Sainsbury's Finance, a joint venture of Lloyds Banking Group and the grocery chain J Sainsbury PLC, has launched two credit cards in the U.K.

The Sainsbury's Nectar card offers a 12.9% annual percentage rate on purchases and balance transfers, the issuer said earlier this month.

Additionally, holders of the MasterCard-branded card earn double Nectar points when shopping in Sainsbury stores, online and at the chain's petrol stations for two years after opening the account, Sainsbury's Finance said.

The extra Nectar points are equivalent to an additional 1% off cardholders' Sainsbury's shopping bills. For non-Sainsbury purchases, one Nectar point is earned on each $8 of each separate transaction.

The other new Sainsbury's card offers a 0% annual percentage rate for the first 12 months, after which it rises to 15.9% or less on purchases and balance transfers.

The Sainsbury's credit card is only one of two credit cards offering an interest-free period on purchases and balance transfers, Sainsbury's Finance concluded after a March 2010 market analysis.

Neither credit card has an annual fee.

To apply for both Sainsbury cards, consumers need to already have a Nectar card, a generic, loyalty-based credit product that enables cardholders to earn points and receive discounts from various retailers, including Sainsbury's and Amazon.com.

The Sainsbury's Nectar card replaces the regular Nectar card, which is being discontinued.

Sainsbury said it launched the two cards because of rising U.K. credit card interest rates.

The average interest rate for credit card purchases in the U.K. is 18.2%, up from 16.3% in 2008, according to the U.K. Payments Council, whose research also found that 6% of credit cards come with an interest rate of 12.9% or less on purchases, while 32% offer an interest rate of 15.9%.

Sainsbury's Finance estimates about 3.18 million consumers, or 7% of the U.K. adult population, are considering taking out a new credit card this year.

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