Tesco to launch a £150 Premium credit card

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.

(EDIT:  the card is now launched, full details can be seen here.)

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 miles and points from credit cards?  Click here to visit our dedicated airline and hotel travel credit cards page or use the ‘Credit Cards Update’ link in the menu bar at the top of the page.)

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  1. Maybe I misread it but the text I received seem to suggest 2 Clubcard points per £

    The Premium Credit Card is a credit card and Clubcard in one, so for every £1 you spend on your card in Tesco, you’ll not only get the usual one Clubcard point for your shopping, you will also get an extra point.

    • I would read that as the usual 1 for showing a Clubcard and then an extra 1 for using the PCC..

    • Kevin says:

      You get 1 clubcard point in any case so spending in Tesco gives you 2 points overall.

      Have to say I was pretty shocked when I got the email. Thought I’d missed something.

  2. fiona says:

    Dear Fiona,
    As a Tesco Credit Card holder we thought you’d like to know that our most rewarding card is coming. The Premium Credit Card is a credit card and Clubcard in one, so for every £1 you spend on your card in Tesco, you’ll not only get the usual one Clubcard point for your shopping, you will also get an extra point. So you’ll be collecting points twice as quick in Tesco.

    Plus you can increase the value of your Clubcard points with Tesco Clubcard Partners and before you know it they could go towards a special night in, a family day out or a flight away. Better still, the card will also give you access to travel benefits.

    It’s worth noting our Premium Credit Card has an annual of £150.

    Most folks wI’ll read that as it’s said
    ie 1 pound per point.Only in the [email protected] does it say 1 point per £4

  3. GaryC says:

    The maths make a bit more sense if you also spend a lot of money at tesco. Compared to, say, a BA Amex you’d make an extra 0.9 avios per £ spent. If you are doing a large weekly shop, buying wine, lots of gift cards then I think it might make sense.

    I’m going to do the maths to see if it makes sense overall for me to drop my Virgin black card (which I got largely for the miles on visa transactions) in favour of this one. The annual fees will cancel out, but it could be the reduction in air miles from visa is made up for by the extra from tesco.

  4. Tilly71 says:

    You used to get this all for free with the old Tesco world MC and the green and white card you used to load at CS.

    • 6 months ago I got double the benefits of this new card and 650 cc points each year just for using it with no fee 😉
      Think I’ll be giving HSBC £45 more for their new card 🙂

  5. Andrew H says:

    O/T I’m in London this morning and I’d like to check out the Regus lounges (not office space, just the lounges). Any recommendations?

    • Most impressive ones are Berkeley Square and Lombard Street, although BSq especially can be busy.

      The new style one on Kensington High Street is interesting but a little out of the way.

      Others vary from useless (two chairs in a corner) to good, note that some in high profile office buildings require prebooking so that security is expecting you – although that does not apply to those above.

      • Andrew H says:

        Thanks Raffles. I will check those out today. Also Heathrow T5 if I can find the time.

        • Andrew H says:

          By the way, thanks for your recommendations on Flyertalk last year about choosing a hotel for the Chelsea Flower Show. I took advantage of the IHG 100% points bonus in December to book two nights at the Indigo Kensington. Mum is pleased with the room. They also offer a complimentary mobile phone which is very handy indeed (I don’t have one).

        • Heathrow T5 is LANDSIDE remember, not airside, in Arrivals.

          Glad you liked the Indigo. My parents in law stayed there a couple of years ago and liked it and Anika had a tour of it last week (not sure if an article will appear or not) and was enthusiastic.

          I have a personal issue with it purely because I like my hotels to be purpose built and not created from knocking through a row of Victorian houses, although I admit that Crowne Plaza Kensington pulls this trick off incredibly well.

  6. mark2 says:

    I suggest that it would be best to get the full details before passing judgement.
    But seems like very poor PR.

  7. Will Squires says:

    There has to be something more to this CC – although it would be strange to leave that off teaser email.

    I’m thinking it must be a signup bonus – but something like, say, 5 points per £ on fuel at Tesco PFS could make it worthwhile for me too…

  8. As other posters have said on here, there are two different rates depending on shopping at Tesco or elsewhere. Obviously Raffles’ calculations have been based on spend elsewhere and seeing some of the figures he came up with (£50k), it’s arguable whether you could spend anywhere close to that at just Tesco – but it does all add up if you are a big spender anyway –

    let’s say £200 on shopping per week = £10k.
    £200 on fuel per month = £2.4k
    Giftcards (if you can make it work?)

    • £200 at Tesco? We don’t spend more than £100 on food and there are four of us. (I am excluding the shocking £9 per kid per day I pay for – not optional – school lunch.)

      Even on your numbers though, it makes no sense.

      £10,000 at Tesco gets you 5,000 additional points compared to using the free card. £2,400 of petrol gets you 1,200 extra points. That would be 6,200 extra Clubcard points which, if taken as Avios, would be 14,880 Avios for £150, or 1p per point.

      That isn’t a bargain, and I’m sure 99% of Tesco customers spend less than that.

      • harry says:

        OK but what if the sign up bonus gets close to (say) the Gold Card 20K?

        ie about 10,000 Clubcard points if we round it up.

        Payable if you spend (say) £3000 in the first 3 months.

        I think I’d go for it if the fee were repayable pro rata

        • The fee won’t be refundable. Amex only does that because it is forced to by US accounting standards apparently.

          Any bonus of 7k or more (ie which got you under 1p per Avios) would be worth considering. I’d probably want to see at least 8,000 points, ie 0.75p per point, before I’d jump in because of the legacy cards I hold.

          For anyone frustrated by the current Visa / MC rates on new cards, I think a bonus of 6,000 – meaning you were paying 1p per Avios and got access to the card for a year – would be worth a HFP recommendation. I’d also have to recommend cancellation at the end of year one though ….

  9. 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.

  10. 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

    • 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?

        • 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.

  11. Fiona says:

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

  12. 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.”

  13. 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!

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