Breaking: Tesco to halve earning rate on Tesco Clubcard Mastercard

This article is closed to new comments. Feel free to ask your question in the HfP forums.

• Matt says:

  2 Sep2 September 11:38

  This makes the Tesco Clubcard MasterCard virtually useless. Might cancel mine. Depends what the next best Visa / Mastercard is.

  • Sandgrounder says:

    2 Sep2 September 12:11

    Not if you drive- no indication the 1 point per £ on fuel will be dropped. Yet!
    I never pay for anything on mine though,,I must admit.

  • cheekychappi says:

    2 Sep2 September 13:11

    Exactly. Don’t forget you get more points by using Tesco credit card instead of your clubcard (and then pay with Amex).

• DW201 says:

  2 Sep2 September 11:46

  NNOOOOOOOOOOOOOOOOOOOOo

  This is the beginning of the end! Judgement day is coming The skys will be burning, rivers will run red and ill be putting expenses on a debit card 🙁

  • JQ says:

    2 Sep2 September 13:06

    Surely a credit card is still better since you get 50+ days to pay the bill. Unless debit card rewards start improving (there are some good debit card rewards in Australia and Canada)

• Nick says:

  2 Sep2 September 12:12

  Having recently acquired the HSBC Premier Mastercard I’ve cancelled off my Tesco Credit Card….good job too!

  Kinda hints towards and overall clubcard devaluation coming….

  • David says:

    2 Sep2 September 13:25

    Tesco was a free card, given the current uncertainties (across providers), I wouldn’t be cancelling any card that I value (or have valued) until the dust settles.
    Tesco could back track (a little), or offer something in return. HSBC could change.

    Having said HSBC could change, I do wonder if the future is a model whereby You pay a annual fee, and that represents the only income to the card issuer (hence it needs to be quite high) and they use virtually the whole interchange, after processing costs to pay for he loyalty reward.

    High spenders will go to the worse deals, there should still be some competition market for them.

• Scott says:

  2 Sep2 September 12:20

  I would be interested to see how the schemes such as Avios view this. Transfers from credit cards and Clubcard are a revenue stream for them as my understanding is that they sell the points/miles to the various schemes. Will they be looking for other ways to replace this revenue? If so what might that look like, if not does this reduce the number of points/miles in circulation which would in effect improve the availability of rewards?

  • Rob says:

    2 Sep2 September 12:45

    This is BA’s biggest risk with the Avios devaluation. BA NEEDS to sell Avios to third parties. Why?

    a) you fly BA and earn 5,000 Avios. You redeem those for a £25 case of wine from laithwaites. BA is £25 down.

    b) you earn 5,000 Avios from Amex. BA receives £50 from Amex. You redeem those for a £25 case of wine from Laithwaites. BA makes a £25 profit.

    The big, big risk from the Avios devaluation is that the money from b) falls because people see less value is converting from Tesco or collecting via Amex. There are plenty of other Clubcard deals and plenty of other credit cards. Those people who earn mainly from a) will keep collecting but BA is losing money on those people!

    • JQ says:

      2 Sep2 September 13:08

      Do you know for a fact that BA actually receives 1p per avios from Amex?

      • Rob says:

        2 Sep2 September 14:16

        I know roughly what a wide range of partners pay BA for their Avios. People will usually tell you when you ask, and I always ask! Obviously the contracts are more complex than a straight xp per point, though.

    • cheekychappi says:

      2 Sep2 September 13:20

      ‘a) you fly BA and earn 5,000 Avios. You redeem those for a £25 case of wine from laithwaites. BA is £25 down.’

      OTOH BA has attracted/ retained your custom by giving you a £50 incentive (5000 Avios). If you spend it on flights, that’s £50 on paper but often a lot less in real cost to BA. If you convert to wine, BA has just halved-ish the £50 liability thanks to Laithewaites needing to recruit all those ABC1s.

      Point being that (a) is an important marketing lever for BA, not primarily a cost.

      • Rob says:

        2 Sep2 September 14:15

        BA doesn’t think that way – Avios is a revenue-centre for the company.

