Review: the Nectar American Express credit card

This is our review of the Nectar American Express credit card.

In January 2021, Avios and Nectar launched a new partnership. You can now 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: American Express Nectar application form

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

The representative APR from year 2 is 37.8% variable.  The representative APR on purchases, and in the first year, is 31.0% 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.

This article was updated on 1st January 2024, and all of the information is correct as of that date. Ignore the original publication date shown.

About the Nectar American Express card

The Nectar American Express credit card is issued directly by American Express.  The Nectar loyalty scheme is used by numerous UK retailers including Sainsbury’s, Argos and eBay.

What is the Nectar Amex sign-up bonus?

The Nectar American Express card 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.

What are the rules for qualifying for the Amex Nectar 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 Amex annual fee?

The American Express Nectar credit card 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 first year and 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, Argos or eBay.

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 the British Airways American Express cards?

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

This means that the £30 Nectar American Express card is more generous than the free British Airways American Express 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 Premium Plus credit 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 £10,000. However, the cards carry a, respectively, £250 and £240 annual fee.

How does the Nectar Amex 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 first £4,000 of annual spend and 0.5% thereafter.

For the first year, when the Nectar American Express credit card is free, the Nectar Amex 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 fee – than using cards such as the John Lewis or Marks & Spencer credit cards.

Is the Nectar Amex a good card to use when travelling?

Not really.  As American Express adds a 3% 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 just £20,000.

Conclusion

For day-to-day spending, the Nectar American Express credit card 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 are starting out with Avios, you may want to get the Nectar American Express first and then progress to the £250 British Airways Premium Plus American Express. By taking this route you would still qualify for the generous Avios bonus on the BAPP 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 will certainly 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.