Tesco Bank has launched its biggest ever sign-up bonus for the Tesco Premium Credit Card.
You can check out the details here. As usual I need to tell you that the representative APR is 56.5% variable, including the fee, assuming a notional £1200 credit limit. The rate on purchases is 19.9% variable.
Until 11th July, you will receive 5,000 Tesco Clubcard points when you sign up.
There is NO spending target to hit. All you need to do is make one purchase in Tesco, or online from Tesco Direct, within two months of getting the card.
5,000 Tesco Clubcard points will get you:
12,500 Virgin Flying Club miles which, given their very frequent 20% conversion bonuses, you can reasonably see as 15,000 miles
£150 of Uber credit
…. or up to £200 of Pizza Express vouchers or other Clubcard redemptions
Not only that, but you will be getting the highest earning Avios credit card which is a Visa or Mastercard assuming that you do not qualify for HSBC Premier. It works out at 0.6 Avios per £1 spent.
And free travel insurance for your family.
Surely there is a catch?
Yes, there is.
The Tesco Premium Credit Card has a £150 annual fee.
You are paying £150 to receive 12,000 Avios or 15,000 Virgin Flying Club miles plus the other card benefits. You really need to look at these other benefits to decide if the card is worth it. Even if you think it is good value for the first year – and it is, I think – it is difficult to recommend renewing it unless you use the travel insurance or you can trigger the Tesco spend bonus.
Full details of the benefits are on the Tesco Bank website here.
Let’s go through the benefits of the Tesco Premium Credit Card one by one:
Benefit: 1 Clubcard point for every £1 you spend on the card in Tesco
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. However, you can get the same rate from the Tesco Bank debit card on your Tesco shopping if you want to open a Tesco Bank current account.
Benefit: 5,000 Clubcard points bonus if you spend £5,000 with Tesco
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. Things start looking interesting.
I can recommend this card if you easily spend £5,000 per year in Tesco purely because of the extra 5,000 Clubcard points at the end of the year. That would get you 12,000 Avios or 12,500 Virgin Flying Club miles. More importantly, you would have earned 2.4 Avios or 2.5 Virgin miles per £1 on all that £5,000 of spending which would be another 12,000 Avios or 12,500 Virgin miles. And none of this factors in the value of the sign-up bonus.
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. You should look at the small print of course, especially if you have pre-existing conditions.
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 £115 per person for global cover.
You need to decide what value, if any, you place on this benefit.
Benefit: 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 for every £1 you spend based on receiving 0.25 Clubcard points. This is substantially better than the Lloyds Avios Rewards Mastercard which earns just 0.25 Avios per £1.
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 not the best deal for collectors of Virgin Flying Club miles. You would be far better off getting one of the two new Virgin Flying Club credit cards. However, if you were turned down for the new Virgin Atlantic cards then this is not a bad substitute. The existing MBNA Virgin cards are likely to be closed very soon.
Benefit: 1% enhanced exchange rate when you buy travel money
I would value this at nothing, as I believe that you would still get a better deal using a 0% FX fee credit card or a 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.
This new 5,000 Clubcard points sign-up bonus makes the Tesco Premium Credit Card look attractive for the first time ever – at least for a year.
If you an Avios collector who has a lot of Visa or Mastercard spending then this is very interesting. The 12,000 Avios you get from the sign-up bonus offsets much of the annual fee and you are left with a generous Visa / Mastercard product and a year of free travel insurance.
If you are a Virgin Flying Club collector then this is an opportunity to buy 15,000 Virgin miles for £150 – and get a year of free travel insurance. For day to day spending, stick with one of the new Virgin Atlantic credit cards.
If you spend a lot on Uber in the UK then this is basically a way to get free annual travel insurance for a year as well as a generous Visa / Mastercard credit card. The 5,000 Clubcard points will convert into £150 of Uber credit which entirely nets off the annual fee.
If you are seeking Spire Elite status with IHG Rewards Club, this offer may also be of interest. Move the 5,000 Clubcard points to Virgin Flying Club when a 20% bonus is running to get 15,000 miles. 15,000 Virgin Atlantic miles convert to 15,000 IHG Reward Club points (see the Virgin site here). Whilst usually a bad deal – as I’d only value the points at £60 – these points DO count for IHG status, putting you 15,000 points closer to Spire Elite.
In terms of your spending:
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 for Year 2 onwards.
If you currently buy stand-alone travel insurance, it may work for you long term
If you are a very high earner, do compare Tesco Premium with the HSBC Premier World Elite Mastercard which is a better package and also, via the linked current account, gives you 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.
You can find out more about the Tesco Premium Mastercard, and apply, on this page of the Tesco Bank website.
Want to earn more points from credit cards? – September 2021 update
If you are looking to apply for a new credit or charge card, here are our September 2021 recommendations based on the current sign-up bonus.
The following offers will expire on 2nd November 2021:
- 10,000 Avios on British Airways American Express
- 40,000 Avios on British Airways American Express Premium Plus
- 60,000 points on The Platinum Card from American Express
Here are the top current deals:
British Airways American Express
10,000 Avios for signing up, no annual fee and an Economy 241 voucher for spending ….. Read our full review
British Airways American Express Premium Plus
40,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion 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 and an unbeatable set of travel benefits – for a fee Read our full review
Virgin Atlantic Reward+ Mastercard
15,000 points bonus and the most generous non-Amex for day to day spending 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 Gold
20,000 points sign-up bonus and free for a year Read our full review
American Express Business Platinum
40,000 points sign-up bonus and a long list of travel benefits Read our full review
British Airways Accelerating Business American Express
60,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review
Capital On Tap Business Rewards Visa
The most generous Avios Visa or Mastercard 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: