Maximise your Avios, air miles and hotel points

6,000 Avios (2,500 Clubcard points) on the £150 Tesco Premium Credit Card – worth it?

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Back in June, Tesco launched the Tesco Premium Credit Card.

You can check out the details here.  The representative APR is 56.5% variable, including the fee, assuming a £1200 credit limit.

Tesco Premium credit card

I was, for want of a better word, ambivalent about the card when it launched.  You were looking at a £150 annual fee for benefits which I felt, personally, were worthless.

Some readers disagreed with me.   I expected this – I did write originally that “Tesco has created a product which could work really well for some people but not for others.”

The ground has now moved a little:

Until 2nd January, Tesco Bank is offering 2,500 Clubcard points (6,000 Avio or 6,250 Virgin Flying Club miles) for signing up and making one purchase

The closure of the bmi Diamond Club Mastercard has left a lot of people without a decent Visa or Mastercard product for earning Avios

You are paying £150 to receive 6,000 Avios plus the other card benefits.  You really need to look at these other benefits to decide if the card is worth it.

Let’s go through them one by one:

1 Clubcard point for every £1 you spend on the card in Tesco or at Tesco Direct – plus a 5,000 point bonus if you spend £5,000

This card would pay you 2.4 Avios points or 2.5 Virgin Flying Club on every £1 you spend at Tesco.  This is a very decent return if you spend a lot of money with them, even if you don’t spend £5,000 per year.

Let’s imagine that you DO spend £5,000 per year in Tesco.  This may be possible if you always buy your fuel there or shop for a large family.

On that basis, you would earn 8,750 more Clubcard points per year using the Premium Credit Card than you would with the free Tesco Clubcard credit card which gives 1 point for every £4 you spend in Tesco and has no bonus.

I can recommend this card if you easily spend £5,000 per year in Tesco purely because of these 8,750 Clubcard points.  That would get you 21,000 Avios or 21,875 Virgin Flying Club miles which justifies the fee.

Comprehensive travel insurance for you and your family

This covers immediate family members under the age of 70 and includes 17 days of Winter Sports cover.  Some HfP readers have commented that the rules on pre-existing conditions appear strict but I am not an expert on this.

If you currently pay for travel insurance then this would have some value.  If you have it via another source – mine comes from American Express Platinum – then you won’t.

Depending on your age and whether you do ‘winter sports’, a bargain basement family policy will cost between £50 and £70.  If you are not leaving Europe, you will pay less.  That said, the moneysavingexpert.com ‘top pick’ (based on generosity of terms and payout history) is from LV and costs around £200 for global cover and just over £100 for European cover.

You need to decide what value, if any, you place on this benefit.

£50 off a British Airways Club Europe booking for up to nine people departing from London

This is a benefit which someone probably thought was a good idea but has been messed up in its execution.

If you never pay for Club Europe then it clearly has no value.  That said, on a route like Paris or Amsterdam the premium over Euro Traveller would drop to around £50 with the discount so perhaps you would do it.

If you book Club Europe for cash on a regular basis for your family then it clearly has real value.

However … this is a one-off benefit.  More importantly, the discount code is only valid for 2 months.  If you think that you WOULD take advantage of this benefit, it actually makes sense NOT to apply now but to wait until you are approaching a point where you will be booking.

Tesco guarantees that you will have your code within 10 days of your application being accepted.  This is positive and means that, if you are planning to book Club Europe flights for cash, you could delay booking for 10 days until you have applied for the card and received your code.

Note that this benefit is being withdrawn on 31st December 2016 and you must apply for the card before this date to receive it.

1% enhanced exchange rate when you buy travel money in a Tesco store using your card

I would value this at nothing, as I believe that I would still get a better deal using my 0% FX fee Post Office credit card or my 1% fee Curve Card for purchases abroad.  To get a small amount of cash, using an ATM using a normal debit card with a 3% fee is still likely to be a better deal.

Whilst currency purchases made using the card at Tesco Travel Money are treated as purchases and not cash advances, they do NOT earn Clubcard points.

