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 & get 5 points per £4 you spend
  • Introduce a friend to the Tesco Credit Card and both get 1000 Clubcard points

Card Introductory Offer Balance Transfer Fee Representative APR (Variable)
Tesco Balance Transfer Credit Card 0% on balance tranfers for 18 months, and on purchases for 3 months 3.95% 16.9%
APR
Key points View card rates
plus 0% on balance transfers for 18 months
plus Doubles as Tesco Clubcard
plus Points can be converted to Avios
plus Allows £ transfers to your bank account
minus No interest free period on money transfers
minus High balance transfer fee
Key Selling Point
Lots of Tesco Clubcard points, plus great balance transfer and purchases offers
Balance Transfer Limit £
Subject to Status
ATM £ Cash Charge
3% min. £3
Surcharge on Overseas Transactions
2.75%
ATM £ Cash Charge Abroad
3% min. £3
Minimum Repayment Amount
£5
Minimum Repayment Percentage
3%
Maximum Credit Limit
Subject to Status
Recommended Minimum Age
18
Recommended Minimum Income
£5,000
Annual Fee
No
Annual interest rate on purchases
16.945% >
Annual rate on balance transfers
18.268% >
Annual interest rate on cash advances
24.942%
Credit rating needed
Average
Representative example: 16.9% APR (variable). Based on credit limit of £1,200 & a purchase rate of 16.9% (variable). Credit limit varies depending on your circumstances.
Tesco Clubcard Credit Card 0% on purchases for 16 months & for 9 months on balance transfers 2.9% 16.9%
APR
Key points View card rates
plus Great 'dual' offer
plus Points can be converted to Avios
plus Allows £ transfers to your bank account
plus Loads of Tesco Clubcard points
minus No interest free period on money transfers
Key Selling Point
Long 16 month 0% on purchases offer, and lots of Clubcard points!
Balance Transfer Limit £
Subject to status
ATM £ Cash Charge
3% min. £3
Surcharge on Overseas Transactions
2.75%
ATM £ Cash Charge Abroad
3% min £3
Minimum Repayment Amount
£5
Minimum Repayment Percentage
3%
Maximum Credit Limit
Subject to status
Recommended Minimum Age
18
Recommended Minimum Income
£5000
Annual Fee
No
Annual interest rate on purchases
16.945% >
Annual rate on balance transfers
18.268% >
Annual interest rate on cash advances
24.942%
Credit rating needed
Fair to good
Representative example: 16.9% APR (variable). Based on credit limit of £1,200 & a purchase rate of 16.9% (variable). Credit limit varies depending on your circumstances.

Tesco Credit Card Guide

Like 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 1 points for every £2 spent. Each point you accumulate is worth just £0.01p towards in store shopping.

Each £5 voucher can be worth up to £15.

Doesn’t sound too generous so far does it! However, 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.

You can now also exchange your Tesco Clubcard vouchers for Avios (the new name for Airmiles). Getting Avios flights and rewards is as easy as doing your shopping, you can can exchange your Clubcard points for Avios via the Tesco online portal.

Tesco credit card – Useful tip!

The Tesco credit card has another benefit that’s less well known. Currently the card boasts an introductory offer of 0% on new purchases for 9 months which is an excellent and market leading deal. But what happens once you’ve already had the Tesco card for 9 months and want to make purchases of other big-ticket items?

Well new purchases are then subject to interest if you don’t clear your balance at the end of every month.

However if you use your Tesco Clubcard Credit Card to make purchases of items priced at over £250 from the Tesco direct catalogue or website, you benefit from a “Buy Now – Pay Later” facility meaning you get 6 months interest free credit on those items!

Tesco Credit Card from Tesco Bank – key corporate information

  • The Tesco credit card is issued by Tesco Bank, which up until recently was known as Tesco Financial Services.
  • 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, and even mortgages.
  • 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. It has a key advantage over the high street banks in that it can market it’s services to it’s 16 million Tesco Clubcard holders.
  • Tesco has recently delayed the launch of its new current account until 2013 when it can take advantage of new legislation controlling UK bank accounts. The Independent Commission on Banking last year recommended changes to improve the system by which customers can switch bank accounts. The Government has promised a new free redirection service which is due to be online by September 2013.
  • 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 mis-selling 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.
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