Credit & Charge Card Reviews (15): Tesco Premium Mastercard

This is my review of the Tesco Premium Mastercard credit card.

It is part of my series of articles looking at the major UK loyalty credit cards and discussing whether or not they are worth applying for.  These articles will be linked to the relevant sections of the ‘Credit Cards Update‘ page.

My other UK airline and hotel credit card reviews can be found here.

If you want to check your credit record before applying for a new card, click here to get your free Equifax credit report and score.  Your first 30 days are free then it’s £14.95 per month. You can cancel at anytime.

Please note that this card is not suitable for you if you do not pay off your balance every month, due to the high interest rate.  You are better off with a low interest rate card such as – click for details – the AA Low Rate Credit Card which has an APR of 6.5%.

(EDIT:  This article was updated on 27th December 2017 and is correct as of that date.)

Key link:  Tesco Premium Mastercard application form

Key facts:  £150

The representative APR is 56.5% variable, including the annual fee, based on a notional £1200 credit limit.

As with all rewards cards, this is not a suitable product for you if you do not clear your balance in full every month.  You should focus on a credit card with a low interest rate such as the Tesco Clubcard Mastercard Low Rate card. This has a very attractive representative APR of 5.9% variable.

About the card

The Tesco Premium Mastercard is issued by Tesco Bank, which is now wholly owned by Tesco following its acquisition of Royal Bank of Scotland’s stake a few years ago.

Tesco Premium MasterCard credit card review

What is the sign-up bonus?

There is no sign-up bonus.

Any other benefits?

Yes.  A long list of them.  The key issue is what value, if any, you place on them as this will decide whether this card is for you.

Benefit:  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 with Tesco during your card year

This card would pay you 2.4 Avios points or 2.5 Virgin Flying Club miles (or 3p of Uber credit) for 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. The free card gives 1 point for every £4 you spend in Tesco and has no annual bonus.

I recommend this card if you easily spend £5,000 per year in Tesco purely because of these 8,750 extra Clubcard points.  That would get you 21,000 Avios or 21,875 Virgin Flying Club miles which justifies the fee (or £262.50 of, say, Uber credit if you redeem for a ‘3 x face value’ Clubcard Boost deal).

Benefit:  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.

Benefits:  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.  Note that you do NOT earn Clubcard points when you use your credit card to buy travel money, even though it goes through your statement as a purchase.

What do I earn per £1 spent on the card?

You earn 1 Clubcard point for every £4 spent on the card on a ‘per transaction’ basis.

It is important that potential applicants understand what this means. At the most extreme, if you bought 100 items at £3.99 in separate transactions, you would earn zero Clubcard points. A £7.99 transaction would only earn one point.

One Clubcard point is worth 2.4 Avios or 2.5 Virgin Flying Club miles, so every £1 spent on the card gets you up to 0.6 Avios or 0.625 Virgin miles.

In Tesco stores, the earning rate increases to 1 Clubcard point per £1 spent.

You will receive a statement once a quarter containing your Clubcard vouchers, and you can convert these online to Avios or Virgin or redeem them for any of Tesco’s other ‘Clubcard Boost’ deals. You can even spend the vouchers in-store at Tesco at their face value, although this is a poor use of them.

Tesco used to run fairly regular transfer bonuses with Avios but they have been very rare in recent years.  There are regular transfer bonuses of 10% to 20% into Virgin Flying Club.

Any other quirks?

Yes.  Your credit card doubles up as a standard Tesco Clubcard.

It is perfectly acceptable to hand over your Tesco credit card in a Tesco store and ask them to swipe it as a Clubcard.  You can then pay for your shopping on a more lucrative credit card!

What is an Avios point worth?

This post outlines my view of what an Avios point is worth based on your typical redemption patterns.

One key benefit of Tesco Clubcard points is that you do not have to convert to Avios.  Unlike dedicated airline credit cards, you have the option to convert to Avios or Virgin miles, but there is also the flexibility to use them for any other good Tesco deals that come along.  I have used vouchers to pay a regular Safestore bill …. and currently convert them to Uber at 3 x face value.

How does this compare to a cashback credit card?

The Tesco Premium Mastercard is, for the 90% of readers who cannot get HSBC Premier, the most generous Visa or MasterCard option for earning Avios.

