Nutmeg Avios

Earning Avios from the Tesco current account two years on – what has changed?

Love Clubcard, don’t collect Avios?  You should be reading our sister site, Shopper Points (, which covers the latest Clubcard and Nectar offers without any distracting frequent flyer talk!  Why not check it out now?

Back in June 2014, Tesco Bank launched its current account.  There was a lot of hype about the account at the time but Tesco was, probably correctly, keen to play it down whilst the IT bedded in.

I expected that, after a few months, there would be a major push with a substantial bonus for moving your banking across.  That has not happened.

M&S Bank and First Direct have long standing offers of £100 bonuses for new customers.  It seemed logical to me that Tesco Bank would offer 10,000 Clubcard points (24,000 Avios) at some point.  But, apart from a couple of very tightly targetted trials, nothing has happened.

Is it worth a look regardless though?

Tesco current account

Here is the Tesco Bank website promoting the current account.

The one big change since the launch is that you no longer need to pay in £750 per month in order to get free banking.  The £5 monthly fee for dormant or low value accounts has been removed.

Earning Avios via Clubcard points

You will earn Clubcard points on all of your debit card transactions:

1 point per £4 spent in Tesco (0.4 Avios per £1)

1 point per £8 spent elsewhere (0.2 Avios per £1)

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 may 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.

When the Tesco Bank current account launched, these earning rates were seen as poor.  Since then, Tesco has cut the earning rate on its Tesco Clubcard MasterCard to the same level – 1 point per £8 spent.

And a subsidised interest rate

Current account holders receive 3% interest on the first £3,000 in the account.

Whilst there is no sign-up bonus, the 3% interest paid on sums of up to £3,000 is – given current interest rates – an incentive to get an account.  You would receive £90 of interest per year, at least double the rate of the best instant access savings account.

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.


The Tesco Bank current account has not got any better since it launched, assuming you would have paid in £750 per month to avoid the fee which has now been scrapped.  However, with interest rates refusing to improve and credit card earning rates dropping down, it looks better by comparison.

It is worth mentioning that Tesco Bank has a good reputation for customer service. You can also pay in cheques and make cash withdrawals at 300 larger Tesco stores across the country.

The lack of a moving bonus remains problematical.  It would be a disaster to open an account only for Tesco Bank to offer 10,000 Clubcard points the following week.  I doubt they would offer both a sign-up bonus and 3% on your first £3,000, however, and in the long run the ‘3% on £3,000’ – which has been in place since the account launched two years ago – would be more valuable unless interest rates elsewhere improve.

If you make a lot of payments with a debit card then the Tesco Bank current account may be worth a look.  For me, the only debit card bills I pay are financial and those would not earn me Clubcard points anyway.  If you don’t like or can’t get credit cards then the debit card gives you an Avios earning rate which is now nearer to matching Visa or MasterCard credit card.

Love Clubcard, don’t collect Avios?  You should be reading our sister site, Shopper Points (, which covers the latest Clubcard and Nectar offers without any distracting frequent flyer talk!  Why not check it out now?

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  1. Paul says:

    Is anyone able to confirm whether points are awarded from tax payments to HMRC, please?

    • Yes I have been using this account to pay HMRC since 2014 and it earns club card points.

      • My OH will have about 40K to pay HMRC in January (Capital gains on a BTL), could this be the most avois advantageous way to pay? Even if Supercard still works next year I think this would exceed the annual limit on the card?
        Thanks in advance for any replies

        • As the Visa or MC HMRC credit card fee is now just 0.4% on most cards you have a lot of options.

          Virgin Black is 1 mile per £1 so you are getting 40k Virgin for £160.

        • Danny says:

          Slightly OT: Just to thank all those who offered me such helpful advice on how to pay HMRC from overseas on another thread last week. As suggested, I switched to a UK VPN, chose UK as my billing address (even though it’s not) and suddenly all was fine and I’m now sitting on a big stash of Avios as a result!

