False Economies: UK adults reveal the financial decisions they regret 

False Economies: UK adults reveal the financial decisions they regret 

15 March 2019

Sainsbury's Bank Credit Cards reveals the smart financial hacks to spring clean your finances

UK adults are being urged to spring clean their finances by using smart financial hacks the next time they buy a big ticket item or service.  

A new study by Sainsbury’s Bank Credit Cards(1)  found nearly a third (32%) of UK adults have bought a lower quality item and then regretted not paying more for a product that would last longer. With two thirds (67%)(1) of people planning to buy a big ticket item in the near future, Sainsbury’s Bank Credit Cards reveals the UK’s ‘False Economies’ - the most common ways shoppers are unintentionally spending more money when trying to save on big purchases.

Make do and mend?

UK adults admit they have often paid for costly repairs to fix old or broken items, spending more money in the long run than if they bought a new item upfront. Nearly one in 10 (9%) people have attempted a DIY project but were unsuccessful and had to pay a tradesperson to finish the job.  As a result people on average typically pay for fixing expensive items such as cars and boilers twice, before buying again(1).

Repairs can end up being costly, with an average patch-up job for a car standing at £214 and £150 for a boiler(1). More than a third (37%) of people regretted fixing an item as 44% thought it would be cheaper to fix than buy a new one(1).

Jerome Fernandez, Head of Credit Cards at Sainsbury’s Bank, said: “If you are considering significant outlays this year on items that need fixing, it is worthwhile weighing up the initial cost vs any ongoing costs. You could save more money in the long run by investing in a new item upfront.

“A 0% credit card, can enable you to pay an item up without having to find the initial lump sum, just make sure you clear the spend before the offer ends.”

Paying for significant purchases

In a separate study where the Bank asked its customers(2) for their view, 53% said they choose to use  credit cards for big purchases. One in three (62%) also revealed that they would consider a new credit card deal that offers a 0% interest period for purchases.  

The data also identified that 30% of people are on the hunt for a new credit card in the next 12 months, either with a 0% purchase or balance transfer deal. More than half (54%) of 35-44 year olds are looking for a new credit card deal in 2019. The most popular reason for this age group to use credit cards is to purchase items such as cars,  furniture or white goods and therefore will want to take advantage of longer 0% deals(2).

Customers making larger purchases need to make sure they have worked out the monthly repayments to make sure they can afford the regular outgoings, and remain disciplined to ensure they pay off the item within the offer period. If they decide to purchase a car they need to make sure that the car dealership they plan to buy from accepts credit cards.

For those savvy shoppers that are looking to get the most from their next purchase, the Sainsbury’s Bank Dual Offer Credit Card(3) offers 0% interest on balance transfers and purchases for up to 28 months, as well as the opportunity to earn up to 7,500 bonus Nectar points.  Get 750 points by spending £35 or more on Sainsbury’s shopping using this card, up to 10 times in the first two months(4).

Also, you can collect Nectar points wherever you shop. You can earn two Nectar points for every £1 you spend on Sainsbury’s shopping and fuel, and one Nectar point for every £5 spent elsewhere(5)

Financial expert and editor and founder of Moneymagpie.com, Jasmine Birtles, commented: “We all do it. We think we’re getting a bargain or being a bit clever with our purchase and then we find that we've bought something that was too cheap and it broke.  We can’t get it right all the time but if we’re able to take a breath, step back for long enough to think it through (often learning from former mistakes) we can usually work out if it could be better value in the long-run to buy something new.

“If you do end up buying new, usually the cheapest way to do that is with a credit card that offers 0% on purchases as long as you’re absolutely sure you can pay the item up within the offer period."  

 

Jasmine Birtles reveals her top financial hacks:

  • Think about future purchases: Make a list of what big items you may need to buy this year. Are you planning to go on holiday? Do you suspect that your boiler will need to be replaced? Having a future plan for big purchases can help you map out your year’s finances.
  • Save money elsewhere: If you’re looking to make a big purchase in one area, can you cut down on costs elsewhere? For example a gym membership could be replaced by joining a free fitness boot camp in your local park.
  • Shop around: If you’re planning to spend money on a large purchase, spend a bit of time shopping around so you can get the best deal for your money.
  • Factor in the cost of insurance. If you’re going on holiday, don’t forget travel insurance. It doesn’t have to cost a lot but will add to the total price you pay. A new car should come with a warranty but you still have to pay for vehicle insurance and the sportier the model, the more you’re likely to have to add on!
  • De-junk your life to bring in the cash. Do you have other items you could sell to bring in the money to pay for this new item? Bring the whole family into it – the kids could sell toys they no longer want and put that towards spending money for the holiday, for example.

