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.

  • MR Bridge says:

    another benefit that has been missed in the article is: on fuel, instead of 1 cc per £2 spent, you get 1cc per £1 spent, NB you only get this when using the credit card as clubcard, not if you use a separate clubcard.

    with the 5k bonus, this is 3cc per £1 = 7.2 avios per £1 on fuel..best avios on fuel?

    • TGLoyalty says:

      I thought that was a quirk of the older one. Could swing the dial towards a full tank at Tesco every week rather than occasionally.

      Then this would make far more sense

      Anyone know if they allow supplementary card holders?

      • MR Bridge says:

        yes to sup cards, plus if you can make use of the club europe voucher, if you order the sup card after the main card, the sup card holder also gets a voucher

      • Will Squires says:

        It works with the Current Account debit card, surely it works with this too?

  • Roger says:

    No, you cannot earn bonus or standard CC points on buying Tesco’s own GCs.
    You only get it when spending it. So you cannot add your last bit of extra Avios.

  • Genghis says:

    Tesco branded gift cards do not earn cc points when purchased.

    • Alan says:

      Indeed, I think they just see them as a form of payment – you then earn the Clubcard points when you use them in store for purchases.

  • Jason says:

    Can you get a secondary card on Hsbc for free to get lounge access ?

    • Jonathan says:

      Appears so but with a fee:

      Additional cardholders will receive unlimited airport lounge access for an annual fee of £60.

  • Alex W says:

    OT. I may be selling a house with a couple of months before buying a new one. During this period would I be able to get a HSBC premier aaccount & CC?

    • Rob says:

      Tricky if there is no way of verifying your current address, which there wouldn’t be.

      • Alex W says:

        I am not living in the house I will be selling so I don’t think that would be an issue.

        • Roger says:

          There is also £150 + £50 switching incentive from HSBC, but you should not have held any HSBC current account in previous 12 months.

          If you qualify and apply for HSBC premier credit card this switching incentive will cover the premium card fees.

          • Roger says:

            To rephrase the incentive is for the HSBC premier current account.
            Once you have Current Account and then apply for Premier CC you can cover the first year’s fees.

  • Heather says:

    I am struggling with what to do now Diamond Club is no more. No offer from them so I cancelled the card. I use my BA card everywhere I can, but Aldi do not take Amex.

    For now i have returned all non Amex shopping to my Nationwide CC, whilst a nice bonus from Virgin comes along. Can anyone suggest anything else?

    I have the fee paying Ba Amex and I have to spend £5000 before April to get my 2 for 1.

  • Mr Dee says:

    As the Tesco gift cards can be used to buy gift cards they don’t award points on their own cards.

    • Genghis says:

      I’m not exactly sure that that is the reason. I don’t believe F&F gift cards can be used to buy other gift cards yet you don’t earn cc points on them?

  • Genghis says:

    Yes. Your math(s) look about right. Bear in mind though that you would get the 1 club card point per £ in Tesco regardless of what card you use. I find it much better just to look at the delta.

    • Sue says:

      Thanks…”you would get the 1 club card point per £ in Tesco regardless of what card you use. I find it much better just to look at the delta.” Sorry not sure what that means?

      • Alan says:

        Delta in maths refers to the difference or a change – Genghis is meaning that as you get the 1 Clubcard per GBP as standard (regardless of payment method) he wouldn’t factor it into the calculation and would only be looking at what difference using the Tesco Credit Card made

        • Sue says:

          So does this mean I could payin Tesco with my Amex and swipe the Tesco CC for the points? Surely this would mean that I technically wouldnt be “spending” my £5000 on the Tesco CC to meet the minimum £5000 for the bonus? Sorry to be such a numbskull!

          • Alan says:

            No, it wouldn’t count as spend on the card. The main use of this to date has been at Tesco petrol stations where using the Tesco credit card as a Clubcard (which the assistants are used to) gives higher earnings.

            Overall I don’t spend anything near £5k/year with Tesco (as long as you exclude gift cards!), even though they’re the main supermarket I shop at!

        • Genghis says:

          Thanks Alan

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

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