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Tesco Bank has launched Clubcard Pay, an interesting new debit card product that you top up from your bank account.

We are writing about it because you earn Clubcard points on each transaction you make using Clubcard Pay. These can be converted into Virgin Points, Hotels.com credit or various other rewards.

If you remember the Tesco current account debit card, which is now closed to new applicants, it is very similar.

You can learn more about Clubcard Pay on its website here.

How does Clubcard Pay work?

This is how Clubcard Pay works:

  • Clubcard Pay is a Visa debit card
  • Clubcard Pay has no application fees or annual fees
  • You top it up by loading funds from your current account, which can be with any bank, via the Tesco Bank mobile app
  • You can use the card anywhere that debit cards are accepted
  • You earn 1 Clubcard point for every £8 you spend outside Tesco
  • You do not earn anything when you spend in Tesco, apart from the ‘base’ earning of 1 Clubcard point per £1 spent (Clubcard Pay replaces your standard Clubcard)
  • You earn nothing if you use Clubcard Pay to pay into bank accounts, NSI or other financial institutions (the position with HMRC is not clear), share dealing accounts, gambling accounts or if you withdraw money via ATMs
  • There is a 2.75% foreign exchange fee, so there is no benefit in using this card when you travel

There is an optional extra feature where you can round up each transaction to the nearest £1 and save the money via Tesco Bank. You can disable this and I am ignoring it here.

The Tesco in-store earning rate looks weird ….

Tesco appears to be saying that you won’t earn anything extra on your Tesco spending, after Day 100, but you will earn extra points on spending elsewhere.

For the first 100 days, you WILL earn an extra 1 Clubcard point for every £1 spent at Tesco or in a Tesco garage.

After that, you revert back to your standard Clubcard earning rate of 1 point per £1. This is instead of, and not on top of, the 1 point per £1 you would get for swiping a standard Clubcard.

Here is the text to confirm it:

“For the first 3 months (100 days to be exact) after you open your Clubcard Pay account you’ll collect 2 Clubcard points for every £1 you spend using your Clubcard Pay debit card, on qualifying products in Tesco and on Tesco Fuel (excludes Esso). That’s one extra Clubcard point for every £1 you spend. After 100 days, you will go back to the Clubcard points collection rate you usually get in Tesco when using your Clubcard.”

Double points on Tesco shopping is small change to many HfP readers, however. The key issue is what you earn on general debit card spending.

Based on 1 Clubcard point per £8 spent, you would receive:

  • 2.5 Virgin Points per £8 spent
  • 3p of Hotels.com voucher per £8 spent

…. and so on. The full list of Tesco Clubcard travel redemption partners is here and of course there are many non-travel options too.

Clearly this is not very attractive compared to credit card rewards. It is even worse than it looks, because it is based on a ‘per transaction’ basis. A payment of £7.99 earns you no points. A payment of £15.99 only earns you 1 Clubcard point.

Who should get this card?

If you make substantial and regular payments by debit card – excluding payments to banks, gambling sites, NSI, financial institutions etc – then this looks like an interesting deal.

You will be getting no rewards on your debit card transactions at the moment, so even a paltry sum is better than nothing.

If it works for paying HMRC I could be interested. When you are paying large sums of VAT, PAYE, self-assessment etc even a tiny return like 2.5 Virgin Points per £8 will add up.

It may work for people who can’t justify the £150 annual fee for Curve Metal. Curve Metal allows you to pay HMRC using a Visa or Mastercard credit card for free, earning credit card rewards.

If you are not a big user of debit cards, I don’t see the attraction of Clubcard Pay – especially as you have to keep it topped up via manual transfers which adds extra faff to your life.

You can find out more about Clubcard Pay on the Tesco Bank website here.

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Category

Tesco Clubcard, Virgin Atlantic and Flying Club

Comments (55)

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

  • Rhys says:
    15 Apr15 April 09:34

    You could ask that about all the big supermarkets – why buy from Tesco/Sainsburys/Morrisons/Waitrose when everything is cheaper in Aldi/Lidl? Some of it may be convenience (ie distance) but there are clearly many other factors for why millions choose to shop elsewhere…

  • Genghis says:
    15 Apr15 April 09:58

    I’m a big fan of Lidl: for us they’re good for a stock up shop of core items once a month. And their loyalty scheme is decent. It’s changed my behaviour in that I will go to Lidl at the start and end of a calendar month (and then not the next month) to hit the £200 spend for £12 back. I’ve also learned to split the shop to get the reward back instantly. But they just don’t have the range of items we like to eat and they don’t deliver.

