Got a Tesco credit card? Will you be disqualified from Barclaycard Avios bonuses?

If you have a credit card, personal loan, savings or Clubcard Pay+ account with Tesco Bank, you will have received multiple communications in recent weeks about the sale of Tesco Bank to Barclays.

The transfer is due to complete on 1st November 2024.

This could prove an issue for holders of Tesco credit cards, which many HfP readers have due to the ability to convert Clubcard points to Virgin Points and, before 2021, Avios.

The documentation sent by Tesco Bank explains the issues you may have with a savings account, since you may lose certain protections if your combined Barclays and Tesco Bank savings accounts exceed £85,000.

What is not mentioned, however, is the potential risk to Tesco Bank credit card holders.

Barclays issues two Avios branded credit cards with large bonuses

As most HfP readers know, Barclaycard issues two very generous Avios-branded Mastercard credit cards.

The free card: Barclaycard Avios Mastercard

The representative APR is 29.9% variable.

The benefits are:

• No annual fee
• A sign-up bonus for new Barclaycard customers of 10,000 Avios if you spend £1,000 in three months – this is a special offer until 26th September and is double the usual bonus of 5,000 Avios
• You earn 1 Avios per £1 spent
• You earn a British Airways cabin upgrade voucher if you spend £20,000 in a card year

You can apply here.

The paid card: Barclaycard Avios Plus Mastercard

The representative APR is 80.1% APR variable, including the annual fee.  The representative APR on purchases is 29.9% variable.

The benefits are:

• A £20 per month fee (reduced to £15 for customers who hold Barclays Avios Rewards via a Barclays Premier current account)
• A sign-up bonus for new Barclaycard customers of 25,000 Avios if you spend £3,000 in three months
• You earn 1.5 Avios per £1 spent
• You earn a British Airways cabin upgrade voucher if you spend £10,000 in a card year
• You can buy airport lounge passes for lounges in the DragonPass network for the discounted price of £18.50 per person per visit

You can apply here.

Note that the fee is paid monthly and you can downgrade to the free card via the Barclaycard app as long as the option is showing.

If you don’t have an Avios card, you may soon have a problem

Barclays has strict rules about whether you can receive the sign-up bonus on a Barclaycard Avios credit card.

If you previously had any other Barclays-issued credit card:

• You WILL receive the sign-up bonus on a Barclaycard Avios Mastercard as long as you cancelled your previous card at least six months ago.

If you currently hold any other Barclays-issued credit card:

• You will not qualify for a sign-up bonus on the Avios cards. You need to cancel your existing card and wait for six months. The only exception is if you are offered a targeted switching bonus in the Barclaycard app. Hilton cardholders will never be offered a switching bonus due to the terms of the contract between Hilton and Barclays.

What does this mean for holders of Tesco credit cards?

On the face of it, as soon as the Tesco Bank credit cards transfer to Barclays on 1st November, holders of Tesco credit cards will be excluded from getting a sign-up bonus on a Barclaycard Avios credit card.

You would need to cancel your Tesco Bank credit card and wait six months. Once the six month period is over, Barclays will treat you as a ‘new’ credit card customer again and you could receive a bonus on a Barclaycard Avios credit card.

The snag, of course, is that if a special sign-up promotion comes along for the Barclaycard Avios credit cards during this six months – or before you even got around to cancelling your Tesco Bank credit card – you will probably be stuck.

What should you do?

We have tried, and failed, to get clarity from Barclays about whether Tesco Bank credit card holders will be treated as ‘existing’ Barclaycard customers if they apply for an Avios card.

Without clarity, you should assume the worst.

So ….

• if you have a Tesco Bank credit card

• …. and you don’t have a Barclaycard Avios credit card

• …. and you think you might apply in the future, especially if a good sign-up bonus appeared

…. then you should either:

• apply for a Barclaycard Avios credit card BEFORE 1st November, when your Tesco Bank credit card becomes a Barclaycard or

• cancel your Tesco Bank credit card BEFORE 1st November, so that you never become a Barclaycard customer by default and don’t exclude yourself from any future Barclaycard Avios bonuses

There is no need to rush into anything as the transfer is still over two months away.

I am hoping that, before 1st November, Barclaycard may be able to give us a definitive verdict on whether Tesco Bank credit card holders will become excluded from Barclaycard Avios bonuses or not.

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Want to earn more points from credit cards? – October 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 22nd October 2024, the bonus on American Express Business Platinum is increased to up to 80,000 Membership Rewards points, worth 80,000 Avios. You will receive 8 points per £1 spent for the first three months, on up to £10,000 of spending. Click here to read our full card review. Click here to apply.

SPECIAL OFFER: Until 22nd October 2024, the bonus on American Express Business Gold is increased to up to 40,000 Membership Rewards points, worth 40,000 Avios. You will receive 4 points per £1 spent for the first three months, on up to £10,000 of spending. The card is FREE for your first year. Click here to read our full card review. 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 when you spend at least £2,000 per month.