Tesco's Clubcard Pay+ prepaid card gives points on spending - here's who should get it

The banking arm of the supermarket giant launched the card on 18 March 2021 initially to a limited number of customers. Since then almost 45,000 cards have been taken out, and from 10 January all Tesco Clubcard holders who are UK residents and aged 18 or over can now sign up.

Below we explain how it works and who it's best for. For more Clubcard tips and tricks, see our Loyalty Points Boosting guide.

How does Clubcard Pay+ work?

Firstly, Clubcard Pay+ is a debit card, not a full bank account. The card acts like a prepaid card, in that you load funds on it, and can only spend what you have. Here are the key need-to-knows (for a full breakdown of how it works, see our article published when Clubcard Pay+ was trialled): 

• You can top up using any UK bank account and then use the card to shop in-store and online. Clubcard Pay comes with a contactless Visa debit card. You can add money to it from your existing bank account using Tesco Bank's mobile banking app and can then use it like any other card to pay in-store and online.

• You can collect Clubcard points on your spending at Tesco and elsewhere. The Clubcard Pay+ debit card acts just like your Clubcard, so you don't need to swipe both at Tesco tills. You'll get two points for every £1 spent in Tesco in the first 100 days after opening your account and then one point per £1 after, which is the same as with a regular Clubcard. You'll also collect one Clubcard point for every £8 you spend elsewhere – the same as with a Tesco Bank credit card (see below for more on this).

• It comes with a 'round ups' feature and savings account, which pays 0.25% AER variable interest. When you spend, your transactions will be rounded up to the nearest pound, with the difference going into a 'Round Up' savings account (this is opened for you automatically when you sign up to Clubcard Pay+), though you can opt out within the app's settings. You get up to £85,000 savings safety protection on the funds you hold in the Clubcard Pay+ and Round Up accounts. 

• It doesn't have an overdraft. In the event your balance goes below zero, you'll need to top up your account immediately – otherwise you could face your account being suspended or even closed. But you won't be charged any fees in this scenario. You also can't switch to Clubcard Pay+ using the Current Account Switching Service or pay out direct debits from it. 

• You won't be credit checked. While Tesco Bank will do a soft credit search to confirm your identity, as it's effectively a prepaid card that doesn't allow borrowing, this isn't to check your ability to repay. Plus, the check won't appear to other lenders, so won't affect your creditworthiness, even if you're rejected. 

Most of its headline features can be beaten

Clubcard Pay+'s major features can be beaten by opening a new bank account or taking out a new credit card:

• The Round Up account's 0.25% interest rate is easily beaten. The top easy-access savings accounts currently pay up to 0.7%. Yet if it's the ease of round-ups that tempts you, many banks offer this. Bank of Scotland, Halifax and Lloyds Bank, for example, pay interest at the rate of the savings account you round up into, while you can earn 5% with Chase Bank and up to 0.93% with Monzo. See our Digital Banking guide for more.

• The account's effective cashback rate can also be trounced. Clubcard Pay+ has an effective standard 'cashback' rate of 1% at Tesco (2% for the first three months) and 0.125% on spending elsewhere - though do note returns come as Clubcard Vouchers (see our Loyalty Points Boosting guide for how to make the most of these).

  But the Amex Platinum Cashback Everyday card currently gives newbies 5% cashback for the first three months then tiered cashback up to 1% on all spending, for example - or Chase Bank's debit card pays 1% for the first year. See our Credit Card Rewards guide for full details and our top picks.

Yet, not all features can be beaten, especially by a prepaid card:

• You can earn double Clubcard points at Tesco for three months, then it matches your Clubcard. If it's specifically Clubcard points you want, this card does beat a standard Clubcard. You get double points for three months, then the same rewards as your Clubcard at Tesco, with the added bonus of being able to use the card elsewhere.

  While Tesco Bank's own credit card beats the points rewards available with the Clubcard Pay+, it's unusual for a prepaid card to offer these types of rewards. See our Prepaid Cards guide for full details.

It's best for those who want to budget tightly or want to maximise rewards but can't get, or don't want a credit card

While many of its features can be beaten, it's rare for what is effectively a prepaid card to offer these sorts of rewards. Tesco's Clubcard Pay+ card is likely best for:  

• Those who want to keep tight track of their spending. As it's a debit card you need to top up, and doesn't have an overdraft, you can only spend what you've transferred onto the card. So it's helpful if you're budgeting tightly.

• Those who want to max Clubcard points on spending but can’t get/don’t want a credit card. While the cashback and savings rates this card offers can be beaten, you'll need to open a new credit card or bank account to do so.

  If that's not what you want to do, or your credit record isn't good enough to be able to, this 'prepaid card' is much more likely to accept you, and does give some of the best rewards we've seen when compared to other prepaid cards.