Tesco Premium Credit Card: Is It Worth the Fee?
Tesco Premium Credit Card: Is It Worth the Fee?
Good for
- Paying no interest on purchases for up to 6 months
- Earning extra Tesco Clubcard points for Tesco shopping
- The chance to earn an annual bonus of 5,000 Clubcard points
Bad for
- Those wanting to earn good rewards on their other (non-Tesco) spending
The guidance on this site is based on our own analysis and is meant to help you identify options and narrow down your choices. We do not advise or tell you which product to buy; undertake your own due diligence before entering into any agreement. Read our full disclosure here.
Note: The Tesco Premium credit card is no longer accepting new applications.
The Tesco Premium Credit Card is a rewards credit card for big spenders at Tesco, but unless you find extra value through the free travel insurance we think the card is too expensive, despite an annual 5,000 Clubcard bonus (earned with annual minimum spend of £5,000). The Premium card costs £150 per year, one of the highest annual fees in the UK credit card market. Cardholders who will access the free travel insurance—which is equivalent to Tesco Bank Travel Insurance's mid-tier Standard plan, including Winter Sports cover and worth an estimated £40 to £200—can find good value in the card, however.
Clearly it depends on your personal spending preferences, but you should also be aware of the sister Tesco Purchases card which offers lower rewards and no travel insurance but has no annual fee.
Tesco Premium Credit Card Review
While at first it seems like the Tesco Premium Credit Card provides a decent 1% of additional rewards to Clubcard members on their Tesco shopping (beyond the 1% earned as part of Clubcard loyalty membership, regardless of payment method), it is not worth the £150 annual fee for most shoppers. Despite the 5,000-point annual bonus, you’d have to spend £10,000 a year at Tesco just to cover this annual fee. Beyond this, the rewards on non-Tesco shopping are poor.
| Rewards on Annual Tesco Spend of £10,000 | |
|---|---|
| Premium Card Rewards | + £100 |
| Value of Annual Bonus | + £50 |
| Annual Fee | - £150 |
| Net Annual Rewards | £0 |
Some cardholders can find good value with the Premium card through free travel insurance and by utilizing Tesco’s Clubcard Boost program. Clubcard Boost lets you redeem your Tesco vouchers for up to 4X their value at Tesco’s retail partners, which include Pizza Express and Odeon.
Bottom Line: This card only makes sense for those who can make use of the free travel insurance; otherwise the annual fee is too high to justify.
Tesco Premium Benefits & Features
| Tesco Premium Credit Card Features | |
|---|---|
| Earning Clubcard Rewards |
|
| Annual Bonus | Earn 5,000 Clubcard points when you spend £5,000 at Tesco a year (includes in store, online and Tesco fuel) |
| Free Travel Insurance | For primary cardholders under the age of 70 and their immediate family; Covers trips up to 31 days and 17 days of winter sports |
| Annual Fee | £150 |
| APR (variable) | 19.9% on purchases |
How do Tesco Clubcard Points Work?
Rewards on Tesco credit cards come in the form of Clubcard points. When you use your Tesco Purchases Credit Card, you’ll earn an additional 1 Clubcard point for every £4 spent (£4 minimum) at Tesco and 1 Clubcard point for every £8 spent (£8 minimum) elsewhere. Clubcard points are turned into vouchers with the value of 100 points = £1 of vouchers, and are sent to you every three months.
These vouchers can be used at Tesco (in-store, on-line, or at the pump) or can be used at a number of Tesco Clubcard Partners. Redeemed with these partners, your vouchers may be "boosted" by up to 4x their value. For instance, using Clubcard Boost, a £2.50 Tesco voucher may be worth £10 off at Pizza Express. Other partners include Odeon, Cineworld, Goldsmiths, Red Letter Days, Figleaves, Spafinder, Good Housekeeping Magazine, and Elle Magazine.
You need to collect 150 points in any three-month collection period to receive a voucher. If you have fewer than 150 points, they will be carried over into the next collection period.
