6,000 Avios and £60 cashback on the £150 Tesco Premium Credit Card – worth it?

Back in June, Tesco launched the Tesco Premium Credit Card.

You can check out the details here.  The representative APR is 56.5% variable, including the fee, assuming a £1200 credit limit.

Tesco Premium credit card

I was, for want of a better word, ambivalent about the card when it launched.  You were looking at a £150 annual fee for benefits which I felt, personally, were worthless.

Some readers disagreed with me.   I expected this – I did write originally that “Tesco has created a product which could work really well for some people but not for others.”

The ground has now moved a little:

Until 2nd January, Tesco Bank is offering 2,500 Clubcard points (6,000 Avio or 6,250 Virgin Flying Club miles) for signing up and making one purchase

Via this link, you will receive £60 cashback on top

The closure of the bmi Diamond Club MasterCard has left a lot of people without a decent Visa or MasterCard product for earning Avios

You are paying a net £90 (£150 less £60 cashback) to receive 6,000 Avios plus the other card benefits.  As I wouldn’t pay £90 for 6,000 Avios, you really need to look at these other benefits to decide if the card is worth it.

Let’s go through them one by one:

Benefit:  1 Clubcard point for every £1 you spend on the card in Tesco or at Tesco Direct – plus a 5,000 point bonus if you spend £5,000 with Tesco during your card year

This card would pay you 2.4 Avios points or 2.5 Virgin Flying Club on every £1 you spend at Tesco.  This is a very decent return if you spend a lot of money with them, even if you don’t spend £5,000 per year.

Let’s imagine that you DO spend £5,000 per year in Tesco.  This may be possible if you always buy your fuel there or shop for a large family.

On that basis, you would earn 8,750 more Clubcard points per year using the Premium Credit Card than you would with the free Tesco Clubcard credit card which gives 1 point for every £4 you spend in Tesco and has no bonus.

I can recommend this card if you easily spend £5,000 per year in Tesco purely because of these 8,750 Clubcard points.  That would get you 21,000 Avios or 21,875 Virgin Flying Club miles which justifies the fee.

Benefit:  Comprehensive travel insurance for you and your family

This covers immediate family members under the age of 70 and includes 17 days of Winter Sports cover.  Some HFP readers have commented that the rules on pre-existing conditions appear strict but I am not an expert on this.

If you currently pay for travel insurance then this would have some value.  If you have it via another source – mine comes from American Express Platinum – then you won’t.

Depending on your age and whether you do ‘winter sports’, a bargain basement family policy will cost between £50 and £70.  If you are not leaving Europe, you will pay less.  That said, the moneysavingexpert.com ‘top pick’ (based on generosity of terms and payout history) is from LV and costs around £200 for global cover and just over £100 for European cover.

You need to decide what value, if any, you place on this benefit.

Benefit:  £50 off a British Airways Club Europe booking for up to nine people departing from London

This is a benefit which someone probably thought was a good idea but has been messed up in its execution.

If you never pay for Club Europe then it clearly has no value.  That said, on a route like Paris or Amsterdam the premium over Euro Traveller would drop to around £50 with the discount so perhaps you would do it.

If you book Club Europe for cash on a regular basis for your family then it clearly has real value.

However … this is a one-off benefit.  More importantly, the discount code is only valid for 2 months.  If you think that you WOULD take advantage of this benefit, it actually makes sense NOT to apply now but to wait until you are approaching a point where you will be booking.

Tesco guarantees that you will have your code within 10 days of your application being accepted.  This is positive and means that, if you are planning to book Club Europe flights for cash, you could delay booking for 10 days until you have applied for the card and received your code.

Note that this benefit is being withdrawn on 31st December 2016 and you must apply for the card before this date to receive it.

Benefits:  1% enhanced exchange rate when you buy travel money in a Tesco store using your card

I would value this at nothing, as I believe that I would still get a better deal using my 0% FX fee Post Office credit card or my 1% fee Curve Card for purchases abroad.  To get a small amount of cash, using an ATM using a normal debit card with a 3% fee is still likely to be a better deal.

