Breaking: Tesco to halve earning rate on Tesco Clubcard Mastercard

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• Kathy says:

  2 Sep2 September 08:51

  Hmm, I might need a new back-up card for places that don’t take Amex, then – unless existing cardholders are keep the old rate.

• mark2 says:

  2 Sep2 September 09:07

  1.25 Avios per £5 spent on Mastercard, per £1 on Amex

• Jason says:

  2 Sep2 September 09:09

  I thought the Lloyd’s Amex card was 1.25 and the Lloyd’s MasterCard 0.75, in the duo pack cards.

• Mike says:

  2 Sep2 September 09:38

  Received new diamond club cards last month so fingers crossed they have no immediate plans to close the scheme to existing cardholders

  • cheekychappi says:

    2 Sep2 September 17:54

    Not sure that’s much guarantee. Hope you’re right!

    Just received 6 new Airport Angel cards with a July 2016 valdity, nice one 🙂 and oh so cheap 🙂 – and they HAVE already announced the scheme is closing.

• Laurence says:

  2 Sep2 September 09:41

  Yet another reason to be thankful that I got into this whole miles collecting thing with the Diamond Club Card.

  • cheekychappi says:

    2 Sep2 September 09:46

    can’t beat 2 avios per £! 🙂

    or can you? ie with available cards now

    • Jason says:

      2 Sep2 September 10:19

      On Amex you can 🙂

      • cheekychappi says:

        2 Sep2 September 10:55

        which card?

        • Jason says:

          2 Sep2 September 11:25

          Amex Gold first year. Plus buy a tesco gift card, in a petrol station, for 3 MR points per £. Mine only lasts to November unfortunately. 🙁

        • AndyGWP says:

          2 Sep2 September 12:50

          That deal is effectively dead – as not available to new applicants, and the number of people it applies to each month deteriorates as they reach the end of their first year.

          Nice whilst it lasts tho, but no real difference to what’s happening to the Tesco card in many respects (ie. what happens now, has a defined end date)

        • cheekychappi says:

          2 Sep2 September 15:51

          Lloyds Amex for the first 6 months

• cheekychappi says:

  2 Sep2 September 09:45

  same here

  they never really explained why the rate improved AFTER the card closed for new applications!

  slightly less smug than the premium rate earners on bmi diamond club cards, though 🙂

  • Jason says:

    2 Sep2 September 11:49

    Sorry I’m confused, what is the rate for the Lloyd’s MasterCard is it 1.25 avios per £5. 1.25 per £ or 0.75 per £.
    I never use the card, as I have better cards, unless it is 1.25 per £ 🙂

    • Liz says:

      2 Sep2 September 12:04

      It’s definitely 1.25 per £5 spend.

  • Andrew (@andrewseftel) says:

    2 Sep2 September 13:13

    At a guess, MBNA might have paid a lump sum for their Diamond Club points. If so, they’d want to get as much spend through the cards as possible before interchange fell. With the points a sunk cost, it’s easier to justify the increased earning rates.

• Matt says:

  2 Sep2 September 10:22

  This is all to do with the Interchange reductions going on in Europe right now. These are fees that merchants pay to accept the cards and due to EU legislation these fees are reducing. MasterCard previously was charging circa 0.8% for non rewards cards and circa 1.6% for rewards card, with the differential essentially purchasing the rewards for consumers. Due to EU legislation the rate for Credit Cards is coming down to 0.3% by next spring – therefore a wide variety of rewards cards are seeing their rewards cut and more will do so as otherwise these programmes would be loss making. If HSBC Premier card continues with its generous points offer then this would be due to HSBC subsidizing the scheme as during 2015 and 2016 they will be losing a lot of income from these cards.

  Amex is currently not covered by the EU legislation but at some point it is likely they will also see their interchange fees reduced which may lead to a similar position.

  • Percy Pig says:

    2 Sep2 September 10:45

    Matt,

    If I have understood correctly, you are talking about the fee that visa and mastercard charge to merchants to accept their cards?

