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

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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.

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.

What is the sign-up bonus?

Until 11th July, you will receive 5,000 Clubcard points with your first purchase.  This is an excellent return and should offset the fee for the first year, meaning that the other benefits are effectively free.

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.

1 Clubcard point for every £1 you spend – plus a 5,000 point bonus

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).

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.

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.  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 does not justify the fee.

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

Is this a good card to use when travelling?

As Tesco Bank adds a 3% foreign exchange fee, you might want to get a separate free credit card to use abroadThe Virgin Money Travel Credit Card (click here) is free and has NO foreign exchange fees.  You may want to apply for one of these as well.  There are no travel rewards card without a foreign exchange fee.

Conclusion

Until 11th July, the Tesco Premium Mastercard is very attractive.  The 5,000 Clubcard points you get for signing up are worth 12,000 Avios or 12,500 Virgin Flying Club miles.  Alternatively you could get £150 of Uber credit or redeem for many other Clubcard deals.  Your annual fee is effectively covered for the first year.

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 after the first year.

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’ link in the menu bar at the top of the page.)

Comments (72)

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

  • 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.

    • Rob says:

      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.

  • Ian says:

    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?

  • Ian says:

    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.

    • Liz says:

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

    • GB74 says:

      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.

  • Polly says:

    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.

  • MD says:

    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?

    • Ian says:

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

      • Cate says:

        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.

  • AndyR says:

    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.

    • Anna says:

      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!

      • TripRep says:

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

        • mark2 says:

          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.

        • Liz says:

          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.

        • Anna says:

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

        • Anna says:

          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.

        • mark2 says:

          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).

    • Liz says:

      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.

      • Liz says:

        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.

        • meta says:

          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?

        • Liz says:

          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!

        • mark2 says:

          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.

        • meta says:

          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.

        • meta says:

          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.

        • Liz says:

          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.

      • Alan says:

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

    • AndyR says:

      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.

  • Dave says:

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

    • Rob says:

      For the travel insurance alone, I would look at that very closely.

    • Anna says:

      I cancelled the standard Tesco credit card recently so maybe I’ll get this as well? I think it would be my next option if the Lloyds pack is withdrawn.

  • Fran says:

    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..

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