Whilst currency purchases made using the card at Tesco Travel Money are treated as purchases and not cash advances, they do NOT earn Clubcard points.

Benefits:  1 Clubcard point for every £4 you spend on the card outside Tesco

The current MasterCard and Visa offers on travel credit cards are weak which enhances this offer.  Converted to Avios, you would be getting 0.6 Avios per £1 based on 0.25 Clubcard points.  With the demise of the bmi Diamond Club credit cards, which paid up to 2.5 Avios per £1 on a MasterCard, this is not a bad rate.

However, remember that Tesco rounds down every transaction to the nearest £4, so a £7.99 transaction only earns 1 point and a £3.99 transaction earns nothing.

It is also worth noting that the Hilton HHonors Visa (which is free) earns 2 Hilton HHonors points per £1 spent which I value at 0.6p.  I doubt you’d value 0.6 Avios per £1 at more than this.  Annual fee cards such as Virgin Flying Club Black or Emirates Elite earn 1 mile per £1 spent on the MasterCard / Visa element whilst the Lufthansa Miles & More card is free and earns 0.75 miles per £1.

It is also worth remember that the John Lewis / Waitrose credit card pays you 0.5% cashback in the form of John Lewis and Waitrose shopping vouchers – and that card is FREE.  The ASDA Money credit card is also free and pays you 0.5% back in ASDA shopping vouchers.


As I said initially, there is no easy answer here.  This new deal, which means you are paying a net £90 after cashback to receive 6,000 Avios and the remaining card benefits for a year, may make it more attractive.

If you spend £5,000 per year in Tesco, get the card – you will do well with it.  For these people it is a decent deal even if you pay the full annual fee.

If you currently buy stand-alone travel insurance, it may work for you

If you pay for Club Europe, it may work for you – if you can time your application around a Club Europe booking to use the £50 per person discount code.  This is only a one-off benefit for the first year, however.

We then come to the sticky question of a sign-up bonus.

Even if the card would work for me, should I sit it out until Tesco throws in a better offer than 2,500 Clubcard points for signing up?

All in all, the card compares poorly with the new HSBC Premier World Elite MasterCard.   Your £195 fee gets you 40,000 Avios for spending £12,000 in the first year, airport lounge access, 1 Avios per £1 spent and (via the HSBC Premier current account) travel insurance.  However, with HSBC Premier restricted to people with large sums invested with HSBC or a high salary, you may not have the option.

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 ac

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  1. I was skeptical about this card a couple of days agao until someone posted about this bonus then got excited but after reading Rob’s post I am back to being a skeptical.

    HSBC premier that is then.
    Does anyone know if the investments can be for stocks and shares account?

    • Yes, they can. Can be a one off investment of £100 (the minimum) in just one fund of you want.

      • Dannyrado says:

        From what I can see, it clearly states £50k on the t&cs?? Are they not enforcing that?

        • They give you a lead in time of three months to transfer in the 50k or if a high earner to buy a home insurance policy or something similar. If you dip below the minimum, they give you time to bring it back up. Doesn’t even have to be an ISA invest or anything that big. We are using it quite successfully, in lieu of the plat card, as we don’t need the guest aspect of the priority pass. But we will see after the first year, when this supposed avios bonus appears in the account.
          If the uptake on the newTesco card is low, they may bring in a bigger bonus. Then we would get one for my OH, and just cancel out mine. No referral bonus l know. But you never know what they might bring in.
          Very sad about the end of gift cards tomorrow tho! Well stocked up now in advance….

  2. One thought. Tesco accepts Amex. I would normally struggle to reach minimum Amex spend (£2000p3m) to get the bonus if cannot use it at Tesco. That means I would struggle to get 5000 bonus.

  3. I’ve looked at this card a few times recently, I now view that for me it’s not worth it. I spend around £5000 per annum at Tesco however we use our BA cards which earn 1.5 Avios as well per £1, factor the loss of 7500Avios there and I can’t see the benefit to be honest.

    • Mr(s) Entitled says:

      But if you churn the BA cards the maths changes? In this instance you are earning Avios from Tesco on a consistent basis and picking up big chunks from BA every 6mths for very little effort.

