This review was updated on 14th May 2016 and all the information is correct as of that date
This is my review of the Tesco Clubcard MasterCard credit card.
It is part of my series of articles looking at the major UK loyalty credit cards and discussing whether or not they are worth applying for. These articles will be linked to the relevant sections of the ‘Credit Cards Update‘ page. My other UK airline and hotel credit card reviews can be found here.
If you want to check your credit record before applying for a new card, click here for a free 30-day trial of Equifax’s online credit report service. Note that a monthly fee of £14.95 will be charged if you do not cancel during the 30-day free trial period.
Key facts: No annual fee
The representative APR is 18.9% variable
About the card
The Tesco Clubcard MasterCard is issued by Tesco Bank, which is now wholly owned by Tesco following its acquisition of Royal Bank of Scotland’s stake a couple of years ago.
What is the sign-up bonus?
Any other benefits?
What do I earn per £1 spent on the card?
You earn 1 Clubcard point for every £8 spent on the card on a ‘per transaction’ basis.
Transaction in Tesco stores will earn double points.
It is important that potential applicants understand what this means. At the most extreme, if you bought 100 items at £7.99 in separate transactions, you would earn zero Clubcard points. A £15.99 transaction would only earn one point, whilst a £16.00 transaction would earn two points.
One Clubcard point is worth 2.4 Avios or 2.5 Virgin Flying Club miles, so every £1 spent on the card gets you up to 0.3 Avios or 0.312 Virgin miles.
You will receive a statement once a quarter containing your Clubcard vouchers, and you can convert these online to Avios or Virgin or redeem them for any of Tesco’s other ‘Clubcard Boost’ deals. You can even spend the vouchers in-store at Tesco at their face value, although this is a poor use of them.
Tesco used to run fairly regular transfer bonuses with Avios. After a three year gap these restarted in Autumn 2015, although the bonus was restricted to 20% and limited to £100 of converted vouchers per account.
On the face of it, this is the most generous free Visa or MasterCard card available for earning Avios. 0.3 Avios per £1 is better than you get from the cheaper Lloyds Avios Rewards cards. However, my enthusiasm for the Tesco card has dropped since it halved its earning rate:
the ’rounding down to the nearest £8′ rule will have a MAJOR impact on the points you earn. Unless you only use the card for major (£100+) purchases, you will find that your average earning rate per £1 spent is far lower than the advertised 0.125 Clubcard points / 0.3 Avios.
if you get the £24 Lloyds Avios Rewards card (0.25 Avios per £1 on the MasterCard – which may be more than you get in reality from the Tesco card after rounding down), your spend will also count towards the flight upgrade voucher issued at £7,000 of spending.
The major virtues of the Tesco Clubcard MasterCard are:
it is free, whilst the Lloyds Avios Rewards card costs £24 per year
you don’t have to deal with Lloyds!
if there is now going to be a return to regular ‘Clubcard to Avios’ transfer bonuses, your earnings rate will be better than you think
you can use your Clubcard points for something else if you change your mind about taking Avios
If you meet the stringent wealth criteria for getting the card, remember that the HSBC Premier MasterCard offers an unbeatable 0.5 Avios per £1 – and the card is free. I compare the various alternatives to the Tesco Clubcard MasterCard in detail in this article.
Any other quirks?
Yes. Your credit card doubles up as a standard Tesco Clubcard.
It is perfectly acceptable to hand over your Tesco credit card in a Tesco store and ask them to swipe it as a Clubcard. You can then pay for your shopping on a more lucrative credit card!
What is an Avios point worth?
This post outlines my view of what an Avios point is worth, based on your typical redemption patterns.
One key benefit of Tesco Clubcard points is that you do not have to convert to Avios. Unlike dedicated airline credit cards, you have the option to convert to Avios or Virgin miles, but there is also the flexibility to use them for any other good Tesco deals that come along. I use a large pile of vouchers to pay a regular Safestore bill ….
How does this compare to a cashback credit card?
The best cashback card on the market which offers a) a MasterCard or Visa, b) no annual fee and c) unlimited cashback is the Asda Money card, which pays 0.5%.
Whilst the Tesco Clubcard MasterCard is the most generous free Visa or MasterCard option for earning Avios for most people, you should still consider whether a non loyalty card would be a better deal.
Remember that the Tesco card has an FX fee of almost 3% for foreign currency transactions. You may want to consider getting a separate card to use abroad which charges no foreign exchange fees. I recommend the Lloyds Avios Rewards card which also earns Avios points – even on your 0% FX transactions! It comes with a 4,500 Avios sign-up bonus if I refer you. My review of the Lloyds Avios Rewards card is here.
Other points to note
There are a number of variants of the card available, offering different combinations of interest rate, balance transfer rate and 0% interest rate periods. These are outlined on the Tesco Bank site. If you always clear your bill at the end of the month, it is immaterial which version you choose.
This is not a sexy credit card, and the girls (or guys) are unlikely to be impressed when you pull it out in a bar or restaurant!
Assuming you convert your Clubcard vouchers to Avios points, the earning rate of 0.3 Avios points per £1 is not great. It may be better than the alternative Avios Visa and MasterCard options but that is not saying much.
If Tesco continues to run conversion bonus to Avios then this rate will look better. Conversion bonuses to Virgin Flying Club from Tesco are more common so you may rate the card higher if you collect Virgin miles. If not, you may want to look at cashback MasterCard or Visa cards instead.
The application form for the Tesco Clubcard MasterCard can be found here.
Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history. By recommending credit cards on this site, I am – technically – acting as a credit broker. Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.