Tesco Bank

Tesco Bank is the banking arm of the Tesco group, best known for tying its money products into Clubcard, the supermarket's loyalty scheme. Its banking business has now transferred to Barclays, but the brand lives on: Barclays states it will continue to use the Tesco Bank brand on all existing Tesco Bank banking products through a long-term strategic partnership with Tesco¹. In practice, that means the accounts, the app and the logins carry on as before, while the bank behind them has changed².

The brand sells personal loans, savings accounts, cash ISAs and credit cards, and it reports around 3.7 million banking accounts across its savings, credit card and current account products, plus 470,000 loan products³. Its credit cards are Clubcard Credit Cards, which let customers collect Clubcard points, spread the cost of larger purchases and build a credit history⁴. Its loans are unsecured personal loans, not secured on your home, car or other assets⁵.

What Tesco Bank offers: credit cards, savings and personal loans

Tesco Bank's range is deliberately narrow: it sells credit cards, savings accounts, cash ISAs and personal loans, rather than the full spread of a high street bank. On the credit card side, its Clubcard Credit Cards are built around the supermarket's loyalty scheme: cardholders can collect Clubcard points on spending, spread the cost of larger purchases and use the card to help build a credit history⁴. One named card in the range, the Tesco Bank Longer Balance Transfer, is covered in detail on its own page, including its fees and how Clubcard points work: Tesco Bank Longer Balance Transfer.

On savings, the range splits into flexible and fixed accounts. The Internet Saver is the flexible option, managed entirely through the Mobile App or Online Banking⁶. The Fixed Rate Saver pays interest for a set term, with a choice of annual or monthly interest⁸. The ISA range has two cash products: an Instant Access Cash ISA, which you can apply for online and over the phone⁹, and a Fixed Rate Cash ISA, which requires a Linked Account in your own name¹⁰.

The loan range is the brand's biggest product family. Tesco Bank offers unsecured personal loans from £3,000 to £35,000⁵, sold under labels that reflect how people use them: small loans, large loans, long term loans, a car loan, a holiday loan, a home improvement loan, a debt consolidation loan and a joint loan⁵. Clubcard members get a better rate on large loans if they are accepted¹³. Because every loan is unsecured, none of them is secured on your home, car or other assets⁵.

Credit card persistent debt: what happens at 18, 27 and 36 months

Persistent debt is the position where, over a sustained period, you are paying more in interest and charges than you are repaying off your credit card balance. Rules require card firms to intervene rather than let a balance sit indefinitely, and Tesco Bank's summary box sets out its power plainly:

That means the minimum you are asked to pay each month is not fixed: if your account looks likely to fall into persistent debt, Tesco Bank can raise the minimum payment so that you are clearing more of the balance. The intervention follows a timeline. At 18 months you are contacted and told the account is in persistent debt, with suggestions for steps to take. At 27 months the account is reviewed again and you are contacted if it is still in persistent debt. At 36 months, if the account has been in persistent debt throughout, options are set out for becoming debt free and the card can be suspended.

If you are struggling with card debt, free help is available from MoneyHelper and from debt advice charities, and the options are set out in the site's guide to debt.

Tesco Bank savings: how interest is calculated, paid and taxed

Tesco Bank's savings accounts earn interest at a daily rate, and when it is paid depends on the account. On the Internet Saver, interest is earned daily and paid into the account on the anniversary of the account opening and at account closure⁶. The Fixed Rate Cash ISA works the same way: interest is earned at a daily rate and paid annually on the anniversary of opening and at closure¹⁰. The Fixed Rate Saver gives a choice of annual or monthly interest, so you can take an income rather than wait for the term to end⁸.

Tax is not deducted at source. Tesco Bank states:

How the Personal Savings Allowance works, and how it differs for basic and higher rate taxpayers, is explained in the guide to personal tax. Interest earned inside a cash ISA is treated differently, which is the main reason to use the ISA wrapper rather than an ordinary savings account; the rules are set out in the guide to ISAs.

Moving a cash ISA to Tesco Bank is a transfer process, not a withdrawal. You open a new ISA online or contact Tesco Bank and request a transfer during the application, then return the ISA Transfer Form sent in your Welcome Pack¹⁷. Tesco Bank contacts your existing provider within 5 business days of receiving the form, your provider then has 5 business days from receiving the request, and the transfer should be completed within 15 business days of Tesco Bank receiving the form¹⁷. Withdrawing the money yourself instead of transferring it can lose the tax wrapper, so the transfer route matters.

Two ISA rules are worth knowing. A Fixed Rate Cash ISA can accept a transfer from another provider, but the transfer must be completed within the first 30 days of the account opening¹⁰. And an Instant Access Cash ISA can be changed to a Fixed Rate Cash ISA with a new 12 month rate by contacting Tesco Bank, with no need to open a new account; deposits from previous tax years do not count towards this year's ISA limit¹⁷. The Instant Access Cash ISA can also be moved to a new ISA with Tesco Bank at any time without fees⁹.

