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Get a £50 gift card with the £150 Tesco Premium Credit Card – worth it?

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Back in June 2016, Tesco launched the Tesco Premium Credit Card.

You can check out the details here.  The representative APR is 56.5% variable, including the £150 fee, assuming a £1200 credit limit.

Tesco Premium Credit Card £50

In my experience, HfP readers tend to run hot or cold when looking at the benefits of this card compared with the £150 annual fee.  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 31st August, Tesco Bank is offering a £50 Tesco gift card for signing up – this takes the net cost for Year 1 down to £100

Changes to other travel Visa and Mastercard products, such as the closure of the bmi cards, has left a lot of people without a decent Visa or Mastercard product for earning Avios or other miles

With this new offer, you are paying £100 (after knocking off the £50 gift card) to receive a decent Avios or Virgin Flying Club earning rate plus 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 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 (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.

Don’t forget, though, that the free Tesco debit card which comes with the Tesco Bank current account also now gives 1 Clubcard point per £1 spent in Tesco.  This means that the points advantage over the debit card is only the 5,000 Clubcard points (12,000 Avios) annual bonus per year.

Comprehensive travel insurance

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.

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.  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

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.

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.

The free Tesco Clubcard Mastercard has an earning rate of half this (0.3 Avios per £1 based on one Clubcard point per £8 spent) but you are not paying an annual fee.  The Lloyds Avios Rewards Mastercard earns only 0.25 Avios 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 which you may value the same as 0.6 Avios.

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.  These are decent options for high spenders.

Conclusion

As I said initially, there is no easy answer here.  This new deal offering a £50 gift card 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

All in all, the card compares poorly with the new HSBC Premier World Elite Mastercard.   Your £195 fee currently gets you 45,000 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.  If you can justify the fee because of the benefits – mainly the travel insurance – the Tesco Premium Credit Card may be worth a look.  The application form is here.

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:

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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

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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.

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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.

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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 (46)

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

  • Frenske says:
    21 Jun21 June 05:38

    Waitrose keeps me sending decent money off vouchers, whereas Tesco completely stop doing this. No way me and my little family with an efficient car can spend £5000 in Tesco. Now I earn Virgin miles at Waitrose it is even better.

    PS Tesco accepts Amex.

    • Arul says:
      21 Jun21 June 07:59

      Can we not consider buying a visa gift card (cash card) from tesco and spend it elsewhere and still hit the target spend?

      • Genghis says:
        21 Jun21 June 08:41

        You can consider it but with c.8% wastage I wouldn’t bother

        • Will Squires says:
          21 Jun21 June 11:42

          Not worth it as a Visa but if you do your food shopping at M&S or Waitrose then buying gift cards for these retailers from Tesco with your Premium Credit Card or Current Account Debit Card is a half-decent option.

          • Genghis says:
            21 Jun21 June 11:51

            Perhaps. But for me shopping at M&S (not trying to get an Amex sign up bonus so for ongoing spend), I’d lose out on 4% return (3% Curve Black and 1% IHG) for an option to buy avios at 0.83p and having to faff around trying to find M&S gift cards.

    • Andrew says:
      21 Jun21 June 14:28

      Still getting money off them all.

      This month’s collection:-

      4x £8 off £40 at Waitrose
      4x £7 off £50 at Tesco
      3x £4 off £20 at Sainsbury
      2x £5 off £30 at Lidl
      2x £5 off £25 at M&S

      • Genghis says:
        21 Jun21 June 14:40

        What’s your secret? My wife gets them for Tesco in waves but I don’t.

        • RussellH says:
          21 Jun21 June 15:43

          Both Tesco and Sainsbury’s vouchers turn up here every month or so, completely unsolicted and never used as the spend sums involved are far too high for us to consider them. My partner was appalled when our three bags of shopping at Tesco last Sunday came to £13.90 – she had only spent around £4.50 the previous week She calmed down a bit when I pointed out that £3 was for a Sunday paper and almost the same amount on decent breadmaking flour. And our local Tesco has no filling station – no point as both Asda and Morrisons have them.

        • Andrew says:
          21 Jun21 June 15:55

          I have a fantastic canteen at work and enjoy a freshly cooked main meal there every weekday at lunchtime.

