Is Clubcard Pay a replacement for your Tesco Bank current account debit card?

On Tuesday, we covered the decision by Tesco Bank to close all of its 200,000+ current accounts.

This was a popular product with HfP readers, albeit not with the wider world, because you earned 1 Clubcard point for every £8 spent on your debit card. This was an easy way to run up points when paying HMRC.

If you were using your Tesco Bank debit card to earn points, there is an alternative product for you – Clubcard Pay.

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 (HMRC appears OK), 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

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.

What rewards would I receive?

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.

However, 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.

Readers have confirmed that it does work when paying HMRC. 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 on the underlying card you link to Curve.

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. We wrote a longer article on Clubcard Pay and how it works here.

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Want to earn more points from credit cards? – April 2024 update

If you are looking to apply for a new credit card, here are our top recommendations based on the current 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:

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.

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:

SPECIAL OFFER: Until 12th May 2024, the Capital on Tap Business Rewards Visa card is offering a bonus of 30,000 points, convertible into 30,000 Avios. You must have a Limited Company to apply. Click here to learn more and click here to apply.

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.