However, paying £150 per year for a card earning 0.6 Avios per £1 is only marginally better than having a free card, such as the the ASDA Cashback Credit Card which is free for life and offers 0.5% cashback.  The representative APR on that card is 19.9% variable.

To get full value from the Tesco Premium card, you need to either:

  • get £150 of value from the travel insurance it provides, or
  • spend £5,000 per year on the card in Tesco, including fuel, in order to trigger the 5,000 bonus Clubcard points

Conclusion

Assuming you convert your Clubcard vouchers to Avios points, the earning rate of 0.6 Avios points per £1 is OK.  This does not justify the £150 annual fee on its own.

The real driver of whether you get the card should be whether you spend £5,000 per year in Tesco or not.  If you do, the 5000 bonus Clubcard points are a decent annual bonus.  If you would also use the travel insurance provided with the card, the package becomes interesting.

The application form for the Tesco Premium Mastercard can be found here.

(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.)

Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history. By recommending credit cards on this site, I am – technically – acting as a credit broker.  Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.

ENDS FRIDAY: Bargains in the great Qatar sale (eg Oz business £1330) and new solo traveller discounts
ALL MBNA airline credit cards withdrawn - what are your alternatives?
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Comments

  1. Simon Schus says:

    Early off topic about MBNA card closures:

    If the Virgn Atlantif cards are beIng moved to Virgin Money, do you think one should cancel the card now in order to access a sign up bonus when they are relaunched? I have no money going through that card as I’m focusing efforts in other cards.

    • Genghis says:

      Separate issuers. You’ll get a bonus anyway (like when Creation relaunched the IHG card). If you have the white card, perhaps cancel it as nothing to lose. If black, keep it as you should get a fee refund.

    • You will get a new bonus anyway (unless, possibly, you have other Virgin Money credit cards).

      • Simon Schus says:

        Easy peasy!

        I’ll wait to see what MBNA card they want to convert me to- and if there is any opportunity there for decent warning or not.

  2. Is this linked to your normal clubcard account?
    In which case can you only earn 30,000 points per quarter? (I often spend £12k+ a month with Tesco). Or can you earn unlimited points through credit card spend and max 30,000 through normal spend?

  3. OT: but anyone else had a delay with Starwood points dropping from their Amex to their SPG account? Mine would always leave my Amex and land in my SPG account on 5th or 6th of the month.

    • See comments on yesterday’s bits. My BAPP pts finally posted today after 1 week rather than overnight.

    • Yes – mine disappeared from my Amex on Monday and yet to reappear on SPG. However my wife’s went from her Amex yesterday but appeared on SPG today. Odd.

  4. Currently waiting for mine to drop out too. Notice more and more delay in their processing time recently…
    Don’t merit this card at all, the one today, probably continue with the free one indefinitely.

  5. When you say to use this as your Clubcard and “pay with a more lucrative credit card” – is there actually any more lucrative card for Tesco spend?

    • Starwood Amex I rate generally as more lucrative or any card you’re aiming to hit a spend bonus on.

      • And they are currently having a double points offer on SPG/Marriott spend plus, 500 or 1000 extra points at selected hotels (large range). It’s hard not to like SPG.

  6. Sorry OT question – just got the Lloyds Avios cards and looks like I am affected by the issue where the Avios fail to transfer.

    Does it really take the full 26 weeks to fix? Is that the same for the upgrade voucher too? At what point can you ask for compensation and/or complain to the ombudsman? Any advice appreciated.

    My partner and I have both had these cards before and never had an issue so bit odd I have the issue now when nothing has changed e.g. address, Avios account etc.

    • In my case I am pretty much at the 26 week mark and it hasn’t been resolved. They don’t seem to be able to explain what causes the issue or what they need to do to rectify it. I’ve had to chase them up regularly via online form and phone (you can’t email them, which is annoying), to get the avios and voucher added manually, although to be fair they do this fairly quickly once asked. I’ve had £200 + £75 compensation, though none has been offered recently. I know some HFP readers have had more than this.

      I feel that 26 weeks (and counting) is a ridiculous amount of time to resolve this and last week I lodged a complaint with the FOS, though they don’t seem to be awfully quick to respond either!

      • How about offering them the final opportunity to respond before you seek legal action.?

        • Surely £275 compensation for a minor inconvenience is a very good response.
          I am jealous that my account works perfectly, although my wife has received £600 and hopes fr more in the future.

