Iceland launches interest-free loans to help with food bills - but how does it work and are you eligible?
In the midst of the cost of living crisis, Iceland is helping shoppers with their new interest-free loan scheme. Here’s what you need to know and how it works
Iceland has launched a new interest-free loan scheme called Food Club card to help shoppers struggling with rising food prices.
This comes at a time where families are increasingly looking for ways to save money on food as the rise in inflation takes it's toll.
Richard Walker, managing director of Iceland Foods, said: “More than ever, people are struggling to purchase much-needed everyday items during this relentless cost of living crisis, and fresh thinking is required by business and government to find workable solutions.
“To those striving to worry less about how they will afford essential goods, this ethical credit scheme delivers real help when most needed and I believe it will make a valuable contribution to breaking the cycle of food poverty in this country.”
The scheme has been launched with charity Fair For You. Chief Executive of Fair for You, Simon Dukes said: "Nobody should have to go hungry in order to feed their kids, or be forced into making impossible decisions between putting food on the table or having hot water. Our mission at Fair for You is to provide affordable credit to those who need it, to ensure they are not ripped off by exploitative lenders.”
The scheme was trialled regionally before being rolled out nationally. The pilot scheme carried out with over 5,000 customers revealed:
- 95% of participants found the scheme helpful
- Approximately 92% of participants said the scheme either helped them reduce or stop their use of food banks
- 71% of participants said that with the scheme in place, they are less likely to pay bills, such as rent and council tax, late.
How does the Iceland loans scheme work?
The interest-free loans, which will be available to take out across all Iceland UK branches, means customers can take out small loans between £25 to £100 to cover their shopping bill. With the 0% interest, you can pay this back with no added interest fee.
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Shoppers will need to have a Food Club Card in order to be able to benefit from the scheme. If approved, your loan is applied to your card, which you then use for your shopping. You then repay the loan. Your repayments are set to £10 a week. For example, if you spend £60 on a shop, you pay £10 a week for 6 weeks to repay the debt.
You can decide which day of the week this comes out.
Am i eligible for a Food Club Card and how do I get one?
Before applying to the Food Club card, note that Fair For You carries out credit searches on applications but don’t worry, your outcome doesn't leave any mark on your credit score.
Fair For You’s eligibility criteria is based on whether you have a steady and regular income. This can be in the form of an income or benefits. You'll also need to have a bank account that you can use to make the repayments. Check if you meet their requirements on the eligibility checker.
Application is easy:
- Go onto the Fair For You website and apply for an initial top up. This will be between £25 to £75.
- Keep an eye on your emails, as this is where you will be told if your application has been successful. Response time tends to be about an hour during store opening times.
- Once you’ve been approved, wait 5 to 7 business days to receive your Food Club card. This will arrive topped up and ready to use.
Adam French, Personal Finance Editor at The Money Edit said: “We’ve already found Iceland’s bonus card to be amongst the best loyalty schemes for helping shoppers budget, and it should now be applauded for taking an innovative step in supporting those feeling the squeeze the most.
“Other supermarkets need to step up to the plate and provide similar support for customers through the cost of living crisis.”
Other ways to cut costs at the supermarket
If you're looking to make some savings while doing your weekly shop, there are simple tips you can try.
Swapping to the cheapest supermarket is a great starting point. You should also make sure to take any supermarket loyalty cards with you when you go shopping - not only can thing bag you some exclusive pricing, depending on the retailer, but you could also earn points that can be traded for money off vouchers.
You could also try buying a brand level lower than you normally do - in many cases, you won't be able to tell the difference, but your bank balance will thank you.
Shopping later in the day can also be a great way of bagging some bargains.
You can also see if you can get any discounts through the Help for Households scheme which recently launched to help shoppers during the cost of living crisis.
Vaishali is a journalism graduate who has experience working with the likes of Leicester Mercury, Inews and The Week. She also comes from a marketing background, where she has done copywriting and content creation for businesses. Currently, writing about all things personal finance, Vaishali is passionate about finding the best deals around, whether it's the best credit cards or the cheapest personal loans, as well as sharing top money hacks to help people save and better manage their money.
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