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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, 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.

What is Tesco Clubcard Pay debit card?

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 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.

Want to earn more points from credit cards? – November 2021 update

If you are looking to apply for a new credit or charge card, here are our November 2021 recommendations based on the current sign-up bonus

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the top current deals:

British Airways BA Amex American Express card

British Airways American Express

5,000 Avios for signing up, no annual fee and an Economy 2-4-1 voucher for spending ….. Read our full review

British Airways BA Premium Plus American Express Amex credit card

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

Nectar American Express

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee 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.

American Express Business Gold

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

Amex Platinum Business American Express

American Express Business Platinum

40,000 points sign-up bonus and a long list of travel benefits Read our full review

British Airways Accelerating Business American Express card

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

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company 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 Credit Card

1% cashback and no annual fee Read our full review

Comments (57)

  • ADS says:

    Rounding down each transaction to the nearest £8 for points calculation must surely be the most unfriendly things that a card provider can do !

    • Rob says:

      Tesco did this for years on the debit card AND the credit card – either no-one noticed or no-one cared.

      What was odd is that Clubcard points from the credit card used to post to your Clubcard account on a transaction by transaction basis so it would have been very obvious that many purchases earned nothing.

      It makes a big impact of card spend it you are mainly using plastic for coffees, your lunch etc as you rarely get to £8 to earn 1 point. If you went for this purely to pay HMRC then obviously it doesn’t really make a difference.

      The maths on this product don’t make sense to me, but Tesco Bank has a history of introducing products which don’t make a lot of sense.

      Once upon a time it launched a World Elite Mastercard. The snag is that World Elite Mastercards incurred very high fees – and unsurprisingly Tesco credit card holders were using this card heavily in Tesco. The stores were not happy about the big jump in card fees and the product was dropped.

  • TM says:

    Aldi and Lidl don’t deliver last time I checked?

    There is an opportunity cost with Aldi and Lidl, in that you need to actually spend your time and money driving to the physical store and picking out the items yourself. This would take me at least an hour per shop, so several hours per month. I am quite happy to pay a bit more to have someone drive it to my house, where I can unload it in 5 minutes.

    • WillPS says:

      Aldi is on Deliveroo.

      • Freddy says:

        We use Tesco for convenience of having a full selection of goods. We pick up kids clothing and other extras which would involve a further shopping trip elsewhere. Work perks Tesco voucher and Tesco clubcard plus reduce the cost by quite a bit

  • WillPS says:

    Tempted to get one and find a way of getting free points out of it.

    I closed my current accounts with them in a huff, just before they stopped allowing new applicants, then started noticing hints of earning potential too late.

    Looks like they’ve caught the most obvious one tho.

  • Neil Spellings says:

    I’ve updated their groceries app but can’t see any mention of it there or how to apply?

  • Jimmy says:

    Tesco really need to reappraise their Clubcard strategy. I used to put a small fortune through them every month back in the day.

    • WillPS says:

      Does Tesco miss the sort of spend you did though?

      Presumably they make more out of gift cards now than when they gave back ~£4 on each £50 spent, even if they might sell quite a lot less in volume than they previously did.

      The same is true for the mad bonus points they once gave away with printers and whatnot.

      Everything Tesco has invested in the last 6 or 7 years has been focused on getting customers to do more of their regular shop in there, and given their relative success that won’t be changing.

  • SamWardill says:

    They don’t make it easy to apply. They say you can apply on the Groceries App but I can’t see how?

  • J says:

    Any thoughts as to using this card as an underlying debit card for Curve Fronted on a non-metal card? Looks like Curve doesn’t charge the usual 1.5% if the underlying card is a debit card, but would Tesco be likely to block given (if I remember rightly) MCCs are passed on?

  • Yuff says:

    Anyone know how you apply for this?
    I contacted Tesco and they said to go into the Tesco bank app and apply for a standard bank account. I cannot see anywhere to apply for a standard bank account 🤷🏻‍♂️

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