1 Clubcard point for every £4 you spend on the card outside Tesco

The current Mastercard and Visa offers on travel credit cards are weak which enhances this offer.  Converted to Avios, you would be getting 0.6 Avios per £1 based on 0.25 Clubcard points.  With the demise of the bmi Diamond Club credit cards, which paid up to 2.5 Avios per £1 on a Mastercard, this is not a bad rate.

However, remember that Tesco rounds down every transaction to the nearest £4, so a £7.99 transaction only earns 1 point and a £3.99 transaction earns nothing.

It is also worth noting that the Hilton HHonors Visa (which is free) earns 2 Hilton HHonors points per £1 spent which I value at 0.6p.  I doubt you’d value 0.6 Avios per £1 at more than this.  Annual fee cards such as Virgin Flying Club Black or Emirates Elite earn 1 mile per £1 spent on the MasterCard / Visa element whilst the Lufthansa Miles & More card is free and earns 0.75 miles per £1.

It is also worth remember that the ASDA Money credit card is free and pays you 0.5% back in ASDA shopping vouchers.

Conclusion

As I said initially, there is no easy answer here.  This new deal offering 2,500 Clubcard points as a sign-up bonus may make it more attractive:

If you spend £5,000 per year in Tesco, get the card – you will do well with it.  For these people it is a decent deal even if you pay the full annual fee.

If you currently buy stand-alone travel insurance, it may work for you

If you pay for Club Europe, it may work for you – if you can time your application around a Club Europe booking to use the £50 per person discount code.  This is only a one-off benefit for the first year, however.

All in all, the card compares poorly with the new HSBC Premier World Elite Mastercard.   Your £195 fee gets you 40,000 Avios for spending £12,000 in the first year, airport lounge access, 1 Avios per £1 spent and (via the HSBC Premier current account) travel insurance.  However, with HSBC Premier restricted to people with large sums invested with HSBC or a high salary, you may not have the option.


Want to earn more points from credit cards? – October 2022 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

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

Barclaycard Avios card

Barclaycard Avios Mastercard

5,000 Avios for signing up and an upgrade voucher for spending £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.

EDIT: Until 25th October 2022, there is an exceptionally generous sign-up bonus on The Platinum Card. You will receive 60,000 Membership Rewards points – double the usual amount – and £200 to spend at Amex Travel. You need to spend £6,000 within six months to earn the bonus.

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable card perk – the 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 & two airport lounge passes Read our full review

The Platinum Card from American Express

60,000 points (SPECIAL OFFER), £200 travel credit and unbeatable benefits – for a fee Read our full review

Virgin Atlantic Reward+ Mastercard

15,000 points bonus 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 sign-up bonus and a long list of travel benefits Read our full review

American Express Business Gold

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

British Airways Accelerating Business American Express

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

Capital On Tap Business Rewards Visa

10,500 points bonus – the most generous Avios Visa for a limited company 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 (77)

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

  • Roger says:

    I was skeptical about this card a couple of days agao until someone posted about this bonus then got excited but after reading Rob’s post I am back to being a skeptical.

    HSBC premier that is then.
    Does anyone know if the investments can be for stocks and shares account?

    • Jumble says:

      Yes, they can. Can be a one off investment of £100 (the minimum) in just one fund of you want.

      • Dannyrado says:

        From what I can see, it clearly states £50k on the t&cs?? Are they not enforcing that?

        • Polly says:

          They give you a lead in time of three months to transfer in the 50k or if a high earner to buy a home insurance policy or something similar. If you dip below the minimum, they give you time to bring it back up. Doesn’t even have to be an ISA invest or anything that big. We are using it quite successfully, in lieu of the plat card, as we don’t need the guest aspect of the priority pass. But we will see after the first year, when this supposed avios bonus appears in the account.
          If the uptake on the newTesco card is low, they may bring in a bigger bonus. Then we would get one for my OH, and just cancel out mine. No referral bonus l know. But you never know what they might bring in.
          Very sad about the end of gift cards tomorrow tho! Well stocked up now in advance….

