Maximise your Avios, air miles and hotel points

Get 12,000 Avios with a new sign-up bonus on the Tesco Premium Credit Card!

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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:

12,000 Avios 

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?

Tesco Premium credit card bonus points

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 or at Tesco Direct

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 during your card year (this is separate to the sign-up bonus)

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 in a Tesco store using your card

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.

Conclusion

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.  (If you are after Gold or Platinum status with IHG, don’t do this – just get one of the two IHG credit cards instead which come with Gold and Platinum status.)

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 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 ac

Comments (76)

  • Vin says:

    Does the currency spend count towards £5000 spend in one calendar year?

    • Rob says:

      Good question. I would be surprised if it did and, as there is no counter to show how near the target you are, it would be difficult to find out.

    • Liz says:

      It didn’t the last time – I’m sure it’s excluded in the T&Cs

  • Mycity says:

    Am I correct that online grocery counts?

    Oh and I assume you still get points on your Clubcard, therefore total of 2 CC points per £

    • Mycity says:

      Sorry that should be online grocery counts towards the 5k spend

    • Rob says:

      Yes and Yes – as does Direct, fuel etc.

      I think most people who do the £5k do it with a heavy fuel contribution.

  • Anna says:

    I just don’t think 5000 Clubcard points is an appealing enough sign up bonus when compared with cards such as the Amex Gold and Platinum. I’ve collected 74,000 avios in the past month from upgrading to Platinum and making 3 referrals.

    • Rob says:

      It isn’t an ‘or’ decision, it is an ‘and’ decision (especially as this is a Visa / MC). Assuming your credit rating is good enough, you should see this as a stand-alone decision, especially as there is no minimum spend which would distract you from putting spend onto an Amex.

      • Anna says:

        I know, i’m just comparing the earning opportunities. Lloyds and HH get my non Amex spend so I don’t think it’s worth the effort and outlay of the annual fee for 5000 Clubcard points.

  • Neil says:

    So actually…. if you can make the £5,000 annual spending target and collect for Virgin, this card isn’t too bad???

    + 5,000cc – signup bonus
    + 5,000cc – for £5,000 spend
    + 5,000cc – spend bonus

    = 15,000cc in total
    + 3,000cc – 20% bonus

    = 18,000cc per annum or 45,000 Virgin points (plus the 15,000 you’d get with a normal club card)

    60,000 Virgin points isn’t bad for £150 and £5,000 spend at Tesco a year?!

    • Jon says:

      That was the calculation I was trying to do. I’m in for the Avios – 36k isn’t bad for £150, although it’ll take some effort to get to £5k spend in Tesco.

    • Mycity says:

      I’d only call it 45k Virgin miles actually, as you’d get the other 15k miles from a Clubcard no mater what credit card one used.

    • Liz says:

      Shouldn’t that be 5000 sign up, 5000 bonus for doing the spend, 5000 for using the Clubcard and 5000 for using the credit card plus any % bonus offered by Virgin plus the Pay+ bonus till the end of the year.

  • GC says:

    £5k spend should be too difficult if you buy gift cards for M&S, Next, Amazon etc

  • JPV says:

    It this works like the free Tesco debit card, then you can also double-dip bonus clubcard points by tying the card to the Pay+ app which gives “1 extra Clubcard point for every £4 you spend in Tesco until 31 December 2018” – i.e. an extra 0.25 cc per £.

    Separate question – are any readers relying on a travel insurance package from a CC product that doesn’t let them register and get approved for pre-existing conditions? I’m covered by about 4 different travel insurance packages from CCs, but still spend ~£100 a year on medical travel insurance.

    Surely everyone has pre-existing conditions? For small claims it’s unlikely to matter, but the prospect of needing million-dollar emergency medical care and then being denied a claim because I saw the doctor about a sore knee three months before travelling seems a scary one.

    • Rob says:

      That’s not what it means. It means if you have a bad knee abroad that was previously operated on in the UK then you’re stuck. If you bang your head having previously had a knee operation then you’re fine.

  • JamesB says:

    Only attractive if one has already maxed out amex churns and referals, it is possible to do a lot more danage with £5k spend on those that it is on this. In the proper circumstances though, this is still a good deal for a year.

  • JohnT says:

    O/T – My AwardWallet subscription is up for renewal. I know this time last year there was an offer for $10 including grandfather rights to the $10 fee. Anyone had that go through OK automatically OK? Don’t feel it is worth $30 for 1 year for my profile.