Tesco Bank rolls out Tesco Clubcard Pay+ for all customers - is it worth trying?

Tesco Bank has introduced its new Tesco Clubcard Pay+ bank account, offering a new way to earn extra Clubcard points, stick to a spending budget and make savings round-ups.

The account has been available on a limited basis since March 2021, but is now being rolled out to all Tesco Clubcard members.

The wider launch comes after Tesco Bank closed all of its current accounts at the end of November 2021.

Here, Which? explains what Tesco Clubcard Pay+ offers, and how it compares to other bank accounts on the market.

What does the Tesco Clubcard Pay+ offer?

For anyone who misses their old Tesco Bank current account, Tesco Clubcard Pay+ isn't a straight replacement, but it does offer several features you may find useful:

Prepaid debit card

Tesco Clubcard Pay+ cannot function as your main bank account. It comes with a debit card, but you'll have to load money onto this from another UK bank account using the Tesco Bank app.

Spending on this card will rely on you remembering to top it up, but having a prepaid card like this can be beneficial to those trying to stick to a budget and limit their spending.

While you might want to reserve this cash for your grocery shopping at Tesco, you can also use the Tesco Clubcard Pay+ card anywhere that accepts Visa Debit - and you can pick up Clubcard points even if you're not shopping at Tesco.

Note that, while there's no overdraft on this account, your balance may go below zero if a retailer accepts the card payment when you don't have enough money in your account. If this happens, you should be sent an SMS alert telling you to immediately top-up your account to zero. If you don't, your account may be suspended and closed.

Tesco Clubcard points

The Tesco Clubcard Pay+ debit card also acts as your Clubcard, so you can earn points as usual when you spend.

When you spend anywhere that's not Tesco, you'll earn one Clubcard point for every £8 you spend.

For the first 100 days after opening your account, you'll earn two Clubcard points for every £1 you spend on qualifying products in Tesco, and on Tesco Fuel (excluding Esso). After this time, you'll go back to earning one Clubcard point per £1 spent.

Note that this is only the case if you use the Clubcard Pay+ debit card directly; if you have it loaded onto a Curve card (which offers a way to have all your cards on one card) for instance, you only collect one point per £8 spent.

There are a few exclusions to bear in mind, where you won't earn Clubcard points:

• refunds
• debit card transactions of £100,000 or more
• paying for bills at banks or other financial institutions
• paying for gambling
• buying travel money
• purchasing foreign currency
• paying funds into savings accounts, including NS&I accounts
• purchasing shares, or making a deposit into a share-dealing account.

Savings round-ups

Tesco Clubcard Pay+ comes with a round-up savings feature.

This rounds up your transaction to the nearest pound, and deposits the difference into a separate savings account paying a variable rate of 0.25% AER. Interest is paid annually and at closure.

While there's a transfer limit of £100,000, you can make an unlimited number of withdrawals from your round-up savings to the main part of your Pay+ account, or to the linked UK bank account you use to place money on your card. If you want to move the money to a different UK bank account, you have to call Tesco Bank to request it.

How does Tesco Clubcard Pay+ compare?

If you're not sure whether Tesco Bank's latest product is for you, we've weighed up how its features compare with other accounts on the market.

Cashback options

If the main appeal of the Tesco Clubcard Pay+ account is earning points for your spending, some other accounts that pay cashback may be worth considering.

For instance, Barclays Blue Rewards allows you to earn £7 a month in cashback when you set up two direct debits, pay in at least £800 a month, and cover its fee of £4 a month. There's extra cashback to be earned if you hold other Barclays financial products.

Alternatively, the app-only account Chase by JP Morgan offers 1% cashback on spending for the first 12 months, and it's fee-free. There are no debit card fees on transactions or ATM withdrawals abroad.

• Find out more:best bank accounts for cashback

Savings interest

While lots of accounts now offer a saving round-ups feature, there aren't many that pay interest on what you save.

Chase by JP Morgan pays significantly more on savings round-ups, with a variable rate of 5% AER - however, whatever you've earned is transferred back to your current account each year, so you're limited in how much you can accrue.

You could also earn more interest with a standard instant-access savings account; currently, the top rate on offer is 0.67% AER.

• Find out more:how to find the best savings account

Is your money safe?

The money you load onto your Tesco Clubcard Pay+ card is held by Tesco Bank, which is protected by the Financial Services Compensation Scheme (FSCS) up to a total of £85,000.

However, this protection applies to all money held with Tesco Bank, so if you also hold a savings account or Isa with the provider you should make sure you don't have more than £85,000 saved - anything over this amount won't be covered if the bank were to go bust.

• Find out more:FSCS - is my money safe?

Should you get a Tesco Clubcard Pay+ account?

Perhaps the most important consideration is how often you're likely to spend at Tesco; there's little point in being offered the chance to earn double Clubcard points at Tesco if you barely shop there.

You'll also need to weigh up how easily you'll be able to keep track of an extra debit card and account - this needs to be opened in addition to your main bank account, as you can't set up direct debits, standing orders or make BACS payments.

You should also avoid using the debit card if you go abroad, as you'll incur a 2.75% foreign exchange fee for all transactions made outside of the UK; ATM withdrawals made outside of the UK in foreign currencies (excluding Euros) will be charged an additional 1% cash withdrawal fee.

• Find out more:best and worst banks