total Return per £100 spent: 54p

We can compare this to the top cashback cards on the market (see Best Cashback Cards for full details):

Conran*
and Egg Money: Pay 1% cashback on all spending (up to £20,000 with Egg).
Total return per £100 spent: £1 (assume 10k spending a year)

Amex Platinum*: Has tiered rates of cashback, paying 2% for spending over £7,500 a year.
Total return per £100 spent: £1.10 (at 10k spending, it pays £1.55 at 20k spending)

Therefore compared to Amex’s own range, and the other market best buys, the Amex Nectar card is awful.


Spending in a Nectar Linked store (e.g. Sainsbury)

Taking into account the 2 points per £1, the Amex Nectar card would earn you £1.08 per £100 of spending.

Here, it beats Conran and Egg Money; however for high spenders Amex Platinum still blows it out of the water.

Therefore, this card should only ever be used in Nectar stores, providing the card is paid off in full each month. And even then it is beatable.


P.S. You may also like to read my blog on this subject grrrr.

P.P.S.
All links which have a * help this site stay ad-free and free to use, as they’re ‘affiliated links’ which invisibly take you usually via commercial price comparison services like Moneysupermarket, Uswitch or Find, which then pay this site.

You shouldn’t notice any difference, the links don’t impact the product at all and the editorial line (the things I write) is NEVER impacted by the revenue. If it isn’t possible to get an affiliate link for the best product, it is still recommended and still included in exactly the same way. For more details read how this site is financed.




Martin
Martin Lewis, Money Saving Expert.
Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.
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Comments

  • GlennTheBaker
    GlennTheBaker Posts: 2,974 Forumite
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    Martin, I've just got a Barclaycard Platinum and I called to connect it with my Nectar card. They said no problem, your Barclaycard is now linked to your Nectar account.

    I only got the Barclaycard at the beginning of this week.
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  • 03022242
    03022242 Posts: 350 Forumite
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    the same date vodafone will refuse to accept it
    Named after my cat, picture coming shortly
  • daveboy
    daveboy Posts: 1,400 Forumite
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    I nearly posted on this some time ago - I think Nectar will die within 18 months, and that the next to go will be Debenhams.

    Sainsbury's will soon wish they continued with their old reward card, or didn't have one at all as I feel they will be the only 'big' company which many people use that will still be in the scheme.
  • GlennTheBaker
    GlennTheBaker Posts: 2,974 Forumite
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    Al_Mac wrote:
    Nectar/Barclaycard cease to be connected come 31st August.

    :eek:

    Thanks, I was not aware of that!
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  • bbruce
    bbruce Posts: 369 Forumite
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    It's pretty apparent Debenhams are getting cold feet with Nectar - they never ask you if you have a card and if you forget, you've lost it unless you go back the same day.
    Nectar have just started a radio ad campaign - looks like theyr'e getting desperate.
    With Vodafone pulling out too, BP will be getting cold feet next.

    Learn from the mistakes of others - you won't live long enough to make them all yourself.
  • Lawbag_2
    Lawbag_2 Posts: 361 Forumite
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    Im sure you are aware of why companies link with Nectar. It is a way of stores "learning" the spending habits of its customers, and targeting promotions and offers to not just potential customers, but regular purchases, and ensuring that regular essential supplies go to them.

    I had a laugh this morning, because my wife uses her Boots card for pretty much everything, and they "target" her with goods Boots knows she buys. In her "pack" was a 50pence voucher for a pack of Boots Condoms! So thats where she buys them!!!!!!!!!!!!! ;)
    "See you on the Other Side"
  • omega27
    omega27 Posts: 260 Forumite
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    bbruce wrote:
    It's pretty apparent Debenhams are getting cold feet with Nectar - they never ask you if you have a card and if you forget, you've lost it unless you go back the same day.

    Was in with the wife for the sale the other week. Lady infront only remembered her card after the payment had gone through, they wouldn't credit the points. No mention of Nectar anywhere in the store. Can't be long....
  • Rafter
    Rafter Posts: 3,850 Forumite
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    I guess the Amex Nectar card is twice as good as the Barclaycard it replaces (from a Nectar Points view) though?

    £10k spend a year is quite a lot for the average person too.

    I wonder how long it will be before the retailers start protesting about how they have to pay Amex more in retailer fees to fund the higher cashback/ points too.

    I guess at some point Visa and Mastercard will complain that their fees have been regulated down (which is why cashback and points are being withdrawn all over the place) while Amex can happily pick up new customers and business with its higher, less regulated retailer fees.

    R.
    Smile :), it makes people wonder what you have been up to.
  • balsingh
    balsingh Posts: 1,493 Forumite
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    With things potentially looking bad for nectar, I get the feeling that all the places that accept Nectar points as payment (places you can spend Nectar points) will probably soon jump on the bandwagon too and stop accepting them. My suggestion: spend those points asap!!!
    If you found my comment helpful, please click the 'Thanks' button below :T
  • daveboy
    daveboy Posts: 1,400 Forumite
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    I'm not sure how far this has gone through the company, but I know that at my local Sainsbury's the cashier will no longer ask you if you want to use your Nectar points - it is for the customer to tell the cashier.

    I see that as the first step in them edging out of it - they've attempted to say it's to quicken the transaction up, but if that was the case it would have been done a long time ago.
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