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Tesco Foundation Credit Card review 2022
Helping you to improve and rebuild your credit rating while earning you Tesco Clubcard points on day-to-day spending.
- Improve your credit score while earning 1 point per £8 spent on all your day-to-day spending.
- If you carry a balance from month to month, the card’s standard rate will make this a relatively expensive way to borrow.
Representative example: When you spend £1,200 at a purchase rate of 27.542% (variable) p.a., your representative rate is 27.5% APR (variable).
£100
Minimum credit limit
Up to 56 days
Interest-free each billing period
27.5%
Representative APR
£0
Account fee
Details
| Issuer | Tesco Bank |
|---|---|
| Network | Mastercard |
| Annual/monthly fees | £0 |
| Balance transfers | 27.542% |
| Balance transfer fee | 3.99% |
| Purchases | 27.542% |
| Purchases interest-free period | Up to 56 days |
| Money transfers | 39.941% |
| Cash advances | 39.941% |
| Minimum credit limit | £100 |
| Maximum credit limit | Subject to status |
| Additional cards available | 1 |
| Incentive | Collect 1 Tesco Clubcard point per £4 spent (£4 minimum) in Tesco and 1 Clubcard point per £8 spent (£8 minimum) outside Tesco in each purchase transaction. Must have available credit to collect Clubcard points. Clubcard points are turned into Clubcard vouchers every 3 months or sooner using Faster Vouchers. Clubcard vouchers can be used in Tesco or with Clubcard Reward Partners to get even more value on dining out, hotel stays and travel. |
| Additional Rewards Info | Free Tesco Bank CreditView giving 3 years' unlimited access to credit score and report via TransUnion, credit alerts and CreditView report updated every 28 days to monitor changes. |
| Potential costs | ★★★★★ |
| Doing its job | ★★★★★ |
| Extras | ★★★★★ |
| Overall Finder rating | ★★★★★ |
Review by
Chris Lilly
chris.lilly@finder.comChris Lilly is a publisher at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more.
Expert review
If you’ve got poor credit and are hoping to improve it, the Tesco Foundation Card is one of just a handful of “credit building” cards on the market that lets you collect rewards while helping you to improve your credit score.
Technically any credit card, used correctly, can help improve your credit score, but this card offers a number of tools to help you protect and improve your it – like text/email alerts and visibility of your credit report and score – along with advice on some of the key factors affecting it.
Expect to start small with a low, manageable credit limit, but with the promise of regular optional credit limit increases if you manage your account well.
While perks are usually few and far between with this type of card, you’ll be able to collect Tesco Clubcard points on all your day-to-day spending – 1 point per £8 spent (and you’ll collect these at a higher rate when you shop at Tesco – 1.25 points per £1 spent).
Pros and cons
Pros
- Applicants with low credit scores may be eligible
- Customers report excellent customer service when dealing with Tesco Bank
- Earn Clubcard points on day-to-day spending
- No annual fee
Cons
- Relatively high balance transfer fee
- Relatively high money transfer fee
- You may be offered an opening credit limit as low as £100
How does it compare with other credit builders?
Table: sorted by representative APR, promoted deals first
Approval for any credit card will depend on your status. The representative APRs shown represent the interest rate offered to most successful applicants. Depending on your personal circumstances the APR you're offered may be higher, or you may not be offered credit at all. Fees and rates are subject to change without notice. It's always wise to check the terms of any deal before you borrow.
Repayment options
You can make manual repayments through Tesco Bank's app, by logging in to your online banking or over the phone (0345 300 4278). Alternatively, you may wish to set up a direct debit.
A direct debit protects you from forgetting to make a repayment and damaging your credit score – making it harder and more expensive to borrow money in the future – and getting hit with a penalty fee (£12) as a result.
You can arrange a direct debit for repayments when you apply for the credit card. The table below shows the options available.
Choose from the following direct debit options for your monthly repayments:
| Minimum amount | Fixed amount | Fixed percentage | Full amount |
|---|---|---|---|
How to apply
If you've compared cards and settled on the Tesco Bank Foundation Card, completing the secure online application form takes about 15 minutes. Before you apply, check that you meet the eligibility requirements and have the information and documents you'll need to make the process as straightforward as possible.
Frequently asked questions
What credit limit will I get with the Tesco Bank Foundation Card?
If Tesco Bank is able to offer you this deal, the offer will specify a personalised credit limit based on Tesco Bank's assessment of your situation. The minimum limit offered on this card is £100 and Tesco Bank does not specify a maximum. Once you've had the card for a while and shown Tesco Bank that you're reliable, you may wish to apply for a credit limit increase.
Can I withdraw cash using the Tesco Bank Foundation Card?
Although it's possible, withdrawing cash from a credit card account is generally not a good idea, as "cash-like transactions" (such as withdrawing cash at an ATM, getting cashback at the till, spending at a casino or buying currency) often incur steep fees and/or higher rates of interest.
The cash advance fee on the Tesco Bank Foundation Card is 3.99% (min. £3). For example, if you withdraw £50, you'll incur a fee of £3.00. Withdraw £250, and you'll incur a rather painful fee of £9.98.
The interest rate on this part of your balance will be 39.94%, which is 45% more than the standard purchase rate (chargeable from the day of the transaction – the card's usual "up to 56 days interest-free" grace period won't apply).
How much does it cost to use the Tesco Bank Foundation Card abroad?
Non-sterling transactions are subject to a 2.75% charge. For example, if you spend 200 euros (£175.25), it'll cost you around £4.82 in fees.
What is the minimum payment on the Tesco Bank Foundation Card?
Each month you must pay at least 1% of your balance at that point or £25.00 – whichever of the 2 figures is greater. So if you had, say, £2,450.00 outstanding, you'd pay £25.00, and if you had £10,000.00 outstanding, you'd pay £100.00.
Paying only the minimum required amount each month is generally not advisable as it tends to be a very expensive way to borrow money which can lead to persistent debt.
Can I transfer money from the Tesco Bank Foundation Card to a bank account?
Yes. That's what's known as a "money transfer" (rather than a "balance transfer") in credit card jargon. You can arrange this from your online banking or using Tesco Bank's app. This part of your card balance will incur interest of 39.941%. The fee for a money transfer is 3.99%.
Finder credit card ratings
★★★★★ — Excellent
★★★★★ — Good
★★★★★ — Average
★★★★★ — Subpar
★★★★★ — Poor
Our experts score credit builder credit cards to determine their value against similar products on the market. We look at a number of important factors, like interest rates, credit limits, features to help you track your credit, plus the potential costs involved with running the card both in the short and longer term.
You can read more about our scoring criteria on our credit card methodology page.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.