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Is the Tesco Premium Card – the most generous Avios Visa / Mastercard – worth £150?

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It is now coming up to a year since Tesco Bank surprised us with the Tesco Premium Credit Card and its suitably premium £150 annual fee.

This is the most generous way of earning Avios from a Visa or Mastercard which is widely available.  The only better option is HSBC Premier World Elite but this has very strict wealth criteria.

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

Frustratingly, Tesco has created a product which could work well for a few people but not for the majority.  My general impression is that most people should give it a miss in its current incarnation but, if you are lucky, it may make some sense.

Is it worth a £150 annual fee?  Let’s take a look at the benefits in turn:

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

Let’s imagine that you DO spend exactly £5,000 per year in Tesco.  This may be possible if you do all of your grocery shopping there and have a large household or always buy your fuel there.

On that basis, you would earn 8,750 more Clubcard points (21,000 Avios) 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.

That comparison is no longer the best one to use, though.  The Tesco Bank debit card now also gives 1 Clubcard point per £1 spent in Tesco, so we really should be comparing this credit card with that.  As the earning rate is the same, the only extra benefit for your £150 fee is the 5,000 Clubcard points (12,000 Avios) bonus for spending £5,000 in Tesco.

I can recommend this card if you easily spend £5,000 per year in Tesco purely because of these 5,000 extra Clubcard points.  That would get you 12,000 Avios or 12,500 Virgin Flying Club miles which justifies most of 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.

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 £110 per person for global cover.

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

1% enhanced exchange rate when you buy travel money

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 (Curve can be a better deal despite the 1% fee as you earn points on your linked card).  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.

What I don’t know is a) whether currency purchases are treated as a ‘purchase’ if charged to the credit card or b) if so, whether it counts towards the £5,000 to trigger the 5,000 Clubcard points bonus.  If the answer to these questions was ‘yes’ then it would improve the offer.

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.  Excluding the HSBC Premier World Elite card – which is tricky to get – this is the highest earning Avios rate for a Visa or Mastercard.

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.

However ….. I would value 0.6 Avios at 0.6p at best.  The Hilton Honors Visa (which is free) earns 2 Hilton HHonors points per £1 spent which I would value at 0.7p.  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.

Conclusion

In the year since it was launched, this card has actually got worse and not better.  It originally offered a discount voucher on British Airways Club Europe flights, now scrapped.

When Tesco sharply increased the Clubcard earning rate on the Tesco Bank debit card last month to 1 point per £1 in Tesco, it made the Tesco Premium card – which now has the same rate but charges a high fee – look worse by comparison.

As I said initially, there is no easy answer as to whether the Tesco Premium Credit Card works for you.

If you spend £5,000 per year in Tesco, the annual bonus of 5,000 Clubcard points (12,000 Avios) almost offsets the fee

If you buy stand-alone travel insurance, the policy offered by this card may be good enough to replace it

If you have substantial Visa or Mastercard spend outside Tesco, earning 0.6 Avios per £1 is not a bad deal given the competition

We then come to the sticky question of a sign-up bonus.  There isn’t one.  Tesco Bank offered 5,000 Clubcard points for a period last year.  This means you need to ask:

Even if the card would work for me, should I sit it out until Tesco throws in a few thousand Clubcard points for getting it?

All in all, the card compares poorly with the 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? – April 2024 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.

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

40,000 bonus points and a huge range of valuable benefits – for a fee Read our full review

Virgin Atlantic Reward+ Mastercard

18,000 bonus points 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:

SPECIAL OFFER: Until 12th May 2024, the Capital on Tap Business Rewards Visa card is offering a bonus of 30,000 points, convertible into 30,000 Avios. You must have a Limited Company to apply. Click here to learn more and click here to apply.

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

American Express Business Platinum

40,000 points sign-up bonus and an annual £200 Amex Travel credit Read our full review

American Express Business Gold

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Capital on Tap Business Rewards Visa

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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 Business Credit Card

1% cashback uncapped* on all your business spending (T&C apply) Read our full review

Category

British Airways and Avios, Tesco Clubcard, Virgin Atlantic and Flying Club

Comments (36)

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

  • John says:
    23 Apr23 April 05:43

    Buying 12000 avios at 1.25p and having to deal with Tesco Bank any more than necessary seems like an awful deal. Tesco Bank is only useful for DDs to earn 3-5% interest on my current account balances, and the rare occasion when only debit cards can be used for a large purchase.

