Tesco Bank starts to treat pre-paid cards as a cash advance – with a 4% fee

Since the law changed in January to ban credit card acceptance fees, there has been a interesting miles earning niche available.

Some of the pre-loaded travel money cards, such as Revolut (we reviewed Revolut here, our special offer saves you the £5 fee), have been treated by some credit card companies as a purchase.  This means that you earn miles or points when you load up your Revolut, Monzo etc debit card.

There is no list of which credit cards treat Revolut etc as a cash advance and which treat it as a purchase – you need to try out the various cards you own.

Tesco Bank has now decided to take action.

From 1st June, Tesco credit cards will increase their cash advance fee from 3.0% to 3.99%.  More importantly, it will now treat payments to prepaid or virtual cards, such as Revolut, as a cash advance.

For clarity, this does not impact Curve.  If you have linked Curve to your Tesco credit card you may have received this letter.  This is because, for two days earlier this year, Curve transactions were incorrectly coded by Mastercard.  If you used Curve during those two days then Tesco thinks – incorrectly – you were loading a prepaid card.

Tesco also has other targets in its sight.  Wire or international money transfers, repayments of loans or mortgages, purchases of foreign currency except in Tesco stores, investments, share trading and spread betting payments will be treated as cash advances.  (I seriously doubt that any mortgage lender was actually accepting a Tesco credit card as payment, but who knows?!)

I get a feeling that, by the end of the year, it will no longer be possible to use any UK credit for a fee-free top-up of a prepaid debit card.

Want to earn more points from credit cards? – December 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:

Barclaycard Avios Plus Mastercard

Get 25,000 Avios for signing up and an upgrade voucher at £10,000 Read our full review

Barclaycard Avios Mastercard

Get 5,000 Avios for signing up and an upgrade voucher at £20,000 Read our full review

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.

SPECIAL OFFER: Until 14th January 2025, the sign-up bonus on ‘free for a year’ American Express Preferred Rewards Gold is increased to 30,000 Membership Rewards points. This converts into 30,000 Avios. Click here to apply.

SPECIAL OFFER: Until 14th January 2025, the sign-up bonus on The Platinum Card from American Express is increased to 80,000 Membership Rewards points. This converts into 80,000 Avios! The spend requirement is changed to £10,000 in six months for this offer. Click here to apply.

American Express Preferred Rewards Gold

Your best beginner’s card – 30,000 points, FREE for a year & four airport lounge passes Read our full review

British Airways American Express Premium Plus

30,000 Avios and the famous annual 2-4-1 voucher Read our full review

The Platinum Card from American Express

Huge 80,000 bonus points and great travel benefits – for a large fee Read our full review

Virgin Atlantic Reward+ Mastercard

18,000 bonus points and 1.5 points for every £1 you spend 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:

SPECIAL OFFER: Until 9th December 2024, there are EXCLUSIVE sign-up offers for our readers on the two Capital on Tap small business Visa cards. You can earn 20,000 points on the Business Rewards card and 30,000 points on the new Pro card. Click here to apply.

American Express Business Platinum

50,000 points when you sign-up and an annual £200 Amex Travel credit Read our full review

American Express Business Gold

20,000 points sign-up bonus and FREE for a year Read our full review

Capital on Tap Pro Visa

30,000 points (TO 9TH DECEMBER) plus good benefits Read our full review

Capital on Tap Business Rewards Visa

20,000 points (ONLY TO 9TH DECEMBER) Read our full review

British Airways American Express Accelerating Business

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios 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 when you spend at least £2,000 per month.

Barclaycard Select Cashback Business Credit Card

Get 1% cashback when you spend at least £2,000 per month* Read our full review