The-rise-of-supermarket-credit-cards
By Richard Greenwood
As the global credit crisis takes hold around the world consumers are becoming ever more careful about how and where they spend their income. This is one reason leading to Australian supermarkets and retailers making an increasing push into the finance sector to ensure they retain loyalty and a good share of consumer spending. Within Australia consumers have the new Woolworths credit card as well as an existing card from Coles Myer group.

Along with department stores and supermarkets, credit cards in Australia are now issued by online retailers and telecomms companies. Major retailers in Australia have observed that more and more customers are paying for purchases with their cards, which means they have to pay more in merchant servicing fees. Habing their own card cuts transaction costs and allows them to be more cost-efficient.

As a result it is no great shock to see the two largest grocery store groups in Australia launching their own cards.

Woolworths credit card

This combination credit and store card is formally called the Woolworths Everyday Money Credit Card. It is a store card because you get extra discounts and privileges when you use it for purchases during special promotions in Woolworth stores. In addition, it is a regular credit card, issued by HSBC Bank Australia, which means you can use it at any store that accepts MasterCard.

The Woolworths credit card has a couple of real stand out features that set it apart from other store cards.

- Cardholders may use the supermarket's checkout to verify their available credit balance and make payments to their account.

- The credit card features an automatic payment facility (called "epump") for petrol purchases. Pumps at petrol stations have a card reader that picks up signals from a small transmitter built in the card. The transaction is completed automatically, including applicable discounts on the purchase.

Standard interest rate on purchases is 18.99% (starting 1 Feb 2009), with a 55-day interest-free period. Cash advances, however, will attract 21.99% interest, and balances transfers are at 5.99%. An annual fee of $49 is currently waived for the first year you hold the card.

The Woolworths Everyday Money reward program gives 1 point per dollar spent in other stores, 2 points for spending in Woolworths stores, and 3 points for Woolworths Select products.

However, some cardholders may find one policy restrictive. The rewards on offer come in the form of shopping gift vouchers issued every four months and can be spent at retailers within the Woolworths group such as the supermarket or Big W. Also, the vouchers are automatically issued every 4 months with an expiry of 3 months from issue date. Consumers may find that too limiting — and could forget the expiry dates.

Coles Myer Source Card

The Coles Group includes Coles, Target and Kmart stores under its

umbrella. Holders of a Coles Myer Source Card can earn special discounts and offers at these stores as well as spending in any other Mastercard accepting retailer.

One special benefit from this credit card is the chance to save up to 8 cents per litre on your petrol purchases. You get a 4 cent/litre voucher when you spend at least $30 on your card anywhere, plus another 4 cent/litre voucher for minimum $30 spent at certain outlets (Coles, BI-LO, Liquorland). The fuel saver vouchers may be redeemed at Coles Express petrol stations. Note well that the vouchers are valid for only a limited time.

The Coles Myer Source Card (also called Coles Group Source Card) does not charge any annual fee and offer a 62-day interest-free period on purchases. If you have a FlyBuys membership card, you may also earn FlyBuy points on purchases at Coles Group stores.

You can also participate in special promotions with up to 48 months of interest-free purchases on particular items at their stores. You need to make sure you always pay off you bill in full each month before the due date; otherwise all these benefits will be for nought.

The standard interest rate is 20.25%, which is quite high. If you don't meet the required repayments in full then you will shift up to that higher rate and you'll find interest charges quickly add up. You wouldn't want that to happen.

Article Source: http://www.upublish.info

About the Author:
Richard Greenwood
Richard Greenwood runs Aussie credit card website click4credit.com .au which compares reward credit cards including those from supermarkets such as Woolworths in Australia.

Keywords: woolworths credit card, store card, coles myer source card, credit card

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