    • Genghis says:
      23 Apr23 April 06:04

      Completely agree. Interested to hear why Rob recommends buying avios at 1.25p on the proviso of locking into £5k of Tesco spend pa. Not a good deal.

      • Genghis says:
        23 Apr23 April 07:39

        The ‘math’ looks right but even at that price locks you into £5k Tesco spend. Buying some Iberia / Groupon avios would be better, no? Although some might place value on the insurance. I don’t so couldn’t really justify the card

        • the real harry1 says:
          23 Apr23 April 07:59

          well, the premise is that you’re not diverting spend to Tesco, you’re a Tesco regular & would spend the £5000 there anyway

          doesn’t apply to me, so I’m out!

      • Rob says:
        23 Apr23 April 09:50

        I’m not – what I’m saying is that you are basically getting a ‘0.6 Avios per £1’ credit card for (nearly) free IF you know you will trigger the 12,000 Avios bonus.

  • rams1981 says:
    23 Apr23 April 06:06

    OT supercard. Am in Vietnam and it’s working well. The only weird thing relates to the pin. Not sure if anyone will remember but i had thought I had changed the pin when I received the card which supercard doesn’t allow. It did not update in the app however. My first few transactions went through with the changed pin. After that on my next trip though only the supplied original pin (in app) worked. And that was the case for my next few trips. Until I tried it today and it rejected the pin twice. I thought of trying my chosen pin as the last go and it worked. Utterly bizarre.

    • John says:
      23 Apr23 April 15:04

      Here’s my theory which someone who works in this industry might blow to shreds:

      PINs can be stored on the card and on the bank’s computers. If they aren’t on the card, then you couldn’t BOB on BA. If they aren’t on the bank’s computers, then you couldn’t get your PIN via online banking.

      Maybe you changed your PIN on the card, but it wasn’t allowed to be changed on the bank’s computers. If the ATM or POS is online, then it checks the ‘app PIN’, but if it is offline, it can only go with the ‘card PIN’

      • Alan says:
        23 Apr23 April 15:16

        Interesting theory, John. I definitely agree re on-chip PIN (as that’s how the RBS/NatWest/Nationwide card reader checks you have authenticated) and as you say it is clearly known to the online system as well. I had exactly the same issue with a PIN code not being recognised at some readers then being recognised fine at other and wonder if the offline/online side of things comes to play. It’s only Supercard I’ve noticed this with.

      • RussellH says:
        23 Apr23 April 18:06

        Certainly sounds plausible, though surely this is a situation that should not be allowed to arise.

        It was only recently that I read that a lot of large shops now just have their systems check the on-card PIN rather than connecting to the bank’s systems – it is easy to tell since you get authorisation almost immediately after pressing the button.

        But I had assumed that the system would check that the card PIN and the bank’s copy of the PIN would be checked for a match. Sounds like another security flaw in Chip + PIN implementation, though I am by no means an expert.

  • Jeff says:
    23 Apr23 April 07:34

    I think you are missing the extra Clubcard point for using the card in Tesco that you get using the premium card (as opposed to the debit card or 1/2 point on free credit card).

    So, if in your scenario you spend £5,000 you get the 1 point that you get however you pay + 1 point for Premium card + the 5,000 bonus at the end of the year = 3 points in total. Even at the 600 Avios / 250 Clubcard points rate, this would give you a total of 7.2 Avios per £1 spent (in Tesco) which makes the £150 worthwhile. At the grandfathered rate it is 9.6.

    Unfortunately it isn’t that hard to spend £5,000 there!

    • Genghis says:
      23 Apr23 April 07:42

      Easier to look just at deltas when comparing. The point regardless of how you pay doesn’t add much to the comparison

    • TGLoyalty says:
      23 Apr23 April 11:31

      As Genghis says the 1 point is there regardless so you shouldn’t factor that in.

      Personally the Tesco Debit is now my card of choice in Tesco, it’s not actually that bad when you have to pay via debit card too 1cc for every £8 better than the nothing I was getting before.

  • SB says:
    23 Apr23 April 08:05

    Need to look at your conversion rate as well as the accrual rate, as the latter will enhance the value of the card.

    For some reason I convert at 3.2 not 2.4 (CCP into Avios).

    For me 8,750 CCPs is 28,000 Avios not 21,000.

