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How to earn Avios or Virgin miles via a Tesco current account

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Since 2014, when Tesco launched its current account, it has been possible to earn Avios or Virgin Flying Club miles with your day-to-day debit card banking.

The main reason we don’t cover it much is that Tesco never offers bonuses for moving your banking across.  Barclays Premier is currently offering 25,000 Avios if you switch, whilst HSBC Premier is offering £175 – and you can then get the Avios-earning HSBC Premier credit cards.  The current M&S offer is £180 if you keep your account for 12 months.

It seemed logical to me that Tesco Bank could afford to offer 10,000 Clubcard points (24,000 Avios or 25,000 Virgin miles) at some point.  But, apart from a couple of very tightly targeted trials, there has never been an incentive to sign up in the five years that the account has been running.

Tesco current account

Here is the Tesco Bank website promoting the current account.

The account is totally free.

How do you earn Avios with the Tesco current account?

You will earn Clubcard points on all of your debit card transactions:

1 point per £1 spent in Tesco (2.4 Avios per £1 / 2.5 Virgin miles per £1)

1 point per £8 spent elsewhere (0.3 Avios per £1 / 0.31 Virgin miles per £1)

The ‘1 point per £1’ spent in Tesco is a very generous benefit.  If you are spending £100 per week in Tesco, which includes Tesco Fuel, you would earn 12,480 Avios or 13,000 Virgin Flying Club miles per year if you put all of this spending onto your debit card.  That is on top of the base Clubcard points you would receive irrespective of how you pay.  This is a pretty attractive deal.

Even the ‘1 point per £8 spent elsewhere’ is attractive.   Whilst you would be better off in most circumstances using a loyalty credit card instead, it is not always possible to avoid using a debit card.

There is ‘small print’ attached to the ‘1 Clubcard point per £8 spent on the debit card’.  All payments to ‘banks and financial institutions’ are exempt.  This means that you cannot pay your mortgage, pay off a credit card bill or pay money into a savings account.

It DOES work with payments to the Inland Revenue but that is not something that most people can benefit from.  If you DO pay HMRC, you will get a better deal by getting a Curve Card and linking it to a generous Visa or Mastercard credit card.

As with the Tesco Clubcard Mastercard, it is worth noting that debit card spending is rounded down to the nearest multiple of £8.  A £7.99 lunch payment will earn you exactly zero Clubcard points.  This is a major deterrent unless you are using the card for large transactions.

And a little bit of interest too

Current account holders receive 1% interest on the first £3,000 in the account.  

To earn this interest rate, you must pay in at least £750 and have at least three direct debits paid from your account per statement month.

Foreign exchange use of the debit card incurs a 2.75% fee.

Conclusion

The Tesco Bank current account was not competitive when it launched but it has improved.   If we’re honest, it has also benefited from competitors reducing the benefits on their products.

The lack of a moving bonus remains problematical.  If you are fed up with your existing bank, turning down £180 from M&S or 25,000 Avios from Barclays Premier in order to earn a few Avios in the future is not necessarily a great deal.

Curve Card has also changed the game a little.  Curve Card is a free debit card (in fact, they pay you £5 for trying it) which recharges your purchases to most linked points-earning credit Visa or Mastercard.  Making your debit card payments, such as HMRC or council tax, with Curve allows you to earn points on whatever Visa or Mastercard you wish.  You can find out more about Curve and how to get your free £5 sign-up credit in this article.

Is it worth the trouble of moving your current account to Tesco Bank?  For me, I’m not sure.

I have VAT, PAYE and income tax payments but I can put some of these – not all, due to Curve’s transaction limits – through Curve and earn miles and points that way.  I have no other major debit card payments.

I don’t spend a lot in Tesco – perhaps £5 per week at our Tesco Express – so ‘1 point per £1 on the debit card’ isn’t worth much

I would have no problem keeping a £3,000 balance on the account, but £30 of annual interest (which is £30 more than I get from HSBC at present) – less income tax – is not a big enough incentive

For some people, however, this package may well stack up.  If you’re sick of your current account provider it may be time to switch – although, for clarity, you can keep your old bank account open and still take advantage of this deal as long as you move your salary and three direct debits across.

You can find out more about the Tesco Bank current account here.

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Comments

  1. Just a note that, if it works for inland revenue it should work when paying your childcare bill via the gov website as well. When you have a 4 figure childcare bill each month, it could start to stack up. I’ve just received my card from Tesco and will give it a go this week.

    • Hi Gemma. I tried my curve with underlying HSBC credit card but it would not go through. My starking debit card was fine. Have you tried any other methods to earn points?

    • Nate1309 says:

      Curve does not work on the childcare gov website as it doesn’t have have 3DS. 🙁

    • LOL at having children. Quadruple LOL at a four-figure monthly childcare bill.

      • £40k for a decent nanny doing 12 hour days.

        We are now past ‘peak nanny’ luckily and have gone for a part time (2-7) housekeeper / nanny.

    • Yes this works on childcare gov. With two kids in nursery and using the pay+ app for occasional express shopping, it all stacks up for having one of these accounts.

  2. stevenhp1987 says:

    I use this account just for Tesco purchases.

    It is beneficial for petrol as your earn 2 points per £1 instead of 0.5 points per pound when spending on the card. Using the card as a clubcard and paying in another card earns 1 point per £1 which is better then using a regular clubcard.

    So spending on this card gets me 4.8 avios per £1 in petrol, or 2.4 avios + amex points when needing to hit spend. Better than 1.2 avios base + card cashback per £1 petrol spend.

    Would I swap all my spending? No. But having the account and transferring a £100 every couple of weeks or so is easy.

    • I pretty much do the same thing. I also use the Pay+ app which makes it a lot easier and gets the 4.8 per £1 you mentioned.

      • Same here – we do all our shopping in Tesco and have done so since the late 80’s. No Waitrose in Dundee! Hoping for another Pay+ bonus soon. We are also considering their new Plus offer as we spend a fair bit in Tesco – also now doing in laws shopping with ours plus petrol and 3 tesco mobile phones so will be worth it for us.

  3. I cancelled my Tesco account when the interest dropped from 3% to 1%. It’s hard to claim that this account has improved since it launched…

    • We had 2 accounts and we closed one when the rate dropped. The other one I had before you needed 2 direct debits and pay in £750 so i just keep £500 in it and top up when I spend on it each month.

  4. filipino_chino says:

    Tesco account…

    I keep £1k in and then just transfer in when i have a large transaction, such as £5k deposit on my car, HMRC which i pay for my entire family (they send me the money and i pay on my card)…

    Just a word of warning, Tesco did call me up and asked me if i was paying HMRC for myself or for a company as we sold some big assets in our family, so our tax bill was very large… Anyway, all fine – i get around £300 in Tesco vouchers per year – not converted them…

    Tesco account is good for large transactions, for savings go to another place

  5. Don’t switch your account to Tesco, take it out as a second account (just need to hit the DD targets and jump through the usual ID hoops) then if attractive switch offer appears you are in prime position

    • Agred – rotating standing orders work fine to keep the min. £ xxx per month requirement alive. For Tesco and other banks too.

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