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?
SPONSORED FEATURES
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 Executive / Foreign Exchange Dealer - OTE £40,000+

    £16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

    SThree: Experienced Recruitment Consultant

    £20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

    Recruitment Genius: Collections Agent

    £14000 - £16000 per annum: Recruitment Genius: This company was established in...

    Day In a Page

    Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

    Cameron lowered the flag for the dead king of Saudi Arabia...

    But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Humanity must be at the heart of politics, says Jeremy Corbyn
    Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

    Joe Biden's 'tease tour'

    Could the US Vice-President be testing the water for a presidential run?
    Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

    Britain's 24-hour culture

    With the 'leisured society' a distant dream we're working longer and less regular hours than ever
    Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

    The addictive nature of Diplomacy

    Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
    Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

    Fashion: Ooh, Lady Chatterley!

    Take inspiration from DH Lawrence's racy tome with equally racy underwear
    8 best children's clocks

    Tick-tock: 8 best children's clocks

    Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
    Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

    Charlie Austin: ‘If the move is not right, I’m not going’

    After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
    Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

    How Isis profits from destruction of antiquities

    Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
    Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

    'If we lose touch we’ll end up with two decades of the Tories'

    In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
    Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

    The Arab Spring reversed

    Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
    King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

    Academic claims King Arthur was real - and reveals where he lived

    Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
    Who is Oliver Bonas and how has he captured middle-class hearts?

    Who is Oliver Bonas?

    It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
    Earth has 'lost more than half its trees' since humans first started cutting them down

    Axe-wielding Man fells half the world’s trees – leaving us just 422 each

    However, the number of trees may be eight times higher than previously thought
    60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

    60 years of Scalextric

    Model cars are now stuffed with as much tech as real ones