Money Insider: Tesco Bank plays shopper loyalty card

 

After months of waiting and speculation, Tesco Bank finally launched its current account this week.

The UK's biggest supermarket bank is using a two-pronged customer recruitment strategy, consisting of credit interest and loyalty rewards.

In a market that has become increasingly competitive this year following moves from TSB, Lloyds Bank and M&S Bank, Tesco is the latest challenger attempting to lure customers from the clutches of the high street institutions.

It will pay 3 per cent interest on credit balances up to £3,000, and it's not a 12-month promotional deal, so anyone keeping the maximum £3,000 in their account all year will pocket £72 in interest – once the taxman has had his 20 per cent.

If earning money on your bank account is your key criterion then for those with a balance of £3,000 or less it compares well with Halifax Reward, Santander 123 and Lloyds Bank (Club Lloyds) but is less generous than TSB which pays 5 per cent on the first £2,000 on its recently revamped Classic Plus account.

Spending on the Tesco Bank debit card enables you to earn one reward point per £4 spent in store and one per £8 elsewhere: not over-generous but a useful points enhancer for Tesco shoppers who can already earn one point per £1 spent with Tesco.

You don't have to switch any direct debits across to qualify for this account but you must pay in a minimum of £750 a month if you want to avoid charges, otherwise a £5 monthly fee is payable.

For overdrafts Tesco Bank will charge 18.9 per cent AER for both authorised and unauthorised borrowing. The rate is reasonable when compared with its peers and a cheaper option than banks charging fees of 50p to £1 a day, which can prove very costly for people borrowing only a couple of hundred pounds.

Those needing to pay in cash or cheques can use one of 300-plus Tesco stores across the UK.

Digital pocket money

Laptops and smartphones play an integral part of daily life for many families, and whether it's work or leisure, new technology has made many tasks easier and quicker to complete.

With so many financial transactions now virtual and carried out without resort to notes and coins, it's no surprise that 21st century gadgets are also having an impact on traditional family tasks such as dishing out pocket money.

One of the better recent examples of "cash-free" pocket money is goHenry (gohenry.co.uk) a modern-day money management and education tool for families.

goHenry enables your children to earn, save and spend and teaches them to appreciate the value of money. It comes with a secure pre-paid debit card with parental controls.

At the same time it allows parents to monitor and control their children's spending via a few taps on their smartphone or laptop. It is aimed at children aged between eight and 18 and is a simple way to educate children on how to manage their own money.

Parents set rules and limits, can allocate pocket money automatically or set tasks allowing their children to earn extra cash.

Both parent and child can see their earning, spending and saving online, while the prepaid card won't let your children get into debt.

You can try goHenry free for the first month and after that it costs £1.97 per month per child, which sounds a small price to pay if you can dish out the weekly pocket money and keep tabs on it at the touch of a button.

Andrew Hagger is an independent personal finance analyst from www.moneycomms.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Sales Assistant / Buyer

    £15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

    Recruitment Genius: Compliance Manager

    £40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

    Day In a Page

    Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

    Is this the future of flying?

    Battery-powered planes made of plastic, and without flight decks
    Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

    Isis are barbarians

    but the Caliphate is an ancient Muslim ideal
    The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

    Curse of Brink's Mat strikes again

    Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
    Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

    'The ministers talk to us about miracles'

    Why Greeks are cynical ahead of the bailout referendum
    Call of the wild: How science is learning to decode the way animals communicate

    Call of the wild

    How science is learning to decode the way animals communicate
    Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

    'The economic collapse has happened. What is at risk now is democracy...'

    If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
    The science of swearing: What lies behind the use of four-letter words?

    The science of swearing

    What lies behind the use of four-letter words?
    The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

    The Real Stories of Migrant Britain

    Clive fled from Zimbabwe - now it won’t have him back
    Africa on the menu: Three foodie friends want to popularise dishes from the continent

    Africa on the menu

    Three foodie friends want to popularise dishes from the hot new continent
    Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

    Who will fill Donna Karan's boots?

    The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
    10 best statement lightbulbs

    10 best statement lightbulbs

    Dare to bare with some out-of-the-ordinary illumination
    Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

    Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

    Briton pumped up for dream meeting with world No 1
    Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

    Nick Bollettieri's Wimbledon Files

    It's time for big John Isner to produce the goods to go with his thumping serve
    Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

    Dustin Brown

    Who is the German player that knocked Nadal out of Wimbeldon 2015?
    Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

    Damien Martyn: 'England are fired up again, just like in 2005...'

    Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test