Sainsbury’s Bank bans self-employed from credit cards and loans
The bank is the first lender to ban self-employed workers from consumer credit products, according to MoneySavingExpert.com.
Sainsbury’s says it has made “temporary updates” to its lending criteria due to the coronavirus crisis and that it will continue to keep the criteria under review.
The rules only apply to new loan and card applications. If you’re self-employed and already have a Sainsbury’s Bank credit card or loan you won’t be affected.
Sainsbury’s Bank currently offers a balance transfer credit card with up to 26 months at 0% interest on balance transfers, and 0% interest on purchases for three months.
Sainsbury’s Dual Offer credit card offers up to 20 months at 0% interest for both balance transfers and purchases.
To apply for both cards, you need to have been a Nectar member for at least six months.
Sainsbury’s Bank is the only bank that has applied a blanket ban on self-employed applicants so far. Other credit card providers and personal loan companies will have their own lending criteria.
Borrowers should carry out an eligibility check before applying for a credit card or loan. This will stop them applying for products they are not eligible for, and damaging their credit score in the process.
A Sainsbury’s Bank spokesperson told MoneySavingExpert.com: “We constantly review the market and consider a number of factors when providing credit cards and loans. We’re sorry for any inconvenience this may cause these customers and we’re keeping this decision under constant review.”
A report by Which? found that furloughed workers are three more times as likely to have a missed a debt repayment during the coronavirus than workers being paid their normal salary.