          Everything else is top-up shopping, or a occasional large store-cupboard cleaning & freezer re-stock and food for the weekend.

          So Waitrose, M&S, Tesco and Sainsbury all analyse their customer data and see small top-ups and think I’m doing mine main grocery shop somewhere else.

          There’s a new Aldi nearby, so Lidl put vouchers through the doors to entice people to remain with them.

          • Fenny says:
            21 Jun21 June 20:01

            Doesn’t work that way for me. My Waitrose vouchers have gone from 4 x £8 off £40 to 4 x £5 off £50. I spend a few quid in there every day and get my free coffee. Every few weeks I may spend £25 or so.

  • Genghis says:
    21 Jun21 June 06:10

    Good points but I think you came to the wrong conclusion, “If you spend £5,000 per year in Tesco, get the card – you will do well with it”. On a points only basis over the Tesco debit card, you’re essentially paying £100 to buy avios at say 0.83p and commit to £5k Tesco expenditure – not exactly a great deal. Whilst 0.6 avios /£ for non Tesco spend (assuming shopping in multiples of £8) isn’t bad, not as good as say the IHG black for non-Amex spend and in reality the average earnings will be significantly lower.

    • Mr(s) Entitled says:
      21 Jun21 June 07:47

      Does the tesco debit earn points for non-tesco spend? The article doesn’t stipulate and this may widen the gap to some extent but I agree, seems like Tesco debit is the way to go unless you spend £5 and value the travel insurance, or require a credit line.

      Incidentally, IIRC when Tesco got rid of clubcard boost they talked about enhancements to come. Did anything ever happen to compensate for this loss? Boost was of real value to me and would have made the credit card an easy choice.

    • Go says:
      21 Jun21 June 08:13

      I agree with what you say, but I’ve avoided the debit card/bank account as I felt it was a hassle to maintain a balance in a Tesco current account just to use the card in Tesco. At least with the stand alone credit card I can earn 16,500 more than BA Amex for £5000 Tesco spend. If £2000 of the spend was on petrol that would give me an extra 1000 clubcard points so overall an extra 18,900. At £100 net of the gift card that’s just over 0.5p per point

      • Genghis says:
        21 Jun21 June 08:42

        Earning 3% interest on £3k and setting up two DDs one to each of the Tesco saving products for £1 pcm and another small DD ain’t too much of a hardship

        • Will Squires says:
          21 Jun21 June 08:48

          Tesco Bank Savings Account DDs are excluded from the 3 DDs needed. Post Office Savings gives you a way to achieve one of the three though.

          • Genghis says:
            21 Jun21 June 08:53

            Just checked and that’s new. I’m still getting interest

          • Liz says:
            21 Jun21 June 08:59

            It changed when they relaunched the account after the stampede for the account earlier in the year.

          • JamesB says:
            21 Jun21 June 11:26

            @Genghis, only applied with the relaunched account I believe. They probably had too many folks saving £1/month in three new savings accounts after initial launch.

          • JamesB says:
            21 Jun21 June 11:28

            @Liz, oops sorry, too much coffee this moning.

        • RTS says:
          21 Jun21 June 11:22

          How do you actualyl set up DDs from one bank to another? I thought they were classes as S/O?

          • Will Squires says:
            21 Jun21 June 11:40

            Some savings products allow you to debit using a fixed or flexible DD. Post Office Online Saver and Tesco Bank Savings are the two most prevalent ones.

          • Genghis says:
            21 Jun21 June 11:42

            Normally, yes, but Tesco allows you to set up DDs to their savings accounts. Done on the Tesco bank website.

  • Mr Dee says:
    21 Jun21 June 08:02

    This card seems like a plot to commit people to spending money at Tesco, apart from the people who are already spending this amount at Tesco I don’t think it is very good at all.

    If it was just a plain 5k spend on the card then I would consider taking it but 5k at Tesco, not for me, will stick with the IHG black.

    • Fenny says:
      21 Jun21 June 13:15

      Same here. My Virgin Black, especially linked to Waitrose spend, is doing well enough for me. I doubt if I’ve spent £50 on Tesco groceries this year, although I may have spent £150-200 on Direct items where there were CC offers and possibly £75 on Tesco petrol Even buying Waitrose / JL gift cards wouldn’t get me near the £5k Tesco spend.

