Review: the Nectar Credit Card from American Express

This is our review of the Nectar Credit Card from American Express.

In January 2021, Avios and Nectar launched a partnership. You can transfer Nectar points into Avios – and vice versa – which means that this credit card is of interest to Avios collectors.

It is part of our series of articles looking at the major UK loyalty credit cards and discussing whether of not they are worth applying for.  These posts are linked to the relevant sections of the ‘Credit Cards Offers‘ area in the menu bar. Our other UK airline and hotel credit card reviews can be found here.

Key information

Key link: the Nectar Credit Card from American Express application form

Key facts: No fee for year 1, £30 annual fee from year 2

The representative APR from year 2 is 36.8% variable.  The representative APR on purchases, and in the first year, is 30.0% variable.

Reward credit cards generally have high interest rates and are not suitable for anyone who does not pay off their full balance each month. If you do not clear your balance, you should look for a non-rewards credit card with a low interest rate.

About the Nectar Credit Card

The Nectar Credit Card from American Express is issued directly by American Express.  The Nectar loyalty scheme is used by selected UK retailers including Sainsbury’s and Argos.

What is the Nectar Credit Card sign-up bonus?

The Nectar Credit Card from American Express has a generous sign-up bonus. It offers 20,000 Nectar points which are worth £100 when spent with any Nectar partner.

More relevant for HfP readers is that 20,000 Nectar points convert into 12,500 Avios. This page of ba.com explains how to convert points between the two schemes.

You need to spend £2,000 within three months to receive the bonus.

The legal stuff: Bonuses are subject to status, for new cardholders only (as defined in the next section) and terms and conditions apply. You must be over 18 to apply.

What are the rules for qualifying for the Nectar Credit Card sign-up bonus?

The bonus is only available to customers who have not held a personal American Express card in the previous 24 months.  This article looks at which Amex sign-up bonuses you may still be eligible for.

You will definitely receive the bonus if you are only a supplementary cardholder on someone else’s American Express card. As far as Amex is concerned, that card belongs to the primarily cardholder and does not make you an ‘existing cardholder’.

If you do not qualify for the bonus, you can still apply. You still receive the other card benefits including ‘no fee in the first year’.

What is the Nectar Credit Card annual fee?

The Nectar Credit Card from American Express comes with a £30 annual fee. For the first year, however, the card is free.

This gives you 12 months to decide if you can spend enough on the card to justify keeping it long term. If not, you can cancel within the free first year and you will have paid nothing.

What do I earn per £1 spent on the card?

You earn 2 Nectar points per £1 of general spend. This is effectively 1% cashback if you use the points at Sainsbury’s or Argos, where they are worth 0.5p each.

2 Nectar points per £1 converts into 1.25 Avios per £1.

This is on top of the standard points you earn at Sainsbury’s and other Nectar partners.  This means that your total Nectar earning when shopping at Sainsbury’s is 3 points per £1 if you use this card – two points come from the credit card and one point comes from your usual in-store Nectar earning.

How does this compare with British Airways American Express cards?

When converted to Avios, 2 Nectar points are worth 1.25 Avios.

This means that the £30 Nectar Credit Card is more generous than the free British Airways American Express Credit Card or the free Barclaycard Avios Mastercard (1 Avios per £1 and a smaller sign-up bonus).

It is less generous than the British Airways American Express Premium Plus Card or the Barclaycard Avios Plus Mastercard:

Both of these cards earn 1.5 Avios per £1, have a larger sign-up bonus and come with an annual voucher if you spend £15,000 (American Express Premium Plus) or £10,000 (Barclaycard Avios Plus Mastercard). However, the cards carry annual fees of £300 and £240 respectively.

Arguably, if you were thinking of getting the free British Airways American Express Card and knew you had no chance of spending £15,000 to trigger the 2-4-1 companion voucher, it makes more sense to get the Nectar Credit Card for the first free year.

You get a better bonus and Avios earn rate than the free British Airways American Express Credit Card and, importantly, you’d still qualify for the bonus on the BA American Express Premium Plus Card if you later decided to get that.

How does the Nectar card compare to a cashback credit card?

My default comparison card is the Lloyds Bank Cashback Credit Card.  It is free for life and offers 0.25% cashback on your spending.

For the first year, when the Nectar Credit Card is free, the Nectar card is substantially better than this. You would be receiving 2 Nectar points per £1, worth 1% in shopping vouchers or 1.25 Avios.

From Year 2, when you will be paying a £30 annual fee, you need to look at how much you are spending on the card. As long as you are spending £5,000+, your return will be better overall – even after accounting for the £30 fee – than using free cards such as the John Lewis, Amazon or Marks & Spencer credit cards.

Is the Nectar Credit Card a good option when travelling?

Not really.  As American Express adds a 2.99% foreign exchange fee, you might want to get a separate free credit card to use abroad.

Unfortunately there are no credit cards with 0% foreign exchange fees worldwide which earn airline or hotel points. (The Virgin Atlantic credit cards have 0% FX fees in the Eurozone.)  One option is to get a free card from Currensea. Currensea is a simple but clever idea. You pay abroad with your Currensea Mastercard debit card. Currensea translates the cost to Sterling with just a 0.5% fee (83% less than Amex charges) and withdraws the money from your bank account. You can find out more by clicking here. Currensea is free so there is no risk in giving it a try.

What more should I know?

You can apply for the card with a minimum personal income of £20,000.

Conclusion

For day-to-day spending, the Nectar Credit Card from American Express is a good deal, effectively giving you 1% cashback or 1.25 Avios per £1 spent.

It is, ironically, far better for earning Avios than the free British Airways American Express Card and the free Barclaycard Avios Mastercard. Both of these cards offer annual vouchers for hitting spending targets, however, which add value if you spend enough to trigger them.

If you are starting out with Avios, you may want to get the Nectar Credit Card first and then progress to the £300 British Airways American Express Premium Plus Card.

By taking this route you would still qualify for the generous 30,000 Avios bonus on the Premium Plus card, which you would not get if you were upgrading from the free BA Amex. You should also look at the Barclaycard Avios Plus Mastercard with its 25,000 Avios bonus.

The £30 fee means that – after the first FREE year – you need to be spending £5,000+ to justify the fee. For the first free year, though, the 20,000 Nectar points (12,500 Avios) sign-up bonus means that you should come out on top.

(Want to earn more miles and points from credit cards?  Click here to visit our dedicated airline and hotel travel credit cards page or use the ‘Credit Cards’ link in the menu bar at the top of the page.)

Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points. The site discusses products offered by lenders but is not a lender itself. Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as an independent credit broker.