Supermarket finances sweep poor value awards

Wednesday, 17 December 2008 10:01

Credit cards and loans from supermarkets are failing to offer the value they supposedly claim.

Which? Money has highlighted Tesco credit card as being £50 a year more expensive for an average borrower compared to the Barclaycard Simplicity Visa.

But it is not interest rates many customers look at when checking credit cards, rather the bonus loyalty points they can earn - with 43 per cent of those polled saying this is a factor.

An M&S loan of £7,500 could cost £570 more in interest than one from Your Personal Loan.

Meanwhile, savers choosing an Asda account could be losing out on £200 interest a year on £10,000 account, compared to the best buy account.

However, supermarkets do have some best buys among their ranks, as the best savings account on the market, according to Which?, is the Tesco Internet Saver.

But Tesco was knocked for promoting payment protection insurance (PPI) too strongly with its loans.

Martyn Hocking, editor of Which? Money, said: "It's easy to flick through the numerous leaflets promoting everything from pet insurance to credit cards when you're looking for a distraction in the supermarket queue.

"However, while many of products might seem tempting, you should always shop around."

Tesco, however, has hit out at the research saying it fails to compare products - particularly its credit card, fairly.

"The research is misleading. Which? compare two very different products," a spokesperson said.

She pointed out the Barclaycard Simplicity Visa has no 0% introductory offer, while Tesco credit card does.

"For many customers, a Tesco Clubcard Credit Card represents one of the best deals available. Tesco Credit Cards regularly feature in best buy tables and we offer consistently good value," she added.

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