        • cheekychappi says:

          2 Sep2 September 14:42

          Think again – eg 2013 AR – it’s all about the marketing. Sure, they need to account for the investment & you wouldn’t invest unless you expected (in time) to generate additional income:

          Avios
          Avios, IAG’s single reward currency,
          continued to grow and engender loyalty
          with its members in 2013. Members have
          collected 97 billion Avios over the past
          12 months, demonstrating the continued
          attraction of collecting and saving Avios
          to redeem on aspirational travel rewards.
          The currency also drives additional revenues
          to IAG airlines as the benefits of collecting
          Avios drive customer behaviour. Research
          conducted by Avios has shown that since the
          introduction of the global Avios currency for
          previous Airmiles collectors, they have shifted
          their airline preferences from competitors to
          British Airways in the UK market. The number
          of journeys booked by members of the
          Executive Club on British Airways has
          increased by 29 per cent since the launch
          of Avios in November 2011; illustrating
          that members find the Avios proposition
          increasingly attractive and are increasingly
          loyal to IAG brands.
          In 2013 Avios launched its travel rewards
          programme in South Africa. This was an
          exciting step towards achieving its vision of
          being the global leader in travel rewards. We
          established new partnerships with BP, Pick
          and Pay; and ABSA Bank in South Africa.
          We also extended our partnerships into the
          real estate sector with Lew Geffen Sotheby’s
          Real Estate and enabled members also to
          earn with Avis car hire.
          We have developed new ways in which
          Avios can be used to enhance customer
          choice and satisfaction. We launched our
          Cash & Avios product in October 2013 which
          enables British Airways customers to use
          their Avios as discounts on British Airways
          commercial flights. We also enabled Iberia
          Plus members to use their Avios to redeem
          in hotels, thereby offering our customers
          more choice and continued great value.

        • Rob says:

          2 Sep2 September 15:05

          You should know better than to believe what you read in Annual Reports 🙂

          Avios will be up for sale soon. The giveaway was the ‘guarantee’ of 2 CW and 4 Y seats on every flight. This is the same guarantee that Air Canada put in place for Aeroplan before they sold it, because otherwise the buyer has no guarantee of seat availability.

        • Worzel says:

          2 Sep2 September 17:00

          I reckon that when and if Avios is sold it’s likely to be to Aimia .

          http://www.decisionmarketing.co.uk/news/aimia-overhauls-nectar-top-team

          They already appear to be involved in Air Miles Middle East and (sorry) “Nectar” !

        • David says:

          2 Sep2 September 17:18

          Worzel:
          Firstly not sure what competition authorities would think of that take over idea. Well I say notsure, I’m confident public reaction would be very very poor.

          Secondly “airmiles” is of course just a licensed brand around the world, BA had the licensee for the UK, hence Airmiles UK which they also owned became the Avios.com scheme when they decided to stop licensing the brand for it and do the Avios thing.

          Aimia own aeroplan, but the Candian licensee of Airmiles competes with them.
          In addion to having Nectar in the UK, the also have Nectar Italy.

          Now, in UK terms the Nectar brand is very tainted (popular culture reference such as a Mock the week: “The answer is ‘2.3m’ what is the question?” “How many nectar points would you actually need for jar of honey”)

          Was it not for the messy global licensed structure, I could vaguely see them bringing back the Airmiles brand onto Nectar. But due to that global mess, it needs to be limited to certain countries residents. Airlines need a frequent flyer programme open to all globally.

    • erico1875 says:

      2 Sep2 September 17:34

      Is that not good then? If Avios are harder to earn, less people redeem them, then are BA not more likely to offer a bonus?

      • cheekychappi says:

        2 Sep2 September 17:38

        Who offers the bonus? BAEC or Tesco? 🙂

        Definitive answer required.

• Tilly71 says:

  2 Sep2 September 14:26

  So with this latest news today, what would be the overall recommendation for a new visa / mastercard after the changes on the Tesco Mastercard have kicked in for collecting flyer loyalty points?

  • Rob says:

    2 Sep2 September 15:04

    Full article on HFP tomorrow!

• Tilly71 says:

  2 Sep2 September 15:19

  Starting to steer towards the fee free Virgin Atlantic card – 1 mile per £2.00 spend on visa. Surely this is also another nail in the coffin for Avios redemptions outside of Amex usage.