      The article doesn’t expressly say so but I am a buyer of this card because I value clubcard points higher than avios.

      I have a good store of Avios which I rarely deplete due to the existence of cash offers elsewhere, the BA hard product, and my alternatives out of MAN for which the gate is just 30mins from my door.

      Clubcard I get to use instead of cash on a number of items that I require from Tesco and I still find value from Boost. One good example is Eurotunnel at 3x. Again, a service I use and thus a genuine saving.

      Maybe if I head over to ShopperPoints I may find a different conclusion to the same analysis.

  4. Good analysis, Raffles.

    One question which may be an unknown. “Whilst currency purchases made using the card at Tesco Travel Money are treated as purchases and not cash advances, they do NOT earn Clubcard points.” But do they count towards the £5k target spend at Tesco?

  5. tall trader says:

    I would not get involved, there is a big risk tesco will go bust soon

    • Mr(s) Entitled says:

      Insightful analysis. What’s their current CDS?

    • Please tell us what you base your comments on

      • My thoughts exactly. Now I’m not going to do any complex analysis myself but recently in the FT out of 24 equity analysts, none had Tesco as a ‘sell’ position, down from two a year ago. A decent indicator that Tesco is a viable business, no?

    • think you posted on the wrong website, this kind of quality post is usually done on lse.co.uk

  6. It is a big no from me.

    Using my Santander 123 credit card I already get a good discount from supermarkets and fuel so little point in using another card as any cost has to pay back this discount as well.

    I won’t even use my Amex in there for the same reason.

    If you do not have a Santander 123 card, then surely it is much better to use an Amex and get Avios that way

    • I don’t have the Santander 123 credit card but it’s inter alia 1% back at supermarkets and 3% back at petrol stations for £36 pa fee. This Tesco one has 2.4 avios/£ (so valuing avios at 1p = 2.4%) for supermarket and petrol (in Tesco!) spend but a net £30 pa fee in year 1 (£150-6000 avios at 1p-£60TCB). I’d therefore argue that if you’re a heavy Tesco spender (compared to Santander 123) the Tesco card tips it, and that’s before the 5k bonus at £5k spend

    • I wouldn’t call the Santander card the best discount available at Tesco especially with the limit on the amount you can spend and the monthly fee, it also doesn’t seem to be available anymore when looking earlier.

      The TSB card would be better for contactless 5% cashback for the time being if your comparing non reward accounts.

  7. Jim McCord says:

    Can I use the new Tesco Premium Card with Curve abroad, get points and only pay 1%.

    • TGLoyalty says:

      Yep but 1 clubcard per £4

      • Jim McCord says:

        Great. It looks the best out there!

        • At a return of 0.6%, an annual fee and a 1% charge from Curve there are better cards to be used for purchases even the Lloyds Avios Mastercard would be better at 0.33% than using Curve for transactions abroad. For withdrawals Curve is an option if you don’t have other options.

    • Yes but the 1% spread on Curve you’re paying away is greater than the 0.6 avios = 0.6% (at 1ppa) you’re getting. I’m such cases you’d be better off with a Halifax Clarity and remain flat. Or link Curve to a higher earning card (Virgin Black or IHG Platinum) at circa 1% return

  8. TGLoyalty says:

    When there was a gift card offer £5k might have been easy but without it I would struggle to hit £1k a year with the occasional shop and fuel

    Guess I’ll wait and see what happens with GC long term

    • That’s exactly my thinking. We perhaps spend £2-3k on groceries in Tesco, perhaps £1k at Tesco Direct so the gift cards would be a key deciding factor in getting this card.

  9. MR Bridge says:

    another benefit that has been missed in the article is: on fuel, instead of 1 cc per £2 spent, you get 1cc per £1 spent, NB you only get this when using the credit card as clubcard, not if you use a separate clubcard.

    with the 5k bonus, this is 3cc per £1 = 7.2 avios per £1 on fuel..best avios on fuel?

    • TGLoyalty says:

      I thought that was a quirk of the older one. Could swing the dial towards a full tank at Tesco every week rather than occasionally.

