Asda launches cashback credit card
Asda has rebranded its financial arm as Asda Money and launched a new cashback credit card.
The launch of Asda Money, which coincides with several other high-street retailers moving into financial services, has revamped its previous array of products, including introducing a new credit card.
The supermarket giant has offered financial services for 10 years under the brand Asda Finance, with insurance products, travel money and a credit card part of its arsenal.
The card offers 1% cashback on Asda shopping and fuel, and 0.5% on purchases made elsewhere, an upgrade from the previous credit card the supermarket offered.
However, the products will only be available online, and not at Asda's 542 stores nationwide.
Competition for banks
Kevin Mountford, head of banking at MoneySupermarket, says the relaunch brings more competition to the big banks, which is welcome news to consumers.
He adds: "The supermarket sector in particular has played a big part in financial services over recent years and Asda is the latest welcome addition."
Asda isn't the first high-street retailer to move into financial services. In June, Marks & Spencer announced it would be opening M&S Bank in its stores, offering current accounts at first, alongside its online operation M&S Money.
Tesco Bank and Sainsbury's Bank also offer savings accounts, insurance products and credit cards, and Tesco Bank is understood to be eyeing a move into current accounts.
This article was written for our sister website Money Observer
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.