  • Frenske says:

    One thought. Tesco accepts Amex. I would normally struggle to reach minimum Amex spend (£2000p3m) to get the bonus if cannot use it at Tesco. That means I would struggle to get 5000 bonus.

  • Mycity says:

    I’ve looked at this card a few times recently, I now view that for me it’s not worth it. I spend around £5000 per annum at Tesco however we use our BA cards which earn 1.5 Avios as well per £1, factor the loss of 7500Avios there and I can’t see the benefit to be honest.

    • Mr(s) Entitled says:

      But if you churn the BA cards the maths changes? In this instance you are earning Avios from Tesco on a consistent basis and picking up big chunks from BA every 6mths for very little effort.

      The article doesn’t expressly say so but I am a buyer of this card because I value clubcard points higher than avios.

      I have a good store of Avios which I rarely deplete due to the existence of cash offers elsewhere, the BA hard product, and my alternatives out of MAN for which the gate is just 30mins from my door.

      Clubcard I get to use instead of cash on a number of items that I require from Tesco and I still find value from Boost. One good example is Eurotunnel at 3x. Again, a service I use and thus a genuine saving.

      Maybe if I head over to ShopperPoints I may find a different conclusion to the same analysis.

      • Mycity says:

        Some good points there, I could churn my wives BA card, however it’s hard to justify churning mine as I’m on the grandfathered rate of £30 a year to renew ( which I know may change)

      • mark2 says:

        Exactly. Each of us has to weigh up what we are trying to achieve, how much we spend and where etc. and come to a decision which may or may not turn out to be the best in retrospect.

  • Genghis says:

    Good analysis, Raffles.

    One question which may be an unknown. “Whilst currency purchases made using the card at Tesco Travel Money are treated as purchases and not cash advances, they do NOT earn Clubcard points.” But do they count towards the £5k target spend at Tesco?

  • tall trader says:

    I would not get involved, there is a big risk tesco will go bust soon

    • Mr(s) Entitled says:

      Insightful analysis. What’s their current CDS?

    • Mycity says:

      Please tell us what you base your comments on

      • Genghis says:

        My thoughts exactly. Now I’m not going to do any complex analysis myself but recently in the FT out of 24 equity analysts, none had Tesco as a ‘sell’ position, down from two a year ago. A decent indicator that Tesco is a viable business, no?

    • CV3V says:

      think you posted on the wrong website, this kind of quality post is usually done on lse.co.uk

  • Ian says:

    It is a big no from me.

    Using my Santander 123 credit card I already get a good discount from supermarkets and fuel so little point in using another card as any cost has to pay back this discount as well.

    I won’t even use my Amex in there for the same reason.

    If you do not have a Santander 123 card, then surely it is much better to use an Amex and get Avios that way

  • Jim McCord says:

    Can I use the new Tesco Premium Card with Curve abroad, get points and only pay 1%.

    • TGLoyalty says:

      Yep but 1 clubcard per £4

      • Jim McCord says:

        Great. It looks the best out there!

        • Mr Dee says:

          At a return of 0.6%, an annual fee and a 1% charge from Curve there are better cards to be used for purchases even the Lloyds Avios Mastercard would be better at 0.33% than using Curve for transactions abroad. For withdrawals Curve is an option if you don’t have other options.

    • Genghis says:

      Yes but the 1% spread on Curve you’re paying away is greater than the 0.6 avios = 0.6% (at 1ppa) you’re getting. I’m such cases you’d be better off with a Halifax Clarity and remain flat. Or link Curve to a higher earning card (Virgin Black or IHG Platinum) at circa 1% return

  • TGLoyalty says:

    When there was a gift card offer £5k might have been easy but without it I would struggle to hit £1k a year with the occasional shop and fuel

    Guess I’ll wait and see what happens with GC long term

    • Genghis says:

      That’s exactly my thinking. We perhaps spend £2-3k on groceries in Tesco, perhaps £1k at Tesco Direct so the gift cards would be a key deciding factor in getting this card.

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