Maximise your Avios, air miles and hotel points

Tesco to launch a £150 Premium credit card

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If two sightings of something are enough to be called a trend, we have a new trend in loyalty credit cards – the premium-priced Visa or Mastercard.

Last week I broke the news about the HSBC Premier World Elite Mastercard.  This costs £195 but offers you 1 Avios per £1 spent and free airport lounge access.  You must be a HSBC Premier current account holder to apply.

Tesco Bank is now jumping on the bandwagon.  To be honest, I have no idea what they are thinking of.  The offering seems pretty weak although full details are not yet available.

Tesco Premium Credit Card

You cannot apply for the card yet.  This is the package:

Annual fee of £150

Earn 1 Clubcard point for every £4 spent (rounded down, per transaction, to the nearest £4)

Earn 1 Clubcard point for every £1 spent in Tesco

However you dress it up, this is poor.  This is virtually the same deal – apart from the enhanced rate for spending in Tesco – that the FREE Tesco card offered until it was downgraded in December.

Let’s use the ASDA Money credit card, which pays 0.5% cashback as a statement credit, as a comparison.  That card is free.

You would need to be redeeming your Clubcard points for a deal worth 3 x their face value to beat the ASDA card – and even then, it would be so marginal that the £150 fee would not be worth it.

Let’s look at it from an Avios point of view.  You would be earning 0.6 Avios points per £1 spent (ignoring, for the now, the loss of value because transactions are rounded down to the nearest £4).

The free Tesco Mastercard gets you 0.3 Avios per £1 spent.

If you value an Avios point at 1p, you would need to spend £50,000 for the Premium card to be a better deal.

(50,000 x 0.6p per £1 of Avios = £300 of rewards, whilst 50,000 x 0.3p per £1 of Avios = £150.)

More astonishingly, just to recoup the annual fee in Clubcard vouchers – ie to get back £150 of vouchers at face value – requires £60,000 of spending.

It is totally bizarre and I cannot imagine what Tesco Bank is thinking.  If they were offering 0.5 Clubcard points per £1 then I could make a case (just) for recommending it to high spenders.  At 0.25 Clubcard points per £1 it is a dead duck.

Unless, of course, Tesco Bank offers a substantial sign-up bonus.  6,000 Clubcard points would get you 14,400 Avios or 15,000 Virgin miles for your £150 fee and you would get extra benefit from using the card for non-Amex transactions.  That would be the lowest worthwhile offer I think.  If the bonus was higher than 6,000 points I would recommend it without hesitation.  There was, however, no mention of a sign-up bonus in the teaser email I saw.

There is also a promise of ‘travel benefits’ included. Perhaps we will be surprised here but there is no reason why Tesco should be spending money on benefits few customers would value. Let’s wait and see.

Want to earn more points from credit cards? – June 2023 update

If you are looking to apply for a new credit card, here are our top recommendations based on the current 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:

Barclaycard Avios Plus card

Barclaycard Avios Plus Mastercard

Get 25,000 Avios for signing up and an upgrade voucher at £10,000 Read our full review

Barclaycard Avios card

Barclaycard Avios Mastercard

5,000 Avios for signing up and an upgrade voucher at £20,000 Read our full review

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.

SPECIAL OFFER: Until 13th June, the sign-up bonus on The Platinum Card is doubled to 60,000 Membership Rewards points – and you get £200 to spend at Amex Travel too! Apply here.

SPECIAL OFFER: Until 13th June, the sign-up bonus on the Virgin Atlantic Reward+ card is doubled to 30,000 Virgin Points. Apply here.

British Airways American Express Premium Plus

25,000 Avios and the famous annual 2-4-1 voucher Read our full review

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review

The Platinum Card from American Express

60,000 points AND a £200 Amex Travel voucher until 13th June! Read our full review

Virgin Atlantic Reward+ Mastercard

30,000 points bonus (to 13th June) and 1.5 points for every £1 you spend Read our full review

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these offers:

American Express Business Platinum

40,000 points bonus and a £200 Amex Travel credit every year Read our full review

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

Capital On Tap Business Rewards Visa

Get a 10,000 points bonus plus an extra 500 points for our readers Read our full review

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending.

