Tesco Clubcard Credit Card – The Good, the Bad and the Ugly…

The Tesco MasterCard Isn’t the Best, But Why?

With the ability to convert Clubcard points to Avios points, we thought we’d take a look at the Tesco Clubcard credit card and see how the benefits compare to some of the other Avios-earning credit cards available.  I’ve always been a fan of converting Clubcard points to Avios however have never held a Tesco credit card.  Let’s take a look at why this may be the case…

There are actually 4 different Tesco Clubcard MasterCards offered by Tesco Bank.  In this review we’ll be focusing on the ‘Purchases’ version of the card.  Let’s start with the boring bits.  The Tescos credit card is issued directly by Tesco Bank and this version of the card comes with a 19.9% APR.

Note that there is a version which offers 5.9% APR which if you are planning on using the card to borrow money would be preferable to the ‘Purchases’ card.

There is no annual fee for the Tesco Clubcard credit card.

Tesco Clubcard MasterCard Sign-Up Bonus

Unfortunately there is no sign-up bonus offered by any of the Tesco Bank credit cards.  Even the Tesco Premium credit card which came with a whopping annual fee of £150 pa, didn’t offer a sign-up bonus.

Tesco MasterCard – Other Benefits

The key benefit of the Tesco Clubcard MasterCard is the ability to earn Clubcard points on your day-to-day spending.  You’ll earn 1 Clubcard point for every £8 spent on the card.  Note that points are only granted in multiples of £8 and as such if you only spend £7.99 on the credit card you’ll receive no points for this transaction.  Similarly if you spend £15.50 on the card you’ll only receive 1 point but if the spend is £16.00 then you’ll receive 2 points.  As such this may not be a great card for small day-to-day items.

One other key benefit of the Purchases version of the Tesco MasterCard credit card is 0% interest on all purchases for the first 26 months.  This is extremely generous and could represent a considerable saving compared with a high-interest rewards credit card.  As always we would strongly recommend avoiding using credit cards as a form of long-term borrowing.

Tesco Bank Credit Cards – Anything Else I Should Know?

Any transactions in Tesco stores will earn double points.  Don’t forget to also combine the credit card with your Clubcard (this can actually be your Tesco credit card because it doubles as a standard Clubcard) to earn a further 1 point for every £1 spent in store.

Tesco Credit Card Points – How to Spend?

Tesco credit card Clubcard points can be redeemed in numerous ways including Avios and Virgin Flying Club miles.

1 Clubcard point can be transferred to 2.4 Avios points or 2.5 Virgin Flying Club miles.  With £8 spent on the Tesco Clubcard credit card earning 1 Clubcard point, you’d be earning 0.3 Avios or 0.31 Virgin miles for every £1 spent on the card.

Whilst this is a reasonable rate for a MasterCard, it is poor in comparison to the likes of the (free for the first year) American Express Gold card which earns 1 Avios / Virgin mile for every £1 spent.  This card also comes with a sign-up bonus of 10,000 points when you spend £3,000 on the card in the first 3 months as well as 2 free airport lounge passes.  These benefits make it the most generous rewards credit card currently available in the UK market.  You can increase the sign-up bonus to 12,000 points by using this referral link.

We value both Avios and Virgin Flying Club miles at roughly 1p per point and as such you’d be receiving 2.5 times face value of the Clubcard vouchers.  I would highlight that there are other alternative redemption opportunities which would generate 3 times face value.  These would include vouchers for everything from Hilton Hotels to Pizza Express.  A full list can be found on the Tesco website here.

FAQs – Tesco Credit Cards

Can I use my Tesco Clubcard credit card abroad?

Yes you can use the Tesco MasterCard abroad however all foreign transactions come with a 3% fee.  As such you’d be far better off getting an additional card with 0% foreign exchange fees.  I’ve recently reviewed the Revolut card and would recommend it for spending abroad.

Is there a Tesco Premium credit card?

Whilst there are a number of Tesco credit cards currently available, they took the decision to discontinue the Tesco Premium credit card in June 2018.  The card came with an annual fee of £150 but did offer an improved earning rate of 1 Clubcard point for every £4 spent, a 5,000 Clubcard point bonus when you spent £5,000 on the card and comprehensive family travel insurance.

Besides the ‘Purchases’ card what other Tesco Clubcard credit cards are there?

Whilst each of the Tesco credit cards comes with various T&Cs (found here) the headline details of the alternative cards are as follows:

Summary – Tesco’s Credit Card

So what have we learned about the Tesco Clubcard credit card?  The Tesco MasterCard offers the ability to earn 1 Clubcard point for every £8 spent on the card, which if redeemed for vouchers could be the equivalent of receiving 0.38% cashback or 0.76% if used in a Tesco store.

Whilst this is reasonable for a MasterCard there are alternative cards, such as the American Express Cashback card (reviewed here) which offers 1% on all spend.  The £25 annual fee can be offset by using this link and scrolling down to the Cashback version of the card.

If you’re looking to earn either Avios or Virgin Flying Club miles then you’d be better off with the likes of the American Express Gold card which offers 1 point for every £1 spent and a sign-up bonus of 10,000 points (12,000 if you use this link).

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