        • Mark2 – how long has your wife been waiting now ? I can’t see this ever getting resolved. I don’t know of anyone on here that has had it fixed even though the Lloyds guy says they are fixing them. Just don’t know what to believe anymore.

        • I can’t see how they can give a final response when it’s an ongoing issue?

        • I don’t think it’s a minor inconvenience to have to chase them up every month to get something which is supposed to happen automatically! What Liz says and the fact that they don’t seem to have any explanation for the problem leads me to think that outside intervention is going to be the only way to resolve this.

        • Reply to Liz:
          they have credited my wife’s Avios manually (about six months (5000) worth including holiday in US/Canada).
          Anna:
          Do you really have to chase hem every month? you know you will get them eventually, unless it is a large number that you need for a redemption.

        • Genghis says:

          If it was happening to me, I wouldn’t want the gravy train to stop. As @mark2 notes, £600 for a bit of complaining every so often on a £24 a year card when you eventually get the benefit (points and vouchers – and sometimes multiple vouchers as others have posted – ain’t bad).

    • I am beyond the official 26 week period – in fact we are almost at a year and it hasn’t been resolved. Now on weekly phone calls from Lloyds for updates but still none the wiser and they don’t seem to know why either. My complaint has been reopened so I am on for more compensation – £312 so far. Have asked for my pts to be added manually on a monthly basis so I don’t have to phone up and ask which they have agreed to.

      • I want them manually added and not stock piled till I need them. I was told when it is fixed I will get all the pts again as the system should calculate it all and send them across automatically. Whether this is true or not I don’t know. So if you get them manually addded to your account to keep it up to date then if they magically do fix it you might get them again. So far I have received about 30k Avios (5600 of them more than I should have) so if I get them all again I will be happy. I should be spending more on it but I am working on my BAPP at the moment.

        • I just got the cards last month and my first statement was last week. No Avios have posted yet. How long after the statement should I wait before chasing up/complaining?

        • If they were going to post they would have posted by now so looks like you’ve joined this little club! I would phone and register the fact they have not posted automatically and get it escalated to complaint status and assigned a complaints manager ASAP!

        • IMO it depends whether you want cash compensation or to make a point; I suggest that you will not get compensation the first month.
          I have found that the people on 0800 072 3572 are very helpful.
          I think that there is little chance of this being fixed now as the card will soon be culled when the Amex licence expires, so just lie back and enjoy the compensation. As I said before, I am jealous.

        • I have a large spend now to do (house renovation) and want to get the upgrade voucher and then I don’t really care if they pull the card or not as long as the voucher is unaffected and I get my Avios. I’ll check first with Avios to see if they opened a new account by mistake. Then on Monday, I’m going to call and complain if they are not posted.

        • Just talked with Avios customer service. They said that Avios from Lloyds are normally posted 14 days after the statement the date, so I need to wait until 14/15th before calling them again.

        • Meta – I’m sure that’s not right. We had the card before and I’m sure the points transferred over the day the statement was generated. Others who do get the points correctly should be able to confirm that.

      • Wow – fantastic compensation you’re managing to get there, Liz – long may it continue. Mine keeps on (annoyingly) working fine every month!!

    • Thanks for the replies, useful info.

      Have been told it may magically start working on my next statement but don’t believe it for a sec. Will raise a complaint when they don’t.

      @ meta – Avios also told me 14 days from statement but when I last had the card it was always the same day.

  7. I received an email from Tesco yesterday offering me the Premium MasterCard with a reduced fee of £75.

  8. Given my imminent tax bill of approx £20k and fact I don’t have a partner – this looks to be worth applying for as I will earn Avios and/or Uber credit – both of which would be useful especially if I can trigger a 241 voucher with Amex this year. My alternative is M&S credit card and trigger M&S vouchers but not looked into this yet..

  9. Mr(s) Entitled says:

    Do only 10% of HfP readers qualify for the HSBC? I would have thought it higher, perhaps double, but maybe I live in a bubble. Please dont burst my bubble!

  10. I have the free Tesco card and received email just yesterday offering me premium discounted fee of £99 instead of the usual £150.

    May be worth calling and asking for discount if you plan to apply????

    I have prem card so no need for it.

  11. Is it just me or does this card suddenly look at lot more attractive? Especially when one runs a business where no one accepts Amex :(( oh if only Curve didn’t screw up their customer support.