Barclaycard Select Cashback credit card

1% cashback and no annual fee Read our full review

Comments (32)

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

  • Tom says:

    Hi, apologies, totally OT – but I wonder if anyone can help from their own previous experience.
    Two QR sectors from mid-May finally credited to my BAEC account this morning, resulting in 855 tier points total for this tier point year (I was already on 575 prior to these two sectors).
    In the BA App my status still shows Bronze, and above the tier points display it says ‘retain Bronze’.
    I have completed 4 eligible BA flights this year (as confirmed on the App directly underneath the tier points total).
    Have I missed something or is there some sort of manual process required behind the scenes at BA which hasn’t happened yet? Many thanks for any advice…

    • David says:

      Just give it a couple of days to catch up. i had the same thing but it updated eventually.

  • David says:

    I thought the standard fee-free Tesco cards had an in-store rate of 5 points per £4 spent (and 1 point per £8 spent outside Tesco).

    However, looking at the website now, this has changed to an in-store rate of 1 point per £4 spent. Or did I miss this change?!

    Which sort of explains how they are positioning their new Premium card.

    The email also mentions access to “travel benefits”. Which will have to be superb to justify the annual fee!

    • mark2 says:

      The 5 points per £4 spent includes the one point per £ on your ClubCard.
      I made that mistake too.

      • harry says:

        I think you’re both thinking of the CC+ card, ISTR the earning rate changed (along with the standard fee-free cards) back in September last year

    • Rob says:

      If it is a World Elite MasterCard then the travel benefits would be outstanding (same as HSBC World Elite). That is highly unlikely to happen though – why should Tesco pay for, for eg, airport lounge access benefits when it is not a core thing for their demographic?

      • harry says:

        Because they’re trying to appeal to an improved demographic? Think how many Tesco customers fly with the LCCs – lounge access would be seen as a fantastic plus, even if it were no better than the 6x Dragonpass lounge passes (Barclays).

        • harry says:

          Stretch the ideas a bit more…Tesco aren’t exactly stupid where financial products are concerned (well, apart from those points I got for poor old Fido without actually paying any instalments 🙂 ).

          £150 fee MUST mean some substantial benefits – and Tesco has already said there WILL be travel benefits.

          That typically means insurance plus lounge access.

          I’m getting mildly interested to see what they have to offer.

          For reference, the Barclays deal is essentially insurance + 6x lounge access, cost is 12x £13.50 = £162

          Hmm, see where I’m heading?

          • Rob says:

            But Barclays involves paying for a travel add-on package. This is something which would only appeal to a small part of the Tesco base. Don’t buy it.

            For a start Tesco is a family player. Unless it was lounge access for 4 people it wouldn’t help much.

          • harry says:

            DP 6 passes can get 6 people into the lounge at the same time

        • harry says:

          Back in the day, we used to see ANYBODY who could afford to fly and did so regularly as wonderful marketing opportunities.

          ABC1C2 – all good possibles – if they flew.

          It’s why the airports charge such high rents to ‘Duty Free’ concessionaires – rents are willingly paid, the people who fly pay top dollar.

  • Fiona says:

    They are going for fast track check outs and a free cup of tea and biscuits per visit.

  • harry says:

    “For the Premium Credit Card you collect 1 Clubcard point for every £1 spent (£1 minimum) in Tesco and 1 point for every £4 spent (£4 minimum) outside Tesco in each purchase transaction.

    For all our other credit cards you earn 1 Clubcard point for every £4 spent (£4 minimum) in Tesco and 1 point for every £8 spent (£8 minimum) outside Tesco in each purchase transaction.”

  • Gordon says:

    I think that if you use the Tesco Clubcard Plus “savings” account by topping up monthly with your Tesco “spend” and then using it you still get 2 Clubcard points per £1.

    People used to sell this “idea” on eBay for 50p or £1!

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

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