For people who are looking to apply for a new credit card, Sainsbury’s Bank offers a helpful guide. Find out more here https://www.sainsburysbank.co.uk/credit_cards/how-to-apply-for-a-credit-card

 

ENDS

For further information, please contact:

Sainsbury’s Bank press office 0131 286 0010 / [email protected]

Notes to editor:

This press release is information for journalists only and is not intended to be a promotion to be acted upon by consumers.

 

Rates and information correct at date of issue.

Representative example

Purchase rate is

With a representative

Assumed Credit limit:

20.95%
p.a. variable

20.9% APR
variable

£1,200

Your interest rate, credit limit and promotional period will vary depending on your individual circumstances.

(1) Sainsbury’s Bank commissioned Opinium Research to survey 2,018 nationally representative UK adults aged 18+ between 18 and 21 January 2019. Opinium Research is a member of the British Polling Council and abides by its rules.

(2) The Sainsbury’s Bank Customer Panel is made up of 2,956 respondents and is managed by mar/u. The data was generated on 5 February 2019.  

(3) 0% interest on balance transfers and purchases for up to 28 months. We may offer you a 0% interest period of 25 or 22 months depending on your individual circumstances.  To keep your promotional rate you must pay at least the minimum payment by the due date and stay within your credit limit.

(4) Earn 750 bonus points each time you spend £35 or more on Sainsbury’s shopping with our credit card, up to ten times in your first 2 months, that’s 7,500 points. Offer is available to new Sainsbury's Bank credit card customers. Remember to add your Nectar card number to your application. To get your points you'll need to stay within your credit limit and make the minimum payment on your account by the due date. Spend with Argos, Habitat, Sainsbury’s Energy, Sainsbury’s Bank (including travel money) Sainsbury's Petrol Stations (including non-fuel purchases) and any refunded transactions are excluded. Your account will be opened within 2 working days of us receiving your signed agreement and we will allow 10 days for you to receive your card before the 2 months begins. Your points will appear in your Nectar account 60 days after the end of your 2 month period. Sainsbury’s Supermarkets Ltd award the points from this offer. Sainsbury's Bank reserves the right to alter or stop this offer without notice. 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.

(5) You'll pick up 2 Nectar points for every £1 you spend on Sainsbury's shopping and fuel, and 1 Nectar point for every £5 you spend elsewhere. 2 Nectar points are collected on each full £1 of each separate shopping or fuel transaction at Sainsbury’s when you use your Sainsbury’s Bank Credit Card. Excludes Argos, Habitat, Sainsbury’s Bank, Sainsbury’s Energy and any other Sainsbury’s service which will be treated as non-Sainsbury’s purchases. For non-Sainsbury’s purchases, 1 Nectar point is collected 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 the points to be credited to your Nectar account. Sainsbury's Bank reserves the right to alter or stop this offer without notice.

About Sainsbury’s Bank:

                     

To view our latest press releases and product information, please visit the Sainsbury’s Bank online media centre at https://www.about.sainsburys.co.uk/news

 

Sainsbury's was the first major supermarket to open a bank in the UK in February 1997.  Our range of financial products includes mortgages, credit cards, savings and loans, as well as travel money, and car, home, pet, travel and life insurance which we provide online and by telephone.  We offer Sainsbury’s shoppers great deals and rewards for choosing to shop and bank with us.

 

We have travel money bureaux at various Sainsbury's supermarkets across the UK and a large ATM estate.

 

Sainsbury's Bank plc. Registered Office, 33 Holborn, London EC1N 2HT (registered in England and Wales, no 3279730) is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (register no. 184514). Sainsbury's Bank plc is covered by the Financial Services Compensation Scheme (FSCS).