    • Rui N. says:
      15 Apr15 April 10:04

      @Genghis, how long does it take for the reward to become available after you reach the £100/£200 in Lidl? I tried to do what you do the other day, but it didn’t show up “instantly” after making the payment. But when I finished putting the groceries in the car it seemed to be available already. But it would be better to have to go back into the store to use the reward.

      • Genghis says:
        15 Apr15 April 10:11

        Straight away. So if I’m spending £120 say, I’ll split the shop into £110 and £10, say. Then by the time the cashier has put through the second lot of items, I’ve been able to enable the coupon in the app for £2 off.
        Maybe try closing the app but it works for me.

        • Genghis says:
          15 Apr15 April 10:16

          One other tip, go to the coupon tab straight away and it should appear there, instead of waiting for any link on the home page of having hit the offer to appear, if that makes sense.

        • Rui N. says:
          15 Apr15 April 11:07

          Thanks a lot Genghis, I’ll try it next time 🙂

    • C says:
      15 Apr15 April 12:02

      I have started doing similar: big shopping for basics at Lidl, and then local and specialty shops for everything else. I like the threshold coupons at £100/200, but find some of the others amusing. 15% off of something that costs £0.89 doesn’t really influence my purchasing patters – I’m already in the store because I know that regular price of £0.89 is the same or lower than the sale price elsewhere for comparable quality.

      • mike says:
        16 Apr16 April 18:15

        Occasionally it does influence my behaviour!
        If it’s something I buy lots of for the store cupboard (eg bleach!) I might buy six on that visit!

  • Sandgrounder says:
    15 Apr15 April 10:21

    I can’t buy everything I need in Lidl or Aldi, although I agree they do offer some good quality products. Many people wonder if it is worth trekking to multiple stores. It depends how much value you place on your time. I think this product is a budgeting tool aimed at Tesco customers who haven’t until now considered a second current account for their disposable income. It does however have some appeal for the miles/points community.

  • Sandgrounder says:
    15 Apr15 April 10:22

    Voldeportal is offering 8% in store at Tesco for the next week or so, don’t know if it has already been mentioned.

  • Pat says:
    15 Apr15 April 10:27

    Lol that rate. Just use an Amex gold or plt

  • Dave says:
    15 Apr15 April 10:43

    Because a lot of the good just tastes disgusting from Aldi Not every product, just lots, thats why I don’t shop there I tried it once and spat so much food out in the bin it was silly. Add to that poor selection and no self service tills so you just get rushed through the checkout no thanks, I will stick to Sainsburys.

    • Rhys says:
      15 Apr15 April 10:57

      Lidl is definitely better than Aldi in my experience.

      • C says:
        15 Apr15 April 12:05

        +1
        I think Aldi has a somewhat better selection than Lidl, but my local Lidl is marginally closer and a much more pleasant experience.

        But, back on subject, no real points at either, other than Lidl Plus discounts.

    • Andy says:
      15 Apr15 April 11:49

      Out of interest, which goods are disgusting at Aldi?

      I split my shopping between Aldi, Morrisons and Sainsburys and for the vast majority of things I buy I can’t really tell the difference between any of the stores. The idea that some are so bad you’re not able to swallow them seems hyperbolic.

      • memesweeper says:
        15 Apr15 April 12:12

        Nordpak — their fake Lurpak — is horrific.

        • Chrisasaurus says:
          16 Apr16 April 08:01

          Lurpak is already horrific!

          Lidl has better ‘nice’ items (their deluxe range was always good) and in store bakery a winner

          Not shopped in one for months because been having Sainsbury’s deliver but will venture back soon

      • Lumma says:
        15 Apr15 April 12:19

        The own brand crisps are disgusting at Lidl, some of the cooked meat is awful too. Bought some pastrami and put it straight in the bin when I smelled it

        • Chrisasaurus says:
          16 Apr16 April 08:04

          Own brand crisps are revolting everywhere, it’s not a good area to change costs in your shopping budget (arguably removing crisps is a better proposition)

          The cheaper cooked meats are nasty in all shops, that’s how they get to be cheaper…

  • Andrew says:
    15 Apr15 April 10:44

    Because Aldi & Lidl don’t stock everything.

    Aldi also has really tight bollards to stop gypsy caravans from setting up in their car park that are awkward to get through. Plus it’s near student accommodation and is always rammed.

    I shop in Lidl because they sell Fyffes bananas. I shop in M&S because it’s convenient and has good food. I also shop in Sainsbury’s because they have a bigger range than both Lidl and M&S.

    I really don’t care if my supermarket basket costs £1 more or less. All my household stuff comes from Wilko, B&M or HomeBargains – they are cheaper than anywhere else for the branded stuff.

  • ChrisW says:
    15 Apr15 April 12:02

    Waitrose is a significantly more pleasant experience than shopping at Lidl.

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