      Then this would make far more sense

      Anyone know if they allow supplementary card holders?

      • MR Bridge says:

        yes to sup cards, plus if you can make use of the club europe voucher, if you order the sup card after the main card, the sup card holder also gets a voucher

      • Will Squires says:

        It works with the Current Account debit card, surely it works with this too?

  10. Maybe silly question Do you still get your normal 1 club card point per pound spend on top of credit card point so 2 club card points/ 4.8 Avios per £1 spent at Tesco?

    Furthermore Tesco direct online is an amazing retailer it has the biggest range of computers at great prices in comparison to any of competition when you factor in normal club card points, credit card club card points plus cash back club card points using Gate 365…

    Recent purchase of three basic computers for work came to just over £1,000 I got in return…
    2,400 Avios from normal CC points
    4,800 Avios from cash back CC points
    1,500 Amex Avios
    8,700 Total that’s 8.7 Avios per £1 spent!

    With this new Tesco credit card you would get an extra 700 Avios taking total to 9400 or 9.4 Avios per £1 spent…

    I must add that the customer service I received the only two times I used them was beyond belief… example the three computers had windows 8.1 home but advertised as pro so Tesco negotiates for me from the supplier a £100 discount per computer to allow me to upgrade!! Plus they even agreed to refund to a different card (I did not want to loose my points)

    Ps am I correct in thinking if I had of bought £1000 of gift cards 20 x £50 using Amex and then used the gift cards to pay on Tesco direct, I would have earned a further 3000 CC points 20 x 150 which is 7,200 Avios…

    This would give me a total of 15,900 using Amex or 16,600 Avios using new Tesco credit card…

    If this is the case there is no better way to earn Avios thatbis more generous… Furthermore Tesco direct sells everything you can think of for your home even use it for business purchases… the benefit is they list others suppliers but you still get the CC points!

    • No, you cannot earn bonus or standard CC points on buying Tesco’s own GCs.
      You only get it when spending it. So you cannot add your last bit of extra Avios.

    • Tesco branded gift cards do not earn cc points when purchased.

      • Indeed, I think they just see them as a form of payment – you then earn the Clubcard points when you use them in store for purchases.

    • As the Tesco gift cards can be used to buy gift cards they don’t award points on their own cards.

      • I’m not exactly sure that that is the reason. I don’t believe F&F gift cards can be used to buy other gift cards yet you don’t earn cc points on them?

  11. Can you get a secondary card on Hsbc for free to get lounge access ?

  12. OT. I may be selling a house with a couple of months before buying a new one. During this period would I be able to get a HSBC premier aaccount & CC?

    • Tricky if there is no way of verifying your current address, which there wouldn’t be.

      • I am not living in the house I will be selling so I don’t think that would be an issue.

        • There is also £150 + £50 switching incentive from HSBC, but you should not have held any HSBC current account in previous 12 months.

          If you qualify and apply for HSBC premier credit card this switching incentive will cover the premium card fees.

          • To rephrase the incentive is for the HSBC premier current account.
            Once you have Current Account and then apply for Premier CC you can cover the first year’s fees.

  13. I am struggling with what to do now Diamond Club is no more. No offer from them so I cancelled the card. I use my BA card everywhere I can, but Aldi do not take Amex.

    For now i have returned all non Amex shopping to my Nationwide CC, whilst a nice bonus from Virgin comes along. Can anyone suggest anything else?

    I have the fee paying Ba Amex and I have to spend £5000 before April to get my 2 for 1.

    • Will Squires says:

      If you’re up for straight cashback NatWest Reward is worth a look at, 1% back at supermarkets excl. fuel (including Aldi and Lidl), 1% back on all contactless until the end of the year at least (it’s been extended several times already), 0.5% back everywhere else.

      The 1% cashback at supermarkets was boosted to 3% for Christmas last year – not sure if that’ll happen with the interchange cap.

      £24/year or free with the £3/month NatWest Reward Current Account (which pays 3% back on most monthly bill DDs with no minimum pay in). I’ve earned ~£150 with both the account and the card in the last 12 months, well worth £36 in fees.

