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Tesco Bank to close all current accounts

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In January 2020, Tesco Bank suspended new applications for its current account. It has now gone a step further and announced that all existing Tesco Bank current accounts will be closed on 30th November.  

Take a look on its website here.

The reason this account was popular with Head for Points readers was that it was possible to earn Avios or Virgin Flying Club miles with your day-to-day DEBIT card banking.

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

The ‘1 point per £1’ spent in Tesco was a very generous benefit.  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.

It even worked with payments to the Inland Revenue.  It was one of the few ways of profiting from tax payments. This route became less interesting to HfP readers when the Tesco / Avios partnership ended in January 2021.

Making the announcement yesterday, Tesco Bank said that only 12% of its 213,000 current accounts were being used as ‘primary’ accounts.

If you are a Tesco Bank current account holder, you will receive a letter over the next two weeks setting out what you need to do.


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

If you are looking to apply for a new credit or charge card, here are our September 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.

The following offers will end soon:

  • 2,000 Virgin Points on Virgin Atlantic Reward Mastercard (ends 15th October)
  • 30,000 Virgin Points on Virgin Atlantic Reward+ Mastercard (ends 15th October)
  • 10,000 Avios on British Airways American Express (ends 2nd November)
  • 40,000 Avios on British Airways American Express Premium Plus (ends 2nd November)
  • 60,000 points on The Platinum Card from American Express (ends 2nd November)
  • 30,000 points on American Express Preferred Rewards Gold (ends 9th November)

Here are the top current deals:

British Airways BA Amex American Express card

British Airways American Express

10,000 Avios for signing up, no annual fee and an Economy 241 voucher for spending ….. Read our full review

British Airways BA Premium Plus American Express Amex credit card

British Airways American Express Premium Plus

40,000 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 – 30,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

60,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Virgin Rewards credit card

Virgin Atlantic Reward Mastercard

The UK’s most generous free Visa or Mastercard at 0.75 points / £1 Read our full review

Virgin Rewards Plus credit card

Virgin Atlantic Reward+ Mastercard

30,000 points bonus and the most generous non-Amex for day to day spending 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

60,000 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 (64)

  • NickC says:

    Luckily I switched my Tesco current account to a Virgin one recently for a free case of wine. Would recommend this course of action.

  • Andrew says:

    The London NH hotel is very overpriced compared to its competitors’ mid-market hotels nearby.

  • Froggee says:

    So where to switch to for Tesco Bank? Just like the announcement says it’s very much my secondary current account. I just like the idea of having a backup in case HSBC get hacked!

    • Nick says:

      Purely coincidental but I recently switched my Tesco account to Virgin and bagged the free case of wine.

    • John says:

      I think Tesco uses HSBC for clearing so not the best backup choice in the the worst theoretical scenario.

      I’ve only ever used the account for shopping or filling up in Tesco, and keeping £3000 in it when they paid 3%. Only exception was before curve I used it to buy a car from cargiant.

      • RussellH says:

        I would have assumed that Tesco use Royal Bank of Scotland, not HSBC. Tesco Bank was a joint venture with the Royal Bank to start with, and ATM withdrawals at Tesco still show up on my Royal Bank a/c as Royal Bank withdrawals.

        • DeB20 says:

          Tesco Bank was set up by a team from HSBC as a special project. One other reader of this site ran that project.

          Unlike M&S Bank, it was managed beyond the proverbial arm’s distance. Not sure of their current arrangements but both HSBC and RBS provide other banking services to Tesco.

          • Andrew says:

            And it’s full of ex HBOS staff.

          • RussellH says:

            Odd that a JV including The Royal Bank would actually be set up by HSBC, no?
            VERY odd, I would have thought.

          • Will says:

            Tesco Bank hasnt been a joint venture with RBS since 2008. Since then Tesco Bank has merely paid for use of some of their backend systems to support their credit cards (which is why the statements are the same design as Natwest Group’s).

            The current accounts definitely used HSBC to clear. A good clue is the sortcode starting with 40 (which is an HSBC range). They clearly had their own customer facing setup tho, hence annoyances like Faster Payments not being instand (whereas they are on HSBC, FD, M&S).

  • Nick says:

    I also have £100 back on £300 spend at the Maybourne Hotel Group, which includes Claridge’s, The Connaught & The Berkeley in London.

  • Adam says:

    Not surprised the double Club card gravy train is coming to an end. Will Tesco be continuing to honour the additional point per £ at Tesco until the accounts close on 11/30?

    • Jonathan says:

      I doubt there’ll be any major changes since the account(s) won’t exist within 6 months

  • Blenz101 says:

    The loss of the Tesco debit card is a great shame but I guess after they closed to account to new applicants it was always on borrowed time. Just a real shame they couldn’t come up with a new product that offered any ongoing clubcard points.

    Will miss my 30k point per quarter which NS&I was able to deliver for just moving a chunk of cash through the account once a week.

    Good whilst it lasted and provided plenty of hotel.com rooms even after Avios left the scene.

    • Ian_H says:

      There IS a debit card replacement already and Rob has covered it here:

      https://www.tesco.com/zones/clubcardpay

      Works like a “pre-paid” i.e. you top it up to use it but you still earn your points.

      • Jimmy says:

        Didn’t know this. This looks like an exact replacement for the track debit card excepting you have to deposit first.

        Don’t remember seeing robs article. Will have to find it.

      • Blenz101 says:

        Yes but it specifically excludes the key places for MS in the terms of the card.

        The hassle of topping up a prepaid card for such a terrible earning rate doesn’t make it worth the hassle.

      • Genghis says:

        and rubbish in Tesco too, isn’t it?

    • Mike says:

      Yes v sad this was very useful as a MS card just to cycle cash through NSI to generate lots of club card points for avios / virgin points.

    • Max says:

      How did you get 30k points per quarter through NS&I?

      • Blenz101 says:

        Pay in £20k per week into a direct saver and withdraw it at the first available opportunity the following week. Rinse and repeat.

        Need to be smart enough in how you structure it as not to trigger KYC or other fraud prevention triggers.

        • Ryan says:

          Been a comfortable £5k a week and no issues with KYC

          KYC from who… NSI or Tesco?

  • James says:

    Just a heads up Rob that the Inland Revenue hasn’t existed since 2005!

    • Mike says:

      In that case who has been taking a vast amount of my money !!!

    • Guernsey Globetrotter says:

      Shame they re-branded. It put an end to that favourite joke of tax accountant’s from comedy genius Ken Dodd : ‘I told the Inland Revenue that I didn’t owe them any money – I live by the seaside!’ 🙂

  • Jimmy says:

    Agreed of this card is terrible news for flyers

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