    • the real harry1 says:
      23 Apr23 April 08:25

      you have the grandfathered rate, lucky 🙂

      800 Avios per 250 clubcard points (better than our 600)

      • RussellH says:
        23 Apr23 April 17:57

        The grandfathered rate does seem to be very hard-wired into the Tesco system somewhere. I have always got 800 Avios per 250 clubcard points transferring to our avios a/c. I recently tried a small test transfer to my BA Exec Club a/c (first ever transfer) and was delighted to get 800 avios here too.

  • Barry cutters says:
    23 Apr23 April 09:58

    OT- which is better Kensington CP , or indigo Kensington.
    Will be staying on points. Need three nights as Iv just won Wimbledon tickets in the ballot 🙂

    • Brian says:
      23 Apr23 April 13:46

      If you have status (Platinum or Spire), there is a good chance that you’ll be upgraded and get lounge access at the CP. Otherwise, I’d personally go for the Indigo since I prefer it (and the brand in general). Both are very convenient for the tube, of course, so not much in it as far as location is concerned.

  • Rob says:
    23 Apr23 April 12:22

    Slight OT; I have the HSBC World Elite and have spent over £12k on it. The first 40k rewards points posted around a few weeks after the £2k spend, however, it has been over 6 weeks since I hit the £12k – has anyone had the second 40k reward points post?

    • WEIJing says:
      23 Apr23 April 12:35

      I did the same. HSBC told me that the second 40K points will be added on the card anniversary date regardless if you hit the £12K spending much earlier.

      • Rob says:
        23 Apr23 April 12:53

        Thanks, would this mean one would have to take the card out for another year then to be eligible for the second 40k then? I was going to cancel just before the 12 month anniversary date. Below the T&C’s:

        First Anniversary Bonus Reward Points
        1. To be eligible for the First Anniversary Bonus Reward Points described below, the following requirements must be met:
        a. you must successfully apply for an HSBC Premier World Elite MasterCard Credit Card;
        b. you must not have not held an HSBC Premier World Elite MasterCard Credit Card within the six months prior to you applying; and
        c. You have made eligible purchases of at least £12,000 within the first 12-month period of card membership;
        2. The following items do not count as Eligible purchases: interest, fees, late payment
        charges or any other charges added to your statement; Cardholder Repayment Protector insurance premiums charged to your account; cash advances including foreign money and travellers cheque purchases; any balances from other credit or charge cards which are transferred to your card; ATM withdrawals and gambling transactions.
        3. If you meet the requirements for this offer as described above, we will award 40,000 Premier Reward Points to your HSBC Premier World Elite MasterCard Credit Card within 60 days from point of qualification
        4. We may withdraw this offer without notice. Any applications received before the offer is withdrawn will be eligible to qualify for this offer.
        5. The offer is only applicable at account level. If additional cardholders are added to the account, they will not be eligible to qualify for the offer.
        6. This offer is not transferrable.
        7. We may refuse any application for a product or service.

        • Js says:
          23 Apr23 April 12:58

          Put a formal complaint in. You will get the points as per the T&Cs as well as a £50 goodwill gesture.

    • Polly says:
      23 Apr23 April 14:40

      Rob, my second 40k points posted a few weeks well after l had hit the 12k spend. I think about 3/12 after l hit the target spend. I just noticed it on my statement quite by chance. Was expecting a battle at the end of 12 months. Rob said we would have to challenge it if we were charged a new fee if no spend on the card, before we got the 13 mth statement. So they may post anytime before your 12 mths are up. I phoned them when that bonus to baec was on, butntheybrefused to add the extra 40k then, even tho lead hit the spend. They insisted it would go on until the end of the 12 mths. So they are variable in their plans somewhat.
      Wonder if they will try to get us to stay on another year bribe us with a fee refund again? Some chance!

  • Brian says:
    23 Apr23 April 13:47

    Slightly off-topic – just got an email from BAEC about in-store purchases – register your credit card and get Avios, rather like Avios and Virgin already have. Seems to be some overlap (but not Waitrose, I don’t think!), so not sure whether you can double-dip!

  • RussellH says:
    23 Apr23 April 18:11

    About the most uninteresting set of offers I could imagine! I do not think I have crossed the threshold of any of those except Cafe Nero (and that was two years ago +) and there are several I have not even heard of. Perhaps I am showing my age!

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