The Tesco Purchases credit card doesn’t allow you to collect points on all purchases at Tesco. There are some exceptions, including the following:
Categories That Do NOT Earn Tesco Clubcard Points
- Tobacco
- Lottery
- Stamps
- Prescription medicines
- Tesco gift cards
- Infant formula milk
Tesco imposes a rewards cap of 30,000 per 3-month collection period, but we don’t expect this will affect most shoppers. Given the Premium card’s rewards rate of 1 point per £1 spent at Tesco, plus your usual Clubcard earnings of 1 point per £1 spent at Tesco, you’d have to spend £5,000 a month at Tesco to hit this cap. (£5,000 spent a month * 2 points/£1 spent = 10,000 points a month to hit the cap).
Free Tesco Credit Card Travel Insurance
We estimate that the Premium card's free travel insurance may be worth between £40 and £200, depending on geographical cover, whether you would benefit from the Winter Sports cover and the size of your travel group.
An analysis of the features of the Premium card's free credit card travel insurance shows it is equivalent to Tesco Bank Travel Insurance's mid-tier Standard offering, including Winter Sports cover. We gathered quotes for Tesco's Standard plan for an individual and for a family of four to get a general idea of the value of the free insurance offer. As you can see in the table below, the potential value of this free travel insurance varies widely depending on where you travel, if you'd normally buy Winter Sports cover and whether you travel as an individual or a family.
Estimated Value of Tesco Premium Credit Card Insurance
| Geographical Cover Area | Annual Premium | Winter Sports Add On | Total Premium | |
|---|---|---|---|---|
| Individual (30 years of age) | Europe | £42 | £10 | £52 |
| Worldwide excl. USA, Canada & the Carib. | £73 | £18 | £91 | |
| Worldwide | £92 | £23 | £115 | |
| Family of Four | Europe | £74 | £18 | £92 |
| Worldwide excl. USA, Canada & the Carib. | £130 | £32 | £162 | |
| Worldwide | £163 | £41 | £204 |
A family of four who would purchase travel insurance including Winter Sports cover may glean a value around £90 for cover in Europe, £160 for Worldwide cover excluding America, Canada and the Caribbean or £200 for Worldwide cover. Those who don't need Winter Sports cover would find the insurance to be less valuable, anywhere from around £70 to £160.
Individual travellers would extract less value from the free insurance than families. Including Winter Sports cover, travellers may find the insurance to be worth £50 to £115, depending on geographical cover.
These sample quotes may be different than quotes you are offered, as the insurance market changes regularly. Please use this information as a general guide only.
How does the Tesco Premium Credit Card Compare to Other Credit Cards?
To better understand the value of the Tesco Premium credit card you need to compare it to other available options. We compared this card to other rewards cards so you can see which is better suited to your shopping habits.
Tesco Premium Card vs. Tesco Purchases Card
The Tesco Purchases Credit Card offers mediocre additional rewards of 0.25% on Tesco shopping and fuel, and quite poor rewards of 0.125% on other everyday shopping. Those willing to spend the time managing the Clubcard Boost program can create a bit more value.
Quick Takeaway: If you have your heart set on a Tesco credit card, the average user will find more value with the no-fee Purchases card than the £150 per year Premium card. The exception to this is if you will use the worldwide family travel insurance offered on the Premium card. It depends how much you value this feature.
Tesco Premium Card vs. Sainsbury’s Nectar Purchase Card
The Sainsbury’s Nectar Purchase Card is a solid grocery rewards credit card. The card returns an additional 1% on Sainsbury’s shopping, matching the extra rewards of the Tesco Premium Credit Card. However, the Sainsbury’s card has no annual fee. Additionally, the Sainsbury's card offers 29 months of no interest on purchases, a good way to spread out the cost of upcoming purchases.
Quick Takeaway: For most cardholders, the £150 per year Tesco Premium card can’t compete financially against the Sainsbury's free card, unless you'll find value in the Tesco Premium's free travel insurance.