More People Buying Train Season Tickets On Interest Free Credit Cards To Spread The Cost Of Fares

28 December 2016

  • Between 2005 and 2016, average train ticket increased by 59% in price(1)
  • Season ticket prices to rise 1.9% on 2nd January 2017
  • Sainsbury’s Bank launches an online tool to reveal how train fares have increased in the past 10 years, and the price you’ll pay after the 2017 annual rise in fares

Sainsbury’s Bank has launched a new free online ‘train-inflation’ digital tool, which reveals that the average train ticket increased by 59% between 2005 and 2016, and by 16.9% between 2011 and 2016. Its ‘train-inflation’ barometer allows people to see what their new standard train ticket will be next year, and estimate how their fares have increased over the past 10 years.

Regulated rail fares in England and Wales and regulated peak-time fares in Scotland will rise by 1.9% next year(2). The rise is determined by July’s Retail Prices Index (RPI) inflation measure and will take effect from 2 January 2017.

New research(3) from Sainsbury’s Bank reveals that 32% of people who commute to work by train are planning to use interest free credit cards to buy their next annual travel cards to save money. Indeed the bank, which offers a credit card with one of the longest interest free purchase periods available for 28 months, says that in 2015 it saw a 40% increase in the number of people using its credit card to buy train tickets compared to 12 months earlier.

Analysis of Sainsbury’s Bank’s credit card data reveals a huge increase in both transactions and expenditure on train travel over the past five years. From 2011 to 2015 there was a 98% rise in transactions and the total spend increased by 104%. The average transaction on train travel last year was 3% higher than in 2011.

Simon Ranson, Head of Banking at Sainsbury’s Bank said:“Locking in 2016’s season ticket price might even be an option for some, those who haven’t purchased one before, or whose season ticket is up for renewal in the next few days. Using an interest free credit card will mean you can lock in the price and pay it up over time.”

Further action taken to beat rises in train fares

Some 65% of people who have commuted to work by train for the past three years took some form of action during this period to combat rising train fares. This included working additional hours or overtime (5% of train commuters); walking to work (6% of people); changing jobs so their commute is less expensive (6% of train commuters), and 3% who claim that they became involved in a work car share scheme to cut costs.

Over the next 24 months 63% of train commuters are considering taking some of these actions or others to offset the growing cost of their train fare to work.

Action taken over the past three years to offset the cost of their rising train fare Number of people who claim to have done this in the past 36 months Number of people who are considering doing this over the next 24 months
Gave up work completely 231,026 (2%) 77,009 (1%)
Moved home so I could be closer to work 590,399 (5%) 359,373 (5%)
Worked from home more 641,738 (6%) 564,729 (8%)
Worked additional hours/overtime to cover the cost of the train fare 487,721 (5%) 179,687 (2%)
Changed jobs to reduce the cost of the train fare 616,068 (6%) 487,721 (7%)
Started to walk/jog/cycle to work 1.30 million (12%) 847,094 (12%)
Joined a work car share scheme 333,704 (3%) 154,017 (2%)

Simon Ranson, continued: “The number of credit cards offering 0% on purchases for 20 months or more increased from just one in November 2014 to 18 a year later(4). This, coupled with the fact that train fares have increased dramatically in recent years, means for many people it makes sense to use their interest free credit cards to buy their season tickets and beat any rise in price, but also spread the cost over a number of months.

“However, if you are planning to take out a new credit card for this purpose, you should also look at the rewards on offer. As interest free periods have increased, many cards have reduced the rewards they offer. Some 18% of cards offered rewards or cashback in November 2014, but a year later two thirds had diluted or scrapped them(4).

“We are one of only three cards that maintained our reward scheme during this period, and in addition to this we offer one of the top three interest free periods on purchases in the marketplace.”

Sainsbury’s Bank’s Purchase Credit Card offers 0% interest on purchases for 28 months and 0% on balance transfers for 18 months(5) and has no annual fee. Customers are also awarded two Nectar points(6) per £1 spent in Sainsbury’s and on Sainsbury’s fuel, and one point for every £5 spent elsewhere.

-Ends-

Notes to Editors

  • Sainsbury’s Bank analysis of Office of Rail and Road Rail Fares Index January 2016 – average change in price for all rail tickets
  • Source: DfT https://www.theyworkforyou.com/wrans/?id=2016-09-08.45695.h
  • Sainsbury’s Bank commissioned Opinium Research to survey 2,000 nationally representative UK adults aged 18+ between 11th November and 15th November 2016. Opinium Research is a member of the British Polling Council and abides by its rules) . Figures have been scaled up using a nationally representative sample (51,339,000).
  • MoneyComms analysis for Sainsburys Bank – conducted on 14th November 2016
  • 0% interest on purchases for 28 months and 0% interest on balance transfers for 18 months. 2.89% balance transfer fee applies for your first 3 months, 3% afterwards (minimum £3 at all times).
  • Nectar points are collected on each full £1 of each separate shopping and fuel transaction at Sainsbury’s. Excludes Sainsbury’s Telecoms and Energy, which will be treated as non-Sainsbury’s purchases. For non-Sainsbury’s purchases 1 Nectar point is earned on each full £5 of each separate transaction. Travel Money purchases are not eligible for points. Nectar points are awarded to you by Sainsbury’s Supermarkets Ltd and Sainsbury’s Bank plc, who reserve the right to alter or terminate the offer at any time. Please allow up to 60 days from your credit card statement date for points to be credited to your Nectar account. The Nectar loyalty programme is operated independently of Sainsbury’s Bank by Aimia Coalition Loyalty UK Ltd, and the collection and use of points is governed by the Nectar Collector Rules, which are set out in the registration pack and are also available at nectar.com.

Representative example

Purchase rate is With a representative With a representative
18.95% p.a. variable 18.9% APR variable £1,200

Sainsbury’s Bank Nectar Credit Cards are available to new Sainsbury’s Bank Credit Card customers only. We treat all our customers and their applications for a Sainsbury’s Bank Nectar Credit Card on an individual basis. The interest rate and credit limit we offer are determined by the details you supply, along with an independent verification of credit and repayment history. To keep your promotional rate you must pay at least the minimum payment by the due date and stay within your credit limit. Nectar points collected using your Credit Card are in addition to the points you collect from swiping your Nectar Card or using it online during a transaction.

For further information, please contact:

Natasha Virtue or Jennifer Johnston-Watt, Sainsbury’s Bank on 0131 286 0010 / bank_communications@sainsburys.co.uk / Citigate Dewe Rogerson 020 7368 9571

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