Tesco Bank personal loans: how borrowing and repayment work

Tesco Bank personal loans are unsecured, which means the debt is not tied to your home, car or other assets⁵. Amounts run from £3,000 to £35,000⁵, and the repayment terms on offer depend on the amount and the purpose of the loan: the general range is 12 to 120 months, described on its pages as terms of 1 to 10 years¹⁸. Larger amounts tend to come with the longer terms: a £20,000 loan can be repaid over up to 10 years, while a £30,000 loan is offered with terms of up to 7 years¹⁸.

How the interest is charged is worth understanding before you borrow. Tesco Bank works out the interest you will pay over the whole length of the loan at the beginning and adds it to the loan amount; a monthly rate based on the APR is then applied to the balance as it is reduced by your monthly repayments¹⁹. Your monthly payment is therefore fixed, and the total you repay is known from the start.

The first payment is normally taken one month after you get the loan⁵. Some applicants can instead apply for a 2-month payment break at the start, if eligible¹². If the application for the break is successful, the first payment is taken in the third month after the issue of the loan, but interest is charged during the break and the overall loan period is extended by 2 months, which means paying 2 extra months of interest¹². The break is only available at the start of the loan, not part way through¹⁸. The same terms apply across the range, from small loans and car loans to holiday loans, home improvement loans and joint loans²⁰.

Loan fees and charges: late payments, defaults and settling early

Tesco Bank's loan charges are few but firm. If a loan payment is late, the bank charges £12 each time, and a further £12 is charged when a default notice is issued¹¹. The same £12 late payment fee appears across the range, from small loans to large loans, long term loans, home improvement loans, debt consolidation loans and joint loans¹¹. The credit card summary box sets a late payment fee of £12.00 as well¹⁴. Today's figures are always on Tesco Bank's own site, and the fee levels described here are those it currently publishes.

Settling a loan early is allowed, and it can save you money overall, but it is not free. Tesco Bank charges a fee of up to 2 months' interest if you choose to settle your loan early, though the total amount you repay may still include an interest saving because you are not paying interest for the remaining term¹⁹. There is no charge for reducing the loan term through overpayment, so paying extra each month is treated differently from clearing the whole balance in one go²⁴.

If you are struggling to keep up payments, the worst option is to drift. Late fees of £12 per missed payment stack up, and a default notice carries its own charge and a mark on your credit file that affects future borrowing, as explained in the guide to credit scores. Free help with problem debt is available from MoneyHelper and debt advice charities, and the options, from repayment plans to formal debt solutions, are set out in the guide to debt.

Who can apply and how credit checks work

Every Tesco Bank loan application involves a credit check. Tesco Bank carries out a credit reference search when you apply and calculates a credit score from the information you enter and your credit reference file, which helps it decide whether to lend⁵. The same applies to the car loan: a credit check is done when you apply²¹.

Before applying, there is a way to test the water without damage. Tesco Bank's eligibility checker runs a soft search on your file, which does not affect your credit rating, and shows how likely the bank is to give you a loan⁵. A full application, by contrast, involves the hard search described above, which is visible to other lenders. How searches affect your file is explained in the guide to credit scores.

Acceptance is never guaranteed, and the published loan ranges are what you can apply for, not what you will be offered. The rate you are offered depends on your circumstances, and Clubcard members get a better rate on large loans if they are accepted¹³. If your credit history is thin or damaged, a soft search through the eligibility checker is the low-risk way to find out where you stand before committing to a full application.

Banking with Tesco Bank online and in the Mobile Banking App

Tesco Bank has no branches, so day-to-day banking happens in its Mobile Banking App or through Online Banking. The app is free to download from the App Store or Google Play Store and runs on Apple and Android mobile devices; it does not currently support any other mobile platforms or tablets⁷. Tesco Bank says 2.4 million customers manage their money with it⁵. If you cannot upgrade your device to run the app, you can still manage your accounts on a phone, tablet or desktop computer using Online Banking⁷. The app is only distributed from the Google Play Store or the App Store, so copies elsewhere may not be genuine²⁶.

If you already use Online Banking, you log in to the app with your existing username and password²⁵. Moving to a new phone is done with the New Device Transfer feature, which needs your old phone, your new phone and your Online Banking password⁷. One rule governs what you can see: an account must be in your name to appear in the app, and for joint savings or loan accounts each holder needs their own device and individual login details. Only the primary cardholder can view a credit card account²⁴.

For loans, the app shows your balance and remaining term, your next payment date, and lets you make an additional payment or see how much it would cost to pay off the loan early²⁷. You can view loan statements from the last 5 years and see all payments since the account opened²⁰. Credit card customers can set up account notifications for different types of transaction⁷. Loan payments themselves can be made by bank transfer, through a loan payment portal, by standing order or by cheque²⁸, and credit card payments can be made four ways in the app, including Pay by Bank and setting up a Direct Debit²⁴.

