Tesco current account to launch TODAY – what we know about Avios earning ….

Love Clubcard, don’t collect Avios?  You should be reading our sister site, Shopper Points (www.shopperpoints.co.uk), which covers the latest Clubcard and Nectar offers without any distracting frequent flyer talk!  Why not check it out now?

Tesco Bank is due to launch its current account today.

We don’t know everything about the account yet.  In particular, we don’t know what incentives there will be for signing up.

Marks & Spencer is currently offering a £100 voucher for opening a current account with them.  If Tesco offered the equivalent of 10,000 Clubcard points then it would look very interesting …..!  However, my understanding is that there will be no major offer at launch.

Tesco current account

This is what we know:

The account will be free if you pay in £750 per month ….

…. and will cost £5 per month if you don’t.

You will earn 3% interest on balances up to £3,000 and nothing above that

You will earn Clubcard points on all of your debit card transactions:

1 point per £4 spent in Tesco (forget that!)

1 point per £8 spent elsewhere (VERY interesting!)

Is there going to be ‘small print’ attached to the ‘1 point per £8 spent elsewhere’ rule?

(EDIT: Yes there is small print, now the Tesco website is live.  Paying off ‘banks or other financial institutions’ will not earn Clubcard points.  This substantially weakens the offer.)

Love Clubcard, don’t collect Avios?  You should be reading our sister site, Shopper Points (www.shopperpoints.co.uk), which covers the latest Clubcard and Nectar offers without any distracting frequent flyer talk!  Why not check it out now?

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Comments

  1. Camille says:

    In one respect, we should actually be thanking Tesco! Why?- because they have taken the step to offer a direct mileage earning opportunity for debit card use (which AFAIK has not been possible upto now).

    I agree their offering is not great, but if their account is successful, then hopefully it might encourage others to compete with better offerings of their own, eg. Virgin Money (potential tie-up for VS miles), Lloyds or TSB (Avios), etc,. Wait and watch…

    • Hopefully. Although the biggest benefit of the Lloyds Duo card was seen to be the pressure it would exert on other card issuers to provide cards that offer zero FX fees and earn avios at the same time… and I’ve not seen any other cards looking to compete yet.

      0.3 Avios per £1 spent is not a great return really. Most people here will put any expenditure that would qualify for the CC points across a credit card that pays a lot more. The sorts of payments we make out of our current accounts (direct debits, paying off credit card bills, mortgage payments, transfers to other banks) do not qualify for clubcard points. With the exception of aldi and lidl, I cannot think of anywhere where I use debit card. If somewhere does not take Amex, I use my tesco CC card which is a lot better than their current account reward.

      • Inland Revenue is a potential one although only a minority of us pay our own tax. Council Tax is another although my lot let me use a credit card with no surcharge ….

        • Camille says:

          Agree with Nick, this is a hope….so lets see who, if anyone responds. However, at least the principle of miles for debit card use is established, so a step in the ‘right’ direction.

          Raffles, both councils where I pay CT charge a surcharge (1.5% and in Ealing, a whopping 2.5%!!). I can justify using the ex-bmi DC master card at 2.5/£1 for the lower fee, but not the 2.5%….so eyes, CT is one potential use.

          But also those utilities that charge a fee, e.g. BT, Southern Electric, Orange/EE, etc who each charge a lot more than the 50p Sky levy. Another possible use – Ryanair, Easyet, etc so (in)direct way to earn miles for flying LCCs!

          • My council allow paypoint so I make a monthly pilgrimige to the CO OP and whack it on the Amex Gold card. Counts as a supermarket so I get double points for it.

    • James67 says:

      IIRC Lloyds at one time had an avios current account or at least you got some for opening one. When Virgin opens a current account we might see some flying club miles come our way.

  2. squills says:

    OK DDs are no good but what if you advance pay for a bill through your debit card? Eg mortgage, gas & elec, water, TV, council tax etc? These companies/ instis are perfectly happy to take advance payment on a debit card and will simply (on request) adjust the DD downwards.

    Needs testing.

    • squills says:

      OK mortgage might be out, but definition of financial insti would no appear to include most of the others…

      Question:What’s not included in the Clubcard Reward scheme?

      Answer:You won’t collect Clubcard points on cash withdrawals and deposits, buying travel money (cash or travellers cheques) or using your card at other banks and building societies.

  3. Oh well – at least I’ve learnt something today. Seems this hangs on whether you get points for paying off council tax or tax bills…

  4. squills says:

    If they’re serious about getting the first 1 million customers, there’s a 5000 point incentive for signing up around the corner. Hold fire until we see it.

    Reads:
    Tesco Bank plans to add to the 6 million customers who already use its credit cards, mortgages and motor and pet insurance products but has rejected a conventional branch approach by offering an online-only account. It is expected to create 600 jobs over two years.
    Britain’s biggest retailer hopes its digital approach and clearer pricing will encourage more of its 16 million Clubcard holders to take up the account and persuade customers to switch from other banks.
    It is hard to have a price war when you don’t know what the price is
    Shoppers spending on Tesco’s debit card at its own stores and elsewhere will generate Clubcard points.
    The new account will pay an interest rate of 3 per cent but there will be a charge of £5 a month unless holders pay in at least £750 monthly.
    Benny Higgins, chief executive of Tesco Bank, declined to reveal a profit target for the account but he hoped it would break even in the next few years, adding that Tesco Bank as a whole has been in profit for several years.
    He condemned the “smoke and mirrors” tactics used by other banks in their fees.
    When asked whether Tesco would try to win customers by slashing prices, he said: “People cannot see clearly what they pay and what they get. It is hard to have a price war when you don’t know what the price is.”
    If Tesco’s current account matched the success of its credit card it would rank alongside Royal Bank of Scotland, Barclays, Lloyds and HSBC with its First Direct brand.
    Account holders will be able to use 4,000 ATMs throughout the UK to manage their cash – an increase of 30 per cent since 2008 – as well as a new app being launched for Android and IOS devices enabling customers to manage payments, view balances and shift money between accounts, which plays into the nine out of 10 Tesco customers who buy its products online.
    Tesco launched its banking services in 1997 in a joint venture with Royal Bank of Scotland but took sole ownership of the enterprise in 2008.

  5. As far as I am aware you will earn points for CT, HMRC and also NS&I, as they are under a MCC (merchant Category code) of govenment, not financial institutions.

  6. Let us know how you get on…