Tesco Credit Card
The Tesco Credit Card is one of the most popular credit cards in the UK. Officially deemed the Tesco Clubcard Credit Card, this is a Tesco customer loyalty scheme. The Tesco Credit Card doubles up as the your Clubcard, meaning only one card in your pocket, there’s a wide range of other benefits including:-
- Collect 1 Tesco Clubcard point for every £4 you spend on the credit card anywhere in the world
- Shop at Tesco, as well as 1 point for every £4 you spend, collect ordinary Clubcard points as well
- Buy fuel at Tesco filling stations, get double Clubcard points & 1 point per £4 of expenditure
- Introduce a friend to the Tesco Credit Card and each get 1000 Clubcard points
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Tesco Clubcard Credit Card | 0% on purchases for 15 months & balance transfers for 9 months | 2.9% | 16.9% APR |
Doubles as Tesco Clubcard Wide variety of rewards on spending Points can be converted to Avios Allows £ transfers to your bank account
No interest free period on money transfersLike many loyalty schemes, you need to compare the overall benefits structure of the Tesco card to your personal spending profile to see what the rewards may mean to you. As a general rule shopping in Tesco’s stores with the Tesco credit card earns you 2 points for every £1 spent. Each point you accumulate is worth just £0.01p towards in store shopping.
Each £5 voucher can be worth up to £15.
If you exchange the normal vouchers which the points generate (these are sent out by post every 3 months) for Clubcard Rewards vouchers (which you can do in your local store or online) each £5 voucher can be worth up to £15.
The Tesco Credit Card is issued by Tesco Bank, which up until recently was known as Tesco Financial Services.
Tesco Credit Card from Tesco Bank – more Corporate information
Originally a joint venture between Tesco and NatWest (now part of RBS) Tesco Personal Finance was set up in 1997 as a response to Sainsbury’s launching its own banking brand. The Tesco Credit Card was one of its first products.
The company has grown swiftly and profitably and even opened its first proper branches within Tesco’s stores in 2010. In 2011 it has expanded into new financial products including a wide variety of insurances, current accounts and even mortgages which it can cross sell to it’s large and already loyal customer base.
Its phenomenal success is partly due to extremely low consumer confidence in the traditional High Street banks as a result of the credit crunch. Tesco Bank now boasts some 6.5 million customers across its products. The Tesco Credit Card currently has 2.7 million holders in the UK.
Tesco Bank markets the Tesco Credit Card and its 27 other products and services through multiple channels including online, by telephone and of course via its 2700 + stores. Tesco Bank’s online presence accounts for approximately 62% of new product sales.
Offering Clubcard points on its financial products like the Tesco Credit Card means Tesco continues to persuade its customers to spend money on its very profitable non-food products further growing its market share.
Tesco took full control of the company when it bought out RBS’s original 50% stake in 2008 for £950 million, and Tesco’s banking arm is now one of the best performing parts of its business. Its now by far the largest supermarket bank with customer number approaching 6.5 million. Straightforward sales figures released on 14th June 2011 showed sales in the period up to 28th May up some 19.9%, partly due to the success of the Tesco Credit Card.
Sales for the Group business (excluding petrol and diesel sales) were only up 6.7%. Some commentators feel that Tesco’s future is unexciting because hasn’t got much more room to grow in the UK, but they’re seriously missing the point. Overseas Tesco saw a rise in sales of 9.3%, with the USA seeing the most significant growth of over 20%. Imagine the Tesco Credit Card being in the pockets of all those American shoppers!
Asia and Europe also saw sales grow 8.6 and 9.5 per cent respectively. Growth is significant in markets like the Czech Republic and Slovakia. Tesco Bank now contributes also £1 billion to Tesco Group revenues, and around £265 million worth of profit.
Tesco Bank now has over 600 members of staff at its Head Office site in Edinburgh, as well as 800 at its new facility at Quorum Business Park, Newcastle. As well an marketing and managing the UK portfolio of products, it also supports partner banks in delivering Tesco branded financial products in countries where Tesco has a presence like Ireland, Thailand, Poland and Malaysia.
In terms of interim results, Tesco Bank saw good business growth during the first half of 2011. Net income increased by 9% before the additional PPI provision (relates back to the PPI misselling scandal which hasn’t affected Tesco too badly; read our comprehensive PPI Mis-selling Guide) and baseline Bank trading profit – that is before all key provisioning movements, including PPI, and before fair value – grew by some 24% to £89 million.
