/ Money, Shopping

Would Clubcard points tempt you to bank with Tesco?

Tesco has announced plans to launch a current account next autumn that will give customers Clubcard points when they use their debit card. Would you bank with your supermarket in exchange for loyalty incentives?

It feels like you can hardly move for Tesco stores these days and that every closed-down pub or restaurant is reincarnated as yet another Tesco Metro. And now the supermarket plans to increase its reach even further by launching a current account under its Tesco Bank brand.

With 15 million Clubcard holders, including 6.5 million regular users, there are a lot of people who could take advantage of a Tesco points incentive for using their debit card. However, we still don’t know what the exact deal will be, so it’s difficult to judge whether the account is a tempting proposition.

Will a Tesco Bank account be worth it?

In an interview with the Mail on Sunday, Tesco Bank’s boss Benny Higgins said the account would be more transparent than others, but it hasn’t been decided whether you will have to pay a monthly fee for it. This will be the key to whether it truly offers good value, as it doesn’t matter how many Clubcard points you earn if the monthly fee outweighs the rewards you get.

Our research has shown that ‘packaged’ accounts (those with a monthly fee) rarely give you benefits that are worth their cost when you consider how many of them you will actually use. At least with the Tesco Bank current account, it should be easier to work out exactly whether any monthly fee is worth paying if the Clubcard points are turned into money off your shopping.

Marks & Spencer launched its own current account in September with a monthly fee of £15 or £20 with family travel insurance. Benefits include M&S Café hot drink vouchers worth £127, £40 of M&S vouchers, £45 to spend on specific items in M&S and loyalty points when you use your debit card in M&S. That’s all great if you spend most of your time in M&S, but perhaps not such a good deal for everyone else.

A sweep of supermarket banks

It seems to me you could be quids-in by taking out a supermarket current account if you regularly shop there, as you can easily use the rewards you get. But I think it’s unlikely that people who don’t have a local Tesco or M&S store will go out of their way to visit them, just to use their account rewards.

On the other hand, any new model for banking that challenges the status quo should be welcomed, as long as it gives at least some people a better deal. So are supermarkets the future of banking? Are you happy to see these new entrants into the current account market, or should supermarkets stick to what they know?


You haven’t said who will be administering this bank, will it be Tesco’s itself or will they be outsourcing to one of the other banks, with just Tesco counter staff?

Either way, I wouldn’t touch it. They can’t even remove special offer prices tags from the shelves in a timely manner. ( Found 2 today that ran out 2 days ago and I wasn’t looking for faults, its just too easy to find them ).

par ailleurs says:
11 October 2012

Short answer…no.
Longer answer…no,not till Hell freezes over.
What good would clubcard points be in the greater scheme of things? i want an honest bank that deals ethically. I’ll stay with the Co-op Bank thanks.

I’d never change to Tescos – no shops near enough. I would only change to Sainsburys if they offered permanent club card points AND everything First Direct already offers as standard – and they won’t.

Hell will freeze over for me too before I have any dealings with Tesco.


Sybilmari says:
12 October 2012

I had Tesco insurance once and they were so dishonest in dealing with it I had to fight through the Ombudsman to get the claim paid out and it took 2 years. I have never gone near Tesco since and would definitely not trust them as bankers.

We need to know which bank is behind this in order to make a rational decision. The fact that Bank of Ireland is behind the Post Office has put me off from using them.

Gerard Phelan says:
12 October 2012

Supermarkets do have the advantage of being to innovate and unless operating as a reseller of another bank are not limited by the way banking has always been done… HOWEVER their record in practice is not good. Tesco have been here before. I opened one of their Savings accounts in 1997. It started out very well, but by 2002 the interest rate was rubbish – one of the ‘old banking practices’ they decided to follow, so I took my money away.

Not seeing this as a generic problem I took out a Safeway ISA in 2003. That also started out well, but when Safeway was bought by Morrisons in 2004 the ISA was transferred to Abbey. Before long it was paying 0.1% interest, so that money had to be removed as well.

Ever the optimist, I applied for a Sainsbury savings account in 2009, when it was market leading. In this case Sainsbury took so long to process my application, that I was in the middle of Christmas when the approval came through and the start-up date expired before I could give it any attention.

So I will NOT be rushing towards another supermarket…UNLESS John Lewis / Waitrose get involved. They are trustworthy people!

It seems that I’m in a minority. I’ve had a savings account with Tesco Bank for years, and have found them efficient and helpful – and with lovely Glaswegian accents!

Joey :) says:
15 October 2012

I for one will be rushing to Tesco once they launch they’re current account. I have had a Tesco clubcard since I moved out at 18, I’m now 25. I have been shopping at Tesco and had savings and insurance with them for years. I have a Tesco ClubCard MasterCard (credit card) which I use every day and pay off at the end of the month. I have a savings, car and home insurance policies and my dog is covered by them too. I find Tesco efficent and trust worthy, I currently bank with NatWest and HSBC. Would keep HSBC though xx

ive had a tesco websaver some years and the interest rate paid has been good – until recently – so i closed it today. they still offer 2.6% but they are on the common ploy of making you close and then open a new account – they win on consumer inertia.

i wont take a tesco current account as i suspect their IT software is a big mess – and that is important.

ive had a halifax current account over 30 years and while i know they are poor at many things the current account works very well.

richard says:
5 October 2013

I have had a halifax easy cash account for 10 years and have had nothing but problems with them they will not allow me to have an autherised overdraft of £100.00 they will not let me upgrade to a better account ,i have paid over 900.00 in bank charges this year alone ,as some payments go out a when its a day or 12 hours before my salery enters my account, i end up paying a £40.charge ,so yes i am looking for a better account i do not need a cheque book just a debit card ,standing orders & dd,faster payment system that allows me to use atm free of charge any ideas for a better account with some one else ,its so difficult to find what you need as my credit score is not brilliant but getting better all the time