Should you ditch the Tesco Clubcard Mastercard for the IHG Rewards Club Premium Visa?

The devaluation of the Tesco Clubcard Mastercard takes place this month.  Today I want to consider whether you should ditch the card for the IHG Rewards Club Premium Visa, especially whilst the latter has a special sign-up bonus until the end of the month?

To an outsider, neither of these cards is an obvious choice for an Avios collector.  However, both of these cards have reward currencies that convert into Avios points.  Clubcard is 1 : 2.4 whilst IHG Rewards Club points are 5 : 1.

Let’s summarise what you are now getting from your Tesco Clubcard Mastercard.  The representative APR is 18.9% variable.

No annual fee

1 Clubcard point for every £8 you spend.  This means 0.125 Clubcard points per £1, which converts to 0.3 Avios per £1.

But …. you only earn points on multiple of £8 spent per transaction.  Buy something for £7.99 and you earn nothing.  Buy something for £15.99 and you only earn 1 Clubcard points.  If you bought your £5 lunch on your Clubcard Mastercard each day, you would spend £200 over a month but get nothing back.  Your effective Avios earning rate will be lower than 0.3 Avios per £1.

You get flexibility to use your points for other things if you don’t want Avios.  As well as Virgin Flying Club miles there are many other redemption options via Clubcard Boost.  I tend to use my Clubcard vouchers to pay Safestore bills and just bought a pile of Lego for Christmas, getting double the face value of my points.

Now let’s compare this to the IHG Rewards Club Premium Visa.  I am legally obliged to tell you that the representative APR is 42.2% variable including fee based on a notional £1200 credit limit.

£99 annual fee.  That is not a good start, although in the first year this is offset by the sign-up bonus.  You get 40,000 IHG Rewards Club points (worth 8,000 Avios if converted) if you apply before 31st December – and there is no spending target to trigger the bonus.  That said, you get better value using the points for Holiday Inn, InterContinental, Crowne Plaza etc hotel stays.

2 IHG Rewards Club points for every £1 you spend.  These converts to Avios at 5:1 although you can only convert in chunks of 10,000 points.  You would be getting 0.4 Avios per £1.

You earn 0.4 Avios per £1 on ALL of your spending – there is no ’rounding down per transaction’ nonsense as with the Tesco card.

You receive Platinum status (mid tier) in IHG Rewards Club for as long as you hold the card.  This has some benefits on stays at IHG brands.

If you spend £10,000 on the card in a card year, you receive a voucher for a free night at ANY IHG hotel.  If you use this at, say, the InterContinental Times Square in New York you’d be getting at least £250 of value.  This easily offsets your £99 annual fee.

As you can see, there are reasons why you may be better off swapping your Tesco Clubcard Mastercard for the IHG Rewards Club Premium Visa especially if you would spend the £10,000 required to trigger the free night voucher.

One word of warning though.  The Tesco card has already devalued in response to the new EU credit card rules.  We do not know if the IHG Rewards Club Premium Visa card will also cut its earning rate soon or not – although as you are paying £99 for the card it may be able to keep paying out two points per £1.

Note that you cannot get the IHG card if you have any other card issued by Barclaycard.  This includes the Hilton HHonors Visa.

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Want to earn more points from credit cards? – April 2024 update

If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these offers:

SPECIAL OFFER: Until 12th May 2024, the Capital on Tap Business Rewards Visa card is offering a bonus of 30,000 points, convertible into 30,000 Avios. You must have a Limited Company to apply. Click here to learn more and click here to apply.

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending.