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.
Want to earn more points from credit cards? – May 2022 update
If you are looking to apply for a new credit or charge 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. 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.
The Platinum Card has doubled its sign-up bonus to 60,000 Membership Rewards points, which convert to 60,000 Avios or other airline miles, if you apply by 1st June 2022.
British Airways American Express Premium Plus
25,000 Avios and the UK’s most valuable card perk – the 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 £12,000 Read our full review
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
The Platinum Card from American Express
60,000 points (SPECIAL OFFER) 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 Platinum
40,000 points sign-up bonus and a long list of travel benefits Read our full review
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
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
10,500 points bonus – the most generous Avios Visa 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.