    Do you think that means small businesses are now *less* likely to take Amex from now on? If the fee for Visa/Mastercard was around 1.6% and the fee for Amex (say) 3% to the business, the business might think it was worth accepting Amex.

    If the fee will now be 0.3% for Visa/Mastercard and 10 times that for Amex, knowing all consumers have non-amex cards in their wallets, I might be tempted to stop accepting Amex at all…

    • Matt says:

      2 Sep2 September 10:58

      Hi Percy,

      Interchange is only one of the 3 elements charged to accept cards but it is 90% of the cost of taking cards. The acquirer bank (examples of which in the UK are Barclaycard, Elavon, First Data, WorldPay, Lloyds CardNet) levies the total fee amount to any merchant taking card payments. The Interchange Fee is set by Visa and MasterCard but ultimately goes back to the card issuer as they slice of the transaction fee.

      Good point regarding Amex – I would agree that this will make Amex a less attractive proposition for some clients. Currently the differential is already quite high as Amex already charge higher fees but as you say this will further impact this differential. I’m sure Amex are looking into their options at the moment. Amex is a so-called three party scheme, which are not part of the regulation (Amex is a card issuer and card acquirer); the regulation has only affected 4 part[y schemes (Visa and MasterCard) – but in the future three party schemes could also be brought into this. Also companies like PayPal might look more expensive in the future as they also charge higher than standard VI/MC (in most cases PayPal has to absorb the standard VI/MC fees and then add additional mark up).

      • Nick says:

        2 Sep2 September 12:18

        The interchange regs are driven by merchants fed up with what they consider to be unfair fees. Amex are widely regarded as being more expensive (although they are a little different as their rates are not set by the Schemes as I understand it). Therefore inevitably they will have to reduce their fees, or see merchants refuse to take their cards. I imagine it will end up in a situation where interchange is either so small that it cannot fund any decent benefits; or it will stay high and consumers will be expected to foot the merchant service charge at point of sale. Some of the cheapest, nastiest companies already do this like Ryanair and BA.

        • Rob says:

          2 Sep2 September 12:48

          Card companies have 3 income streams:

          a) interchange
          b) interest payments
          c) annual card fees

          If a) goes down then b) and c) will increase. The risk on reward cards, though, is that these are generally held by people with good credit (after all, the interest rates are VERY uncompetitive) so income from b) is already minimal. That only leaves c) as a source of income.

          We are likely to see more cards with annual fees. What is more uncertain is whether sign-up bonuses fall – after all, what is the point in bribing someone to take out a credit card which is not very profitable for the issuer?

        • James67 says:

          2 Sep2 September 16:42

          But if they are profitable, and those profits are at risk due to more prevailant annual fees or higher fees, isn’t there then a chance we wi see higher signup bonuses in an effort to maintain interest in the caeds?

• Sebastian says:

  2 Sep2 September 10:34

  To be honest, I never saw the point of this card due to the £4 rule, I make all my purchases on card so I probably do around £250+ spend a month on transactions that total under £4/8. Thats why I have stuck with my IHG/Hilton, as I actually find those perks better long term as getting 1 Tesco point for a £7.99 spend seemed poor vaule. However, I suspect both the IHG and Hilton cards will suffer soon as well. At least Amex has some time left!

  • Jason says:

    2 Sep2 September 11:31

    At least it will be easier for my wife to know which card to use, anything under £10 was HSBC, and over £10, tesco MasterCard as the tesco card was 1.2 avios per £, but only at £2,4, 6 etc and she never got her head around that.

  • cheekychappi says:

    2 Sep2 September 14:15

    The point of this card is to earn more points when buying petrol. Can’t remember the last time I had to pay a monthly bill on it, maybe it was that Amazon freebie with payment by Mastercard. https://headforpoints.com/2014/12/09/be-quick-5-off-10-amazon-purchase-with-mastercard/

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