I’m not a rate tart; opening card after card to take advantage of 0% periods has always been more trouble than it’s worth. But I’ve just taken out a credit card with Tesco – and scorched across the small print is reminder after reminder of the difference between a consumer finance company and a consumer focussed company. Say what you like about the supermarket giant; it knows how to treat consumers. In a way pure-play finance companies don’t.
For starters, it leverages the rest of its business to my advantage. Double ClubCard points on petrol means nearly two pounds back every time I fill up – for no effort. With ClubCard’s regular 5p/litre off promotions, that means almost a fiver saved – and that’s substantial. Unlike most banks, whose credit card marketing aims at new customers in a way that alienates existing ones.
Secondly, the interest rate’s simply lower – in more ways than one. The T’s & C’s state your payments are applied to the balance in a manner very few card companies operate: they pay off the highest-interest (i.e. most expensive) debt first. Most cards push any cash withdrawals (the most massively expensive use of a credit card) to the bottom of the pile, meaning that if you roll over your balance from month to month (as I did for a decade) the priciest debt sits on your balance forever. Tesco don’t do this; somebody, somewhere focussed on what was best for consumers, and realised that the standard way of doing things was wrong.
I’ll pop in a disclaimer here: I don’t work for Tesco, but do have one of its advertising agencies as a client. Doesn’t stop me being a fan. Anyway, off to the filling station for a fiver of payback…