  • Liz says:
    21 Jun21 June 08:53

    Gift card purchases count towards the £5k spend and earn you the Clubcard points for the credit card spent part but not on Clubcard. So £100 of gift cards will get you 100 CC pts. I’ve boosted my spend target by buying a few cards over the past few months so it makes it easier to hit the target spend.

    • Stas says:
      21 Jun21 June 11:02

      This approach worked very well with Amazon gift cards, however, I do not see them anymore in my local Tesco. As for other gift cards – you can buy most of them from Zeek at around 10% discount, so it is difficult to justify buying at nominal value from Tesco, even if you take CC pts into account. Having said that, it makes perfect sense to buy gift cards if you are approaching the 12 month deadline and you are a couple of hundred pounds short of £5000 spending target.

  • Lumma says:
    21 Jun21 June 10:56

    OT but has anyone had some random points posted to their BA exec accounts from Marriott? Im guessing it’s from signing up to Marriott rewards, but only one member of my household account has got anything, which is two lots of 3332 points.

    • JamesB says:
      21 Jun21 June 11:18

      Very promising, perhaps Christmas will come early this year 🙂

  • Chris says:
    21 Jun21 June 11:09

    Another OT – how long do the following stages take, on average folks? Looking to trigger a 241 on my BAPP:

    1) How long do transactions that have appeared on the posted transaction list (as in under transactions, after moving down from Pending) take to appear on the spend-this-year towards the 10k target?
    2) Once that’s hit, how long before the 241 hits the BAEC account?

    • Genghis says:
      21 Jun21 June 11:45

      1) A few days
      2) It depends. We’ve had anything from a few days to about two weeks (most recent one)

      • Chris says:
        21 Jun21 June 11:59

        Ace, thanks. Need to just get 8k spent today then and hold my breath

  • JamesB says:
    21 Jun21 June 11:14

    OT but credit card: amex online accounts now have a new ‘spending power’ tool which can be used to check in advance if a transaction will be approved, and apparently preauthorise it. This might be useful for preventing red flags or declines on large purchases. It does not merely work with available credit on credit cards because I tried it out on a charge card.

    • Genghis says:
      21 Jun21 June 11:47

      That’s been around for quite a while now, at least since my last churn.

      • JamesB says:
        21 Jun21 June 12:14

        Oh well, that redeems you after your OT yesterday 🙂 First time I noticed it.

        • Genghis says:
          21 Jun21 June 12:47

          🙂

          • Lawro says:
            21 Jun21 June 12:58

            Also interesting is the new ‘chat’ feature which I used for the first time last week. Useful when you don’t really have the time for a phone call but would like a response quicker than the 24-48 hour secure message turnaround time.

  • mike says:
    21 Jun21 June 14:00

    (semi-OT) Advice welcome: I have a £18,000 spend coming up, which I can charge to Visa/MC at no fee, or Amex with 1.4% fee. I think I can also split across multiple cards.

    Already have Amex Plat, free Tesco Mastercard, free BA Amex card (pending 241 burn). I have a stack of Avios and Virgin miles, also SPG and Hilton miles are useful to me. The Tesco Premium MC doesn’t seem worth the fee, given my spend in Tesco is low (PE upgrade vouchers, a companion seat, and another 10000 miles.

    2) £750-1000 on either Hilton card to get free night / SPG Amex to get 10000 SPG points/Avois

    3) balance of ~£7000 on existing Tesco MC = 2100 Avios

    I can’t think of any other good options?

    • mike says:
      21 Jun21 June 14:01

      missing is option 1, Virgin Black card = spend on visa for 10k miles + 25k signup bonus for 140 annual fee. Or spend on Amex for additional 140 fee for 2 x E>PE upgrades plus (?) a companion ticket.

      • Genghis says:
        21 Jun21 June 14:09

        As with all of these things, it depends. Do you spend a lot of money anyway that you would exhaust most decent sign up earning opportunities and thereby would turn to regular spend (in which case spending 1.4% to spend on an Amex card probably isn’t worth it over a decent Visa / MC option).

        You’ve not mentioned whether you have a partner for his n’ hers cards? What are your travel goals?

        You need to get the right balance between getting a decent return and applying for too many cards in a short space of time.

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