  • Rob says:

    2 Sep2 September 15:39

    I would take the paid card. The extra sign-up bonus offset the fee (at least for the first year) and you are earning 1 mile per £1 on Visa.

  • Brendan says:

    2 Sep2 September 15:48

    The fee free AA card at 1.5 miles per £ on the Amex and 1 mile on the Visa is the best value IMO. The cons are that it is difficult to accrue miles by other methods and that a devaluation is probably on the cards soon.

    • cheekychappi says:

      2 Sep2 September 16:27

      no sign up bonus

    • Dev says:

      2 Sep2 September 17:00

      1.5 per £1 on the Amex and 1.5 per £2 on the visa.

      • Brendan says:

        2 Sep2 September 18:27

        Apologies, that sounds correct – I rarely use the Visa!

  • RIccati says:

    2 Sep2 September 19:32

    Do not crowd in/rely on Virgin. They have already cut routes that are interesting for redemption (Japan, SA) and the availability to redeem for Delta where it matters (eg, to Hawaii) is non-existent.

• Nick says:

  2 Sep2 September 16:11

  Sadly, the Lloyds referral programme is entirely a work of fiction. I’ve tried it 7 times, it has never worked.

  • Rob says:

    2 Sep2 September 17:49

    Works fine UNLESS the person you are referring is a Lloyds customer, ex or present – in which case the referral does not get sent. They also take 5 days to send out the emails.

    • petewally1976 says:

      3 Sep3 September 11:19

      I’m not sure this is right Raffles…I’m a Lloyds customer and received your referral. I had to chase the 4,500 point bonus but got it in the end.

      Also, I believe if you have a Club Lloyds account, the annual fee for this card is reduced to £12 instead of £24 although they’ve charged me £24 and I’m yet to chase them up on it.

      For anyone who doesn’t know, Club Lloyds is well worth having as a savings account as it pays 4% gross interest on balances of £4k to £5k plus either a free magazine subscription, gourmet club membership or 6 Vue cinema tickets plus access to a 4% regular saver account. Need to make sure you pay in £1.5k a month. My wife has one and we have a joint one with a standing order to transfer £1.5k each way on the same day each month and we get a magazine sub with the one account and Gourmet club with the other (the latter I don’t really rate though!). I could also get one myself but as a higher rate taxpayer the rate’s not so good (still pretty good though!).

• Danksy says:

  2 Sep2 September 18:05

  Goodbye Tesco Mastercard!

  • cheekychappi says:

    2 Sep2 September 18:16

    Goodbye extra petrol points for nothing when Tesco MC used as a clubcard!

    • Danksy says:

      3 Sep3 September 05:58

      I kissed goodbye to those when I got an electric car!

  • mark2 says:

    2 Sep2 September 19:13

    Goodbye FuelSave more serious!

    • cheekychappi says:

      2 Sep2 September 19:25

      Instant maths correction – add on the Amex points and it’s already £1000 = free

      • Jason says:

        2 Sep2 September 20:01

        I preferred the points, plus fuelsave, with pay.com, but £1000 a month on pay.coms will be coming morrisons way if I can find a convenient store to buy them and fill up.

        • Rob says:

          2 Sep2 September 22:49

          Of course you can avoid filling up – didn’t you read my Management Today piece this month?!

        • cheekychappi says:

          2 Sep2 September 23:05

          http://www.managementtoday.co.uk/news/1360700/execs-cars/

          I read it & very nice it was too 🙂

          Need a car round here, running 5 currently, not so bad as 3 of them are worthless! Badass 4WD, old Volvo. old BMW? All worthless, cheap to insure.

          Wife has a nice company Audi, I drive a 4YO BMW for daily stuff, nothing like as expensive as the article might make us fear.

          So – for the first 3 the depreciation has gone away & insurance all in is about £500. My car is depreciating @ £1500 pa (this year) plus insurance £250. Hers – forget the depreciation as not our cost, no free petrol so not a tax cost, but I guess it eats into her income tax etc so net cost not far north of £1500.

          Overall £3500 pa or so, will decrease. How does your taxi fare etc compare?

        • cheekychappi says:

          2 Sep2 September 23:18

          I suppose they cost a few quid to maintain

This article is closed to new comments. Feel free to ask your question in the HfP forums.