Tesco has now rolled out its new membership programme, named Clubcard Pay+, to all 20 million Tesco Clubcard customers.
The prepaid card, which is aimed at helping shoppers manage their budgets and delivering extra rewards when they shop with the supermarket, was previously only available to a small number of customers on a trial basis.
But is it any good? Let’s take a closer look at how Tesco Clubcard Pay+ works and whether you could benefit.
What is Clubcard Pay+?
Clubcard Pay+ is a new type of prepaid debit card from Tesco Bank.
Importantly, it isn’t a regular bank account: you load money onto your Clubcard Pay+ account through the Tesco Bank mobile app, and then use that money when buying your groceries.
Prepaid cards can be a fantastic option if you need a little help with budgeting.
That’s because you can only spend the money that’s been loaded onto the card ‒ there’s no overdraft facility there, so no risk of dropping into the red and incurring additional charges.
Get saving with Round Up
Importantly, all Clubcard Pay+ accounts come with the 'Round Up' facility automatically added.
As the name suggests, it rounds up your purchases to the nearest pound, with the change then saved in a dedicated savings account.
The idea is that this will help people get into the habit of building up a savings pot without having to do anything, and without really noticing the money going into that pot.
However, if you really don’t want to take advantage of this facility, you can turn it off within the app.
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Earning Clubcard points on your spending
One of the big selling points of Clubcard Pay+ is of course the ability to earn Clubcard points as and when you spend.
What’s more, you can earn those points no matter where you do that spending, whether it’s in a Tesco store or at another retailer.
As a result, you’ll get one point for every £1 you spend with Tesco, and a point for every £8 spent elsewhere.
What’s more, new cardholders can double their Clubcard rate when spending with Tesco for the first 100 days. Over this period, you get an extra point for every £1 spent in-store or online with the supermarket.
Your Clubcard Pay+ card acts as your actual Clubcard, so there’s no need to carry an additional card around with you.
If you already have a Clubcard account then you can link it with your Clubcard Pay account.
Does Clubcard Pay+ charge any fees?
You won't be hit with any fees for spending in the UK. If, for some reason, you were to use the card abroad you'll be hit with a 2.75% charge for any transactions outside the UK.
How do I apply for Clubcard Pay+?
Clubcard Pay+ is open to anyone over the age of 18 who is a Clubcard member. The application is online ‒ you need to be logged into your Clubcard account in order to apply for Clubcard Pay+.
Clubcard Pay+ is a new type of prepaid debit card from Tesco Bank.
Importantly, it isn’t a regular bank account: you load money onto your Clubcard Pay+ account through the Tesco Bank mobile app, and then use that money when buying your groceries.
Prepaid cards can be a fantastic option if you need a little help with budgeting.
That’s because you can only spend the money that’s been loaded onto the card ‒ there’s no overdraft facility there, so no risk of dropping into the red and incurring additional charges.
What about my direct debits?
It’s important not to think of Clubcard Pay+ as being a bank account, as that’s not how it works.
While you can use your prepaid card when you shop, it’s not an account that you can set up direct debits with as you might a normal bank account.
As a result, Clubcard Pay+ is an account you’ll have alongside your main bank account, rather than a replacement for it.
Is Clubcard Pay+ any good?
Ultimately, how good Clubcard Pay+ is will depend on what your habits are like as a shopper.
There’s no question that a prepaid card can be a terrific tool for people looking to keep a tight rein on their budgets, as you can only spend the money loaded onto the account. There’s simply no chance of going overboard and spending more than you can afford.
So if you’re trying to keep your spending under control, and are a regular Tesco shopper, then this could prove a great option, particularly if you don’t want to go down the route of taking out a Tesco credit card. You get something back when you spend, which you can then cash in with Tesco itself or partner retailers.
There’s also the Round Up service, which will help people to start putting money aside regularly, and likely without even noticing it’s gone.
Given the Round Up account only pays 0.1% interest, the money you’re saving isn’t going to be generating an enormous return but it’s a start at least.
According to Tesco, since the phased launch of Clubcard Pay+, account holders have collectively saved more than £213,000 into their accounts. Given 45,000 accounts were opened over this period, that works out at less than £5 each.
However, if you are only an occasional Tesco shopper then this scheme isn’t going to make an enormous difference to your bank balance.
Similarly, if you aren’t so worried about budgeting then going for some sort of rewards credit card, whether that’s pure cashback or a scheme allied to your chosen reward scheme, may be more convenient since you don’t have to load money onto those accounts before being able to spend.
Read our roundup of the best reward credit cards here, and the top cashback credit cards here.