  12. MBNA Virgin. I’ll miss this card, it’s been my default spend card for work items, and I’ve put £20K+ through it, in around 7 months. I got the companion voucher at £7K, but what I really want are the two upgrade vouchers from £5K and £10K. Do you think it likely I’ll get these if the card is withdrawn prior to the year being complete? Obviously no one knows for sure, but wonder if there were guesses based on previous similar situations. Will certainly miss the 2miles/£, was building a tidy VS pot without actually flying them.

    • My year is up in Dec so like you I want to make sure I have the upgrade vouchers, im also unsure whether to pay the £140 in Dec and see how long it continues or cancel and see what else comes up with the new cards etc.

      • Apparently the vouchers typically appear in your Flying Club account in the week or so before the fee applies. Once in your FC account you can cancel the card and not pay the fee without problem. The repeated advice is don’t use the card after the 1st year anniversary if you don’t want to pay the fee. Even if you get charged because you didn’t cancel in time, so long as you don’t use the card the fee can be cancelled.

  13. Richard G says:

    Has there been any sort of consensus on what’s the best Visa / Mastercard? (Premier aside)

    I use my Amex for most things, but obviously there are many places that wont take it.

  14. OT – I made some queries recently regarding best use of the BA PP Amex, thanks for the responses but there is one area I’m still not 100% sure on, therefore I will summarise in the scenario below…

    Jan 2017 – Husband opens new Amex account and BA PP card with Wife as supplementary cardholder.
    Aug 2017 – Husband achieves £10k spend and gets 2 for 1 Avios voucher, refers Wife for her own BA PP card with Husband as supplementary card holder.
    Sep 2017 – Husband downgrades to free BA blue Amex.
    May 2018 – Wife achieves £10k spend and gets 2 for 1 voucher. Both Husband and Wife’s vouchers redeemed for family of 4 travelling in 2019.
    June 2018 – Husband upgrades to BA PP card with Wife as supplementary card holder.

    My question is, will Husband then have until Jan 2019 or June 2019 to achieve the £10k spend for the 2 for 1 voucher?

    • Genghis says:

      Jan 19

    • Bob, why are you not cancelling your BA blue card you can easily be referred by your wife after 6/12! It seems a wast hanging onto it. She then gets a decent referral bonus 9k and you can get a further 26 k spend bonus. Once wife achieves her 241 she can refer you then cancels hers! Nice rotation going There!

      • I had thought about that option but am a bit reticent to churn too many credit card accounts. I have no such qualms over Amex charge cards however!

        Thanks for responding 🙂

    • Has anyone every tried the trick of earning the 241 and then downgrading to the free BA Card, waiting 2 months and then upgrading again meaning you will get another 241 when you hit the 10k. I’ve managed to do mine in 2 months so waiting the voucher to hit my account. I’ve already had the emailing me I’ve got it. Will downgrade once it’s there.

  15. OT, Who can tell me how to use the Lloyds upgrade voucher for my Partner on a return journey?

    Iv heard this can be done without the holder traveling, if you know how that is!

    • I’m sure someone will have done this, but maybe the system would let you input your partner’s details as the passenger if you try a dummy booking?

      • Thanks Anna, I need a connection so I always have to call Avios. I will give it a try!

    • I thought you just called them? AFAIK the online system can only handle a bog-standard return from London so lots of us end up having to call them, they’re thankfully pretty good on the phone.

  16. ‘(It is actually – and unexpectedly – going to be the last article in this series, given that the United and Virgin cards were suspended this week!)’

    Pfft. There will be new travel CC offers after this shake down and we’ll soon be back to moaning you’re not keeping up with stuff. It’s just a correction. It’s the nature of the beast with aviation 🙂

  17. OT but on the Lloyds saga – i’ve actually just had a letter from them saying the issue will be resolved by November 14th – let’s see what happens!

    The letter was sent on October 28th, sad state of affairs the post these days!

    • Fingers crossed for you Anna. I didn’t get a letter. I phoned when my 26 wks was up on 5/10 and was told when the statement for Oct posted all would be fixed! My o/s pts have manually been credited today so my account is up to date again.

      • I’m fully expecting the 14th to come and go and to be fobbed off again, but I suppose a letter is good evidence for the FOS case!

        • Are you expecting the FOS to make Lloyds rewrite their IT system?

        • No – just to adhere to their own Terms and Conditions. Someone’s got a bee in their bonnet today.