        • Reney says:


          Can you tell me which thread that was, I need the same information and google search did not come up with the thread, nor did searching hmrc on all of last week’s threads.

          Many thanks.

        • Download Tunnelbear onto your PC or iOS device (free up to 500MB per month) and you’re sorted.

        • Danny says:

          I think it was one of the threads last Wednesday or Thursday. But it was all in the comments (so may not show up on a search) and didn’t really say anything more than I mentioned in my previous comment. Just make sure to download a proper VPN (Raffles suggests Tunnelbear, I used CyberGhost) as just using a VPN plug in on my browser didn’t work for me. Choose UK as the country in your billing address and put in a dummy postcode if your billing address is overseas. As long as the transaction is approved by Verified by Visa/Mastercard Securecode it seems Worldpay don’t really care about the billing address.

        • Mr Dee says:

          Glad you got it to work, I suggested it might be the IP the other day as worldpay would usually flag the ip and decline for the standard merchant setup, the billing address could also be another reason for it being declined.

        • Talay says:

          I could also use information regarding obtaining Avios when paying HMRC. I do a lot of this !

      • Paul says:

        Awesome — thanks

  2. You’d be better off putting your money in:
    Nationwide – 5% up to £2500
    TSB – 5% up to £2000
    Santander – 3% up to £20,000

    • You also can get £100 for switching to Nationwide if referred by someone (they also get £100). You can also open a linked regular saver at 4%.

      • Frenske says:

        The Flex regular saver is 5% and up to £500pm compared to others who only allow £250pm.

    • Paul says:

      Lloyds is, I think, more hassle though because I understand they mandate you switch your current account to them (whereas I don’t think Tesco do).

      • Callum says:

        They don’t. All of the current accounts listed are much better value for savings than the Tesco account.

        • Dave says:

          The Tesco one is still useful though. The Nationwide 5% only lasts for 12 months, and the TSB 5% is limited to £2k per account. The Santander 3% carries an annual fee I believe.

          Hadn’t heard of the Club Lloyds account (will now investigate!) but the Tesco current account has been useful for me to use after my 2 x TSB accounts were full, regardless of the minimal clubcard points earned.

    • Genghis says:

      And I believe with lloyds to get the 5% your balance needs to be £4-5k

      • mark2 says:

        The rates are tiered. You also get a magazine subscription or Gourmet Club card. A couple can have an account each and a joint account. Lloyds also do cash back similar to Amex but usually a percentage rather than £x on spend £y e.g. recently 5% back on Waitrose and 15% on Pets at Home up to a limit. This also applies with the Lloyds Avios credit cards so I always buy the max in gift vouchers.

  3. David Douglas says:

    This current account is not available to customers who live in Northern Ireland
    Some excuse is trotted out about the different banking system
    However given that Santander.First Direct,Nationwide.TSB and Llyods can all cope with Northern Ireland based customers I think this is a very spurious argument
    As a Tesco Credit Card holder too I feel very disappointed that I am unable to apply for the Current account

    • John says:

      Well, First Trust Bank had a £200 switching bonus for NI a year or two ago, which while technically available to GB customers was not possible in practice

    • Stephen C says:

      Just realised this myself, very irritating!

  4. Gavin says:

    Obviously I mean Clubcard points!

  5. Jerry says:

    Unlike the other current accounts mentioned above the Tesco account doesn’t appear to require you to switch, credit a minimum sum per month of set up any direct debits, so unless I’m missing something you can use it as a savings account to earn £90 a year. Did I miss anything?

    • Paul says:

      Nope, don’t think so. That’s my thinking. Not requiring you to switch seems the main benefit over Lloyds etc.

      Only thing keeping me from applying was, as Raffles says, the belief that we might see a signup bonus at some point!

    • Genghis says:

      Correct. I’ve just checked again for new customers and both TSB and Nationwide don’t require you to switch nor to have any DDs. They do, however, require a minimum amount going into the account each month but I just do a standing order to the account and then one from the account for the same amount plus the approx monthly interest earned.