Tesco Bank is now part of Barclays: what changes for customers

Tesco Bank's banking business has transferred to Barclays². For customers, the practical changes are small: the products, the app, the logins and the Tesco Bank name all continue, because Barclays states it will keep using the Tesco Bank brand on all existing Tesco Bank banking products through a long-term strategic partnership with Tesco¹. Accounts do not need to be moved or reopened.

The change that does matter is protection. Because Tesco Bank and Barclays now sit under the same banking arrangement, the two brands' deposits count together for FSCS purposes, as the section below explains. If you hold savings with both brands, that is the one thing to check.

Scams and fraud: what Tesco Bank will never ask you

Tesco Bank publishes a clear list of things it will never do, and knowing it is one of the best defences against fraudsters who impersonate banks. Tesco Bank states:

The full list of commitments is longer. Tesco Bank will never ask for remote access to your computer, will not ask you to log in to reset security, and will never send an alert that requests your security details²⁹. It will never contact you out of the blue and ask you to send money to another account, and will never ask you to log into Online Banking via a link in an email or text message²⁶. It will never ask for your full 6-digit PIN by phone or online, never call to ask for your full 6-digit one-time pass code, and never call to ask for a one-time passcode sent by text to approve a payment online²⁶. Once you have registered, the bank will never ask for all your security details when it contacts you³¹.

If someone does any of these things claiming to be Tesco Bank, it is not Tesco Bank: the bank's own commitments rule out every one of these requests. On online shopping, Tesco Bank's guidance is direct: avoid paying by bank transfer, because this payment type cannot be recalled if there is an error, which puts it at a higher risk of fraud³². Warning signs of a scam website include missing customer service information such as a phone number, address or social media presence³². Tesco Bank states that you will never be asked for your security details or your PIN by online retailers, and that they should never be disclosed, even to the police or another security agency³¹. The wider picture is in the guide to scams and fraud.

Power of attorney, bereavement and managing someone else's account

There are times when someone else has to deal with a person's Tesco Bank accounts, and the bank has set processes for the two most common situations.

If someone has died, Tesco Bank can only take notification from the next of kin, or a solicitor acting on their behalf³³. The bereavement team will ask for documents, and what is needed depends on the accounts. A copy of the Will is required, and for sole name accounts with a total value of more than £50,000, the Grant of Probate, Letters of Administration or Certificate of Confirmation is also needed³³. The Certificate of Confirmation is the Scottish equivalent of probate, so the document you are asked for depends on where the person lived.

For someone who is still alive but cannot manage their own money, a power of attorney lets a nominated person act on their behalf. Tesco Bank's app has a strict visibility rule that matters here: an account must be in your name to be viewed in the Mobile Banking App⁷, so an attorney manages the account through the channels Tesco Bank provides for third-party authority rather than through their own app login. If you think your security details have been compromised while managing an account, contact Tesco Bank immediately and change the details³¹.

Contacting Tesco Bank and making a complaint

Tesco Bank is an online and phone bank, so contact is through its website, its app or by phone, with Online Banking and the Mobile App as the main routes for everyday queries²⁵. For loans specifically, you can check your balance by logging in to Online Banking or the Mobile App, or by calling²⁸. Other ways to bank, including by phone and post, are set out on the bank's own site³⁴.

If something goes wrong, you have the right to complain, first to Tesco Bank and then, if you are not satisfied, to the Financial Ombudsman Service. Tesco Bank publishes complaints data covering the Tesco Bank brand, which reports 3.7 million banking accounts across savings, credit card and current account products and 470,000 loan products³. How the complaints process works, what the ombudsman can order and the deadlines involved are explained in the guide to consumer protection.

FSCS protection: shared with Barclays brands

Money held with Tesco Bank is protected by the Financial Services Compensation Scheme. Eligible deposits are protected up to a total of £120,000 by the FSCS⁶. Because Tesco Bank now sits alongside Barclays, that limit is shared. Tesco Bank states that the limit is applied to the total of any deposits you hold with Barclays, Barclays Business Banking, Barclays Premier Banking, Barclays Wealth Management and Tesco Bank⁶, and that any total deposits you hold above the limit between these brands are unlikely to be covered⁴. Which? puts the same point simply:

So two balances that each look modest can together break the limit, and the amount above £120,000 is unprotected. The FSCS's own guidance shows how spreading money across banks that sit under separate arrangements protects larger sums, giving the example of £120,000 in one bank being fully protected³⁶. You can check which arrangements your money sits under using the FSCS protection checker³⁶. The bank behind Tesco Bank is on the Bank of England's Prudential Regulation Authority list of UK banks authorised to accept deposits³⁷, and the company behind it, company number 09740322, is active³⁸. How the FSCS works, and what happens when a bank fails, is covered in the guide to consumer protection.