      I keep looking for ways of doing making a travel reward card make sense but I cant achieve more in value terms than what I get from Amex (Platinum cashback + Gold to churn) + Natwest Reward Mastercard.

    • A Virgin MBNA card bonus is currently on albeit not as high as previous bonuses

  14. This is what Ive read on the cashback site and its offering £66 Cash back not £60 on mine??
    “Receive an extra 2500 Clubcard points when you apply by 5th January 2017 and are accepted. You must make a purchase or balance transfer on your Premium Credit Card within the first 2 months of account opening. Terms and conditions apply.

    Enjoy our best Credit Card Clubcard points earn rate, and if you spend £5000 on your card in Tesco in any year you’ll receive 5000 additional Tesco Clubcard points. Terms apply.”

    So Im a little confuded but my basic understanding is:

    I’ll get £66 CB making card fee just £84
    I’ll get additional 2500 CC Points = 6000 Avios after 1 purchase
    If I spend £5000 on it in 1 year I’ll get 5000 bonus CC points = 12000 Avios
    PLUS (?) 1 CC point per pound spent in TESCO ( I would only use it there) so would I get an ADDITIONAL 5000 CC point to convert to another 12000 Avios as I’ll have spent £5000 Or is is just the bonus points I’ll get?
    So 30000 Avios total. Is my math correct?

    • That’s due TCB adding 10% topup this weekend. Of course Rob can only state whatvis available to standard members.

    • Yes. Your math(s) look about right. Bear in mind though that you would get the 1 club card point per £ in Tesco regardless of what card you use. I find it much better just to look at the delta.

      • Thanks…”you would get the 1 club card point per £ in Tesco regardless of what card you use. I find it much better just to look at the delta.” Sorry not sure what that means?

        • Delta in maths refers to the difference or a change – Genghis is meaning that as you get the 1 Clubcard per GBP as standard (regardless of payment method) he wouldn’t factor it into the calculation and would only be looking at what difference using the Tesco Credit Card made

          • So does this mean I could payin Tesco with my Amex and swipe the Tesco CC for the points? Surely this would mean that I technically wouldnt be “spending” my £5000 on the Tesco CC to meet the minimum £5000 for the bonus? Sorry to be such a numbskull!

            • No, it wouldn’t count as spend on the card. The main use of this to date has been at Tesco petrol stations where using the Tesco credit card as a Clubcard (which the assistants are used to) gives higher earnings.

              Overall I don’t spend anything near £5k/year with Tesco (as long as you exclude gift cards!), even though they’re the main supermarket I shop at!

          • Thanks Alan

    • So if I divide 30000 Avios by spending £84 its a value of 3.5 pence per Avios??? Thats a lot per avios point. Probably not worth it for me.

      • The maths doesn’t work exactly like that. You’re spending net cash £84 (after TCB) to get 2500 cc points=6000 avios with the sign up bonus, valued at 1p each that’s £60 in monetary terms, so a net initial cost of £24. That cost then ‘opens the door’ to further earning. So if you spent £5k in Tesco in the year that would be 5000cc points from the credit card spend and 5000 cc points from the bonus (disregard the 5k points for scanning your Clubcard as you’d get those regardless of the card you used). So total 10k cc points = 24k avios for 5k spend in Tesco. Valuing avios at 1p, this is £240. So an overall earnings rate of (240-24)/5000=4.32%. This is a very good ongoing earnings rate but only if you spend £5k in Tesco. Can someone please check my maths? :)

        • I think you lost me at “the…” lol! Maths never my strong point!

          So in simplistic terms I would get 5000 points bonus for spending the £5K, 5000 points for spending £5k on the card PLUS 5000 points anyway for swiping my CC as a clubcard? So 15000 points + the 2500 sign up bonus (42000 avios?) Would this work with shopping at Tesco online? I presume I need to change my CC details on there if I get the new card instead of my usual one

          • In simple terms, yes but not how I would think about it. Works with online. No need to change CC details on your online account

          • I’ve just sat down and looked at this card again. I’m with Sue in the calculations – you get 2500 sign up, 5000 bonus for spending £5k , 5000 pts for spending in store using yr Clubcard, 5000 pts for using the credit card in store = 17500 cc pts for spending £5k in Tesco = 42000 Avios. The equivalent spend on the BA card would just be 5000 cc pts @ 2.4 = 12000 plus 5000@ 1.5 = 7500 = total only 19500. So difference is 22500 Avios for the cost of £150 – £66 TCB = £84 = 0.37p. Is that not a decent deal if you can easily spend £5k in Tesco?

