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Tesco Bank suspends applications for its Avios-earning 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.

Until this week.

Tesco has suspended new applications for its current accountTake a look on its website here.

It isn’t clear if this is permanent or not. 

The website simply says:

“Sorry, we’re not accepting new current account applications at the moment, but please pop back in the new year for an update on this.

If you’re an existing customer you can continue to use your account as normal.”

Tesco has done this before, but for different reasons.  Earlier suspensions were due to the account being overrun with applications due to an exceptionally generous interest rate.  Given how far that rate has been cut in recent years, this certainly is not the case now.

Tesco let you earn Avios with your current Account DEBIT card

If you had this account, you were earning 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 was a very generous benefit.  If you were 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 was on top of the base Clubcard points you would receive irrespective of how you pay.  This was a pretty attractive deal.

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

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

It DID work with payments to the Inland Revenue.  With Curve now imposing fees on HMRC payments and Capital On Tap switching to a credit card from a debit card, it was one of the few ways of profiting from tax payments.

Is Tesco Bank still in the game or not?

I get a feeling that Tesco is trying to wind down Tesco Bank without making a big song and dance over it.  As Tesco owns its bank outright, winding it down would release a lot of capital.

In September 2019, Lloyds Bank bought Tesco’s mortgage portfolio for £3.8bn.  Not only does it no longer sell mortgages, it has sold off all the ones it had already generated.

It quietly started cutting the interest rates on its savings accounts.  These had been aggressive – I have two myself – because Tesco wanted the funding to support its mortgage lending.  Now that it isn’t making any new mortgage lending, it doesn’t have much use for deposits.  The top offering is currently 1.2% vs 1.35% at Marcus.

The credit card arm has also had a lobotomy.  The Premium card was closed, as were many variants of the standard credit card.  It is a long time since there was an incentive to sign up to their credit cards, which are another way of earning Avios and Virgin Flying Club miles, albeit at a very low rate.

I’ll keep an eye out and let you know if the current account reappears, as long as it still earns Clubcard points.


How to earn Avios from UK credit cards

How to earn Avios from UK credit cards (April 2025)

As a reminder, there are various ways of earning Avios points from UK credit cards.  Many cards also have generous 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 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 card

Barclaycard Avios Mastercard

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

There are two official British Airways American Express cards with attractive sign-up bonuses:

British Airways American Express Premium Plus

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

British Airways American Express

5,000 Avios for signing up and an Economy 2-4-1 voucher for spending £15,000 Read our full review

You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points. These points convert at 1:1 into Avios.

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

The Platinum Card from American Express

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

Run your own business?

We recommend Capital on Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, and the standard card is FREE. Capital on Tap cards also have no FX fees.

Capital on Tap Visa

NO annual fee, NO FX fees and points worth 1 Avios per £1 Read our full review

Capital on Tap Pro Visa

10,500 points (=10,500 Avios) plus good benefits Read our full review

There is also a British Airways American Express card for small businesses:

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

There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.

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

Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.

Comments (208)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Grant says:

    OT – Hilton points bookings. I am trying to price up a 5 night stay and am having to do this whilst logged out because I don’t have any points in my account at present. Am I right in thinking that the points displayed is the standard points per night redemption and therefore when I am logged in and have sufficent points balance I will see a lower total that accounts for the fifth night free offer?

    Any views on the Hilton Vilamoura and in particular the two-bed apartments?

    Thanks

    • John says:

      Mostly, but since some redemptions are revenue-based, and some hotels have higher nightly rates for 5-night stays compared to 4-night stays, so when you book 5 nights the points per night might also be higher than for 4 nights, even though the 5th night is still free it might not seem that way.

    • Peter K says:

      I’d look at just one night and times that by 4 to get a decent idea of how much it will be. It’ll be within a few thousand of that figure.
      Alternatively, price it up for 4 nights on points, then compare to how much it is for 5 nights. If basically the same you know the price for 5 nights includes the one night discount.

      • TGLoyalty says:

        The 5th free night is just the cheapest rate night in your booking if you stay 10 it’s the 2 cheapest etc

    • pointsarb says:

      That property is great, we stayed in the 2 bed apartment as a free upgrade for being Diamond. Perfect with young kids and the kids club is fab with zip lines and all. Enjoy if you go!

  • Andrew says:

    OT – First Waitrose offer of the year has just popped up on LBG. 10% on every purchase of £50 or more, max reward £30.

    This should combine with the £10 off £60 vouchers I’ve just received and one or more of the following (targetted) Waitrose Instore rewards:-

    Airtime- 2%
    Virgin- 5%
    NextJump- 5%

    • The Urbanite says:

      Seems Airtime Rewards have “special” reward rates for people who put a lot of spend through certain retailers!

  • David S says:

    So any idea what is the best option now for 0% spending and getting something back? Tandem has been great but £72 a year is a bit steep for what you get back.

    • rams1981 says:

      £1200 a month covers the fee. If you spend more than that does free cash withdrawals abroad make it worthwhile?

      • Mark says:

        To make it worth paying the fee though, that’s £1200/month foreign currency spend or £14,400 per year. Even then you can put £500/month through Curve and/or £20,000/year through an Aqua rewards card (though the latter may be tricky on a low credit limit) and get something back on foreign spend without any fees, for the moment at least. Then there’s Revolut if you’re willing to preload….

        Otherwise there are far better cards for UK spend and a number of fee free, no exchange loading cards for overseas spend.

        Really I can’t see how it’s worth £72/year.

  • Anna says:

    OT – just had an email from Hilton, buy up to 80k points, get 80k free – again!

  • Shoestring says:

    sounds about right if you remember what Raffles said

    • marcw says:

      Yep – wonder whether January 15 is when reciprocal partnership starts.

  • Secret Squirrel says:

    Damn, bet this was the policy most have chosen Inc myself. Time to cancel tomorrow and do a new application. 😩

  • Anthony says:

    O/T

    Does anyone use Green Network Energy for their gas/electric and would like to refer me for £60 each?

    • Anthony says:

      Thanks Shoestring

      They’re not the cheapest but the referral bonus is a lot higher then others, I will refer a couple of friends once I’m signed so will make up for it that way.

    • Sheila says:

      Hi Anthony, I’m five days late but if your still needing a referral for Greennetwork energy, I use them.

  • MonkeyBoy says:

    Robbl shoring up its liabilit for a post Brexit bank crash. More customers => greater liability it may not be able to cover their accounts.

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