  6. Paul says:

    It would count as a cash advance on a credit card, so my guess it’s itemised separately as cash and hence not eligible for clubcard points, though I don’t actually know.

    • Callum says:

      It wouldn’t work full stop on a credit card.

      And it’s not itemised as a cash advance, it goes through as a single purchase. Particularly useful with my regular supermarket cash back deals I get with Lloyds and Halifax.

  7. Jonboy73 says:

    I don’t think club lloyds do require you to switch, they do however want 1500 a month going in and 2 dd’s coming out.

  8. Jonboy73 says:

    And don’t forget Halifax, whilst you can us use Lloyds, tsb and teach etc as savings account almost, Halifax is pay in 750, 2 active dd’s and no requirement to keep a balance and you get £5 a month “reward” the proverbial money for rope that.

  9. Jonboy73 says:

    Off topic I know but has curve fixed online payments?

    • Travelbug says:

      Yes. At least it was working for me when I paid my council tax online.

    • Sideysid says:

      Curve online payment issue is resolved although they don’t support the 3D secure payment so there may be issues with some transactions. They are looking at options to implement this is the future however.

      • jonboy73 says:

        ok thanks that would make sense. as some transactions are going through others not.

  10. Tilly71 says:

    I completed a survey recently on this account so hold fire for the moment as an offer of 5000 clubcard points as an introductory bonus is being considered.

  11. Imbruce says:

    Just got my Curve Card, it comes in a rather large box.
    As it does not support 3D secure payment, I am not sure if it is worth having the card
    The main reason I wanted it was to pay HMRC with Amex but as the fees are high, I think I will
    stick to using my Visa card to pay them.

  12. Sideysid says:

    Also just to add the debit card works the same as the credit card when using as a clubcard for Tesco petrol. You would receive 1cc point per £1 spent rather than 0.5.

  13. Sideysid says:

    Another point for me to chime in with is that there was a targeted offer of 5000 bonus points to open an account. I took advantage of this, but there was nothing offered to my partner, even though similar spending patterns were used on both clubcard accounts.

  14. Will says:

    Halifax reward is the best account for people who don’t keep a big balance in their current account. £5 a month as long as you:
    – stay in credit
    – pay in at least £750 a month
    – pay at least 2 direct debits.

    It’s over 6% interned on balances under £1000!

    • John says:

      As I keep my Halifax balance at £50 except for the few seconds it takes to send money in and out, my interest rate is 120%

  15. i assume tesco would pick up this sort of activity if regular, scaling it up to anything worthwhile would be the challenge

    • Gavin says:

      Still a way for a non-curve user to get avios from cash withdrawals perhaps. I only spend about £200 on cash, usually just the barber and a few incidentals, so this would only yield 720 avios / year. I suppose I should be getting out £200 cash-back / day and redepositing it instantly to take full advantage. Wouldn’t last long though! May be worth getting the current account if a good sign up bonus comes along.

  16. Looks like I have been offered 5000 points in 2014 with no switch and £100 with a switch in April 2015 (ending June 2015). Nothing offered for nearly a year (I probably should have done one of those!). Only ever offered to me and not my wife.

    No sure with the Clubcard changes (and Tesco generally looking to save money and selling off various international parts, and none core businesses) whether these sort of offers will be more or less likely in the future.

    • Gavin says:

      Less likely according to someone I spoke to last week at Tesco pet insurance. Possibly same policy affects the other financial services

  17. Raman says:

    The small print explains why I wasn’t getting Avios for depositing money into another bank account using the debit card. Ah well was worth a try 😉
    Thanks Rob

  18. Virgin just emailed with their Tesco club card offer – 15% bonus if you convert from 1st May to 10th June – it’s on the Tesco website – nothing showing for BAEC or Avios as yet.

  19. Tilly71 says:

    You also get 1000 bonus vurgin miles if you opt into auto convert, do it with this month’s clubcard vouchers due soon, collect the bonus of 15% on top and then turn off auto convert.