            • How long is the £66 offer on TCB

            • Seems semi-permanent.

            • I don’t think that’s the right logic, Liz. Where’s the cost of the BA card in those numbers?

            • True I didn’t factor that in – but if you can afford to divert your Tesco spend to this card and still get sign up bonuses elsewhere then this is a good card. We have just cancelled 2 platinums and 1 SPG and about to cancel a 2nd one. Planning on getting the BAPP next but think this will work for me too.

            • Assuming spend £5k in Tesco, the numbers are as follows (someone please critique maths):

              This Tesco card = 5k (spend)+5k(target bonus)+2.5 (sign up)+5k (including swiping Clubcard as others seem to like to include in their analysis) X 2.4 = 42k avios = £420+£66TCB less cash cost £150 = £336/£5k = 6.72%.

              Using a new BAPP = 7.5k avios + 5kcc X 2.4 = 19,500 avios+26,000 (if referred) = 45,500 = £455 – £195 cost (but potential prorata refund) = £260/£5k = 5.2%. So lower but half way towards a 241. On my recent China J trip that would be worth 150k x 0.5 = 75k avios or Singapore in F 216k (I think) x 0.5 = 108k avios, provided hit £10k spend.

              Point being, I think the Tesco card is decent provided you can spend £5k in Tesco but exhaust your higher earning opportunities first.

        • But by spending £5000 in Tescos on this card you’re missing out on spending it on a different card. £5000 would earn 7500 avios on the BAPP so your net benefit is 24k-7.5k = 16.5k. Still a decent return but you’re also missing out on that £5000 going towards introductory Amex churning bonuses.

          With the cashback for the first year this card is close to being good thanks to the bonus points and insurance however certainly not a no-brainer. I’d benefit from the insurance but with the small risk of cashback not tracking it’s still not worth it to me. On an ongoing rate it’s not worth it unless you can easily spend £5000 in Tescos and still spend enough elsewhere to pick up other bonuses/2for1 voucher.

          • Very true. I was calculating the simple earning rate on the card. The same is to be done for other cards when you think about getting them to ensure you get best value for you.

            I churn heavily such that the average return is a lot higher (e.g. for Plat with wife referral it’s 92k MR = £920-£80 on fees on £4K spend = 21% return)

            But we still need somewhere to put all our annual spend after we (wife and I) have done 4 Plat and SPGs for sign ups and 2 (or thereabouts) BAPPs for 241 etc. In past 12 months also done 2 Lloyds Amexes, 2 Virgin White, 1 IHG, 1 Virgin Black but done lots of other expenditure on DC – I might be missing some).

            Point being is that if after you’ve churned / you’re not inclined to churn, you need somewhere to put your expenditure. So for us who shop at Tesco, if I think we will spend £5k in Tesco (and I’ll see what happens re gift cards) then I’d be quite happy for this 4.2% earn rate.

  15. i would spend about £6000 a year in Tesco’s on petrol and groceries etc.I currently swipe the Tesco free credit card but pay with my BA amex card and get an extra 1.5 points. Can I use the new Tesco Premium card and pay with my BA amax card the same way?

  16. I see Raffles is now Rob :)

  17. If i use this card purely for spending at Tesco’s and buying Tesco’s Fuel then, according to my calculation, I would earn 4.75 avios points per £1 spent. This is more then the 3.9 avios per £1 I’d earn by using the Tesco’s credit card as a clubcard and paying with a BA Premium Amex. Does this justify the £150 annual fee? I’d easily spend £5,000 per year.

  18. Typical… I signed up to the Tesco Premium Credit Card last month so missed out on this… story of my life!

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