What’s the deal?
The main attraction of the Tesco Clubcard Credit Card is that it offers 16 months’ interest-free on purchases. Once this time ends you will be charged a representative annual percentage rate (APR) of 16.9% (variable). This is lower than the market-average 17.32% APR, according to Bank of England figures, but bear in mind that, depending on your credit score, this is not necessarily the rate you will be offered.
This card doubles up as a Clubcard whether or not you are shopping at Tesco. When using the card in store (which also includes purchases via the Tesco website) you will earn one point for every £1 spent on the card – and even when you are shopping anywhere else, you will earn one point for every £4 spent on the card.
If you have existing credit card debt, the Tesco Clubcard Credit Card also offers 0% on balance transfers for a period of nine months in return for a 2.9% balance transfer fee.
Holidaymakers will also be pleased to learn that they will not be charged an advance fee or handling fee when buying currency using the card from Tesco Bank.
If you are looking purely for purchases, RBS and NatWest are offering a longer 0% period of 18 months with their YourPoints World MasterCard Special cards. You can also earn points with either card (at a rate of one for every £1 spent), which can be redeemed against a wider range of brands including M&S, Boots, Harvey Nichols and Amazon. And when you take out the card you will receive an initial 2,500 points which you will continue to be paid on the anniversary of that date every year thereafter.
However, when the 18-month interest-free period on purchases ends, the representative APR on these cards kicks in at a higher 17.9% (variable). So, even though you have an extra two months, you will need to be extra sure you are going to clear your balance in this timeframe if you don’t want to be stung. These deals are also only likely to be around for a limited time.
The Amex Platinum cashback purchase card steps into line with Tesco with its identical 16-month 0% purchase period. But this card also offers 1.25% cashback on all spend which could be more appealing to some consumers – especially those who don’t always shop in Tesco.
However, as the card comes with an annual fee of £25, this pushes the representative APR up higher still at 18.5% (variable). Again, if you haven’t cleared your debt when the 16-month 0% period ends you will find it suddenly starting to accrue some hefty interest.
What’s the verdict?
If you are a regular Tesco shopper, want to make a large purchase and can be sure you will clear your balance in the space of 16 months, this is very likely to be the card for you. The offering is near the top of the purchase tables and offers the chance to earn extra Clubcard points and therefore cheaper shopping.
But if you are not so loyal to Tesco, some other credit cards which offer 0% on purchases are probably worth looking at first. As well as the deals we have mentioned, you can look at the wider range of cards on MoneySupermarket’s credit card channel for purchases.
If you want to make purchases on your card but don’t have a timeframe over which you can realistically pay off the debt, have a look at a card that offers just one low rate of interest instead.
Sainsbury’s appropriately-named Low Rate Credit Card for example, offers Nectar card holders a representative APR of just 6.9% (variable) on both purchases and balance transfers. There’s no perks or rewards – but no balance transfer fee either.
Alternatively, Barclaycard Simplicity – as it says on the tin – offers a representative APR of 7.9% (variable), again on both balance transfers and purchases with no balance transfer fee.
Making a large purchase with a 0% purchase credit card doesn’t just mean you can spread the cost of the item without paying interest. You will be offered protection under the Consumer Credit Act.
This protects consumers who are making purchases of between £100 and £30,000, as it states that the lender and the supplier are jointly liable in the event the goods or services are faulty or not delivered. This applies even if just the deposit is made on the card.
Cardholders now also benefit from the Consumer Credit Directive (CCD) which came into effect in February 2011 and offers further protection from £30,000 to £60,260.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.