Tesco Bank makes big changes to the Tesco Premium credit card – will it re-open?
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The Tesco Premium credit card was closed to new applicants in June. Tesco Bank has just announced major changes to the benefits package for existing cardholders which makes me think that it may be reopened to new applications at some point.
The Tesco Premium credit card was a surprisingly aggressive offering:
- £150 annual fee
- Comprehensive travel insurance
- 5,000 bonus Clubcard points (12,400 Avios) for spending £5,000 in Tesco per year
- 1 Clubcard point (2.4 Avios) per £1 spent with Tesco
- 0.25 Clubcard points (0.6 Avios) per £1 spent elsewhere
This was a real ‘Marmite’ card. For people who spent a lot at Tesco – and fuel purchases were included in the £5,000 target – it was a decent deal and a very good Visa / Mastercard option for collecting Avios. If you couldn’t spend £5,000 per year, it wasn’t worth it unless you needed the travel insurance.
Tesco Bank pulled the card from the market shortly after Tesco Direct was closed. Tesco Wine closed shortly afterwards. I think that a lot of people had been relying on Tesco Direct spending to reach the £5,000 target and these people were now stuffed.
Tesco Bank has announced that the card will be relaunched for existing cardholders from February 2019. Your benefits will change on your next card anniversary after 1st February, which means that some people will remain on the £150 package until January 2020.
Details are on the Tesco Bank website here. In summary:
- the annual fee drops to £36
- the travel insurance benefit is removed
- the bonus is realigned to offer 2,500 bonus Clubcard points (6,200 Avios) for spending £2,500 in Tesco per year
- 1 Clubcard point (2.4 Avios) per £1 spent with Tesco (unchanged)
- 0.25 Clubcard points (0.6 Avios) per £1 spent elsewhere (unchanged)
I think, if you can hit the £2,500 of annual Tesco spend – which many people could do just on fuel, even without buying any food – this looks pretty good. The £36 fee is easily justified by the 6,200 bonus Avios for spending £2,500, and you have the added benefit of earning 0.6 Avios per £1 on all your other Visa / Mastercard spend.
It is less clear cut if you collect Virgin Flying Club miles. The free Virgin Atlantic credit card, which currently has a 10,000 mile sign-up bonus for another 10 days, earns 0.75 miles per £1 spent, is better. For day to day spending, it trumps the Tesco Premium credit card. You could still justify using the Tesco Premium credit card purely for Tesco spending as long as you knew you’d hit the £2,500 annual target – but it does mean another card in your wallet.
For clarity, there is no certainty at the moment that Tesco Bank will reopen the Tesco Premium credit card to new applicants from February. If they do, however, it will become the best Visa / Mastercard option for many Head for Points readers.
PS. I did a segment on Radio 4’s ‘You and Yours’ yesterday lunchtime, discussing the recent changes to petrol loyalty with Esso dropping Clubcard and BP dropping Nectar – which Esso is joining!
You can listen by clicking here (log-in required) and fast-forwarding to 29:25.
Want to earn more points from credit cards? – April 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
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.
British Airways American Express Premium Plus
25,000 Avios and the famous annual 2-4-1 voucher Read our full review
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review
The Platinum Card from American Express
40,000 bonus points and a huge range of valuable benefits – for a 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 12th May 2024, the Capital on Tap Business Rewards Visa card is offering a bonus of 30,000 points, convertible into 30,000 Avios. You must have a Limited Company to apply. Click here to learn more and click here to apply.
British Airways Accelerating Business American Express
30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review
American Express Business Platinum
40,000 points sign-up bonus 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 Business Rewards Visa
Huge 30,000 points bonus until 12th May 2024 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.
Barclaycard Select Cashback Business Credit Card
1% cashback uncapped* on all your business spending (T&C apply) Read our full review
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