This article is mainly for the benefit of our 2,400 email subscribers. Readers of the site will know that the ins and outs of the account were discussed heavily in the Comments section of the ‘what will it offer?’ post yesterday.
All of the rumoured features I listed yesterday were confirmed:
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
1 point per £8 spent elsewhere
There is ‘small print’ attached to the ‘1 Clubcard point per £8 spent on the debit card’. All payments to ‘banks and financial institutions’ are exempt. This means that you cannot pay your mortgage, pay off a credit card bill or pay money into a savings account. It MIGHT work with payments to the Inland Revenue but that is not something that most people can benefit from.
It is also worth noting that debit card spending is rounded down to the nearest multiple of £8. A £7.99 lunch payment will earn you exactly zero Clubcard points. This is a major deterrent unless you are using the card for large transactions.
There is no sign-up bonus. This puts the account at an immediate disadvantage to the Marks & Spencer account which currently offers £100. The M&S account does not pay any credit interest – but the sign-up bonus is also tax free. The maximum amount of interest you can earn on the Tesco account is £90 per year (3% on £3000) and that will be taxed.
I would strongly expect a sign-up bonus to appear in the medium term. If you switch now in order to earn a few points from the debit card, you are risking missing out on 5,000 – 10,000 points as a sign-up deal later.
Foreign exchange use of the debit card incurs a 2.75% fee. This is market level, I admit, but Tesco could have made this free in order to score some marketing points.
All in all, I don’t see anything here to convince me to switch – unless it turns out that Inland Revenue payments do count for earning Clubcard points via the debit card.
How to earn Avios from UK credit cards (September 2022)
As a reminder, there are various ways of earning Avios points from UK credit cards. Many cards also have generous 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:
There are two official British Airways American Express cards with attractive sign-up bonuses:
You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points.
EDIT: Until 25th October 2022, there is an exceptionally generous sign-up bonus on The Platinum Card. You will receive 60,000 Membership Rewards points – double the usual amount – and £200 to spend at Amex Travel. You need to spend £6,000 within six months to earn the bonus.
Run your own business?
We recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, along with a sign-up bonus worth 10,000 Avios.
You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies and has a 30,000 Avios sign-up bonus.
There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.
Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.