The Tesco Foundation Credit Card can be used for almost any purchases you desire.

You can use it to pay for food if you want, or even for holidays. Many people opt for credit cards due to the convenience they offer. They are small, easy to carry anywhere and most places will accept them.

Another key benefit of using a credit card is in case you find yourself dealing with an emergency and you don’t have any funds.

How do you pay for that broken fridge without any funds readily available? Credit cards are useful for this purpose.

What is the Tesco Foundation Credit Card?

Tesco Bank is a retail bank in the UK that was opened in 1997. The bank offers a credit card with limits between £250 and £1,000.

Customers can also earn Tesco Clubcard points on certain purchased and enjoy 24 hour customer service support.

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Tesco Foundation Credit Card Overview

IssuerTesco Bank
NetworkMastercard
Annual/monthly fees£0
Balance transfers27.542%
Balance transfer fee3.99%
Purchases27.542%
Purchases interest-free periodUp to 56 days
Money transfers39.941%
Cash advances39.941%
Min credit limit£100
Max credit limitSubject to status
Additional cards available1
IncentiveCollect 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.

Tesco Foundation Credit Card Fees and Charges

Annual/monthly fees£0
Minimum monthly payment1% or £25 (whichever is greater) or the total of any interest, default fees and charges plus 1% of the outstanding balance plus any arrears.
Balance transfer fee3.99%
Money transfer fee3.99%
Foreign usage charge (EU)2.75%
Foreign usage charge (rest of world)2.75%
Cash advance fee3.99% (min. £3)
Late payment fee£12
Duplicate statement fee£0
Exceeding limit fee£12
Additional card fee£0
Replacement card fee£0
Dormancy fee£0

Tesco Foundation Credit Card Application Requirements

Minimum Age18
Minimum income£5,000
ResidencyUK residents
AvailabilityAvailable to new customers

Credit Card Tips

We will give you a better understanding of the following:

You need to be able to budget

Credit cards can often feel like you are getting access to ‘free’ money. This is not the case.

If you manage to pay your bills on time and manage your budget, a credit card could be a good idea.

However, if you already know you are bad at budgeting, it may be best to avoid a Credit Card.

You could overspend

It is very easy to overspend with a credit card. If you overspend, you could end up in serious financial trouble.

Will your salary cover the credit card balance

The best way to build up your credit score when using The Tesco Foundation Credit Card is to pay off the balance of the card when it becomes due each money. This is the only way you will improve your credit score with the card.

You can do this easily if your salary allows you to comfortably pay the balance, but if you don’t earn enough, you’ll struggle to clear it and you will end up facing financial difficulties. Always make sure you are spending what you are earning, and not any more than that.

Paying interest on the Tesco Foundation Credit Card

The Tesco Foundation Credit Card, as with any credit card, will charge you interest when you fail to clear the balance.

If you manage the card well, and pay it off at the end of each month, you won’t need to make these payments.

Avoiding debt with the Tesco Foundation Credit Card

It is great to go into getting The Tesco Foundation Credit Card with a view to improve your credit score, and this can be one of the great benefits about the card. After all, a good credit score will help you to secure loans and get better rates on financial products.

Your credit score depends greatly on how you manage all your credit, including bills in your name.

As long as you keep paying your bills on time, you will build you credit score.

If you are also considering taking out a card, these are some ways you can avoid ending up in debt:

  • If you are taking out the The Tesco Foundation Credit Card, don’t take out any others.
  • Pay off the balance in full when it’s due each month, otherwise you will end up having interest payments to make.
  • Don’t take a card out because you like the free offer that comes with it.
  • Don’t use up all of the available credit without good reason.

Considering other options to a credit card

Other options include a prepaid credit card, or debit card. These work in much the same way, but with less risk attached.

Prepaid credit cards

As the name would suggest, a prepaid credit card is a card that already has money on it. You need to put the money in before you can use it, so it doesn’t have the same risks as credit cards, and you also don’t have any bills to pay.

Some of the benefits of prepaid credit cards:

  • You can start building your credit with this card
  • It can help ensure you stick to a budget
  • Light and compact to carry around with you
  • Safer than using cash
  • Easy to keep track of spending

You have much more safety and security with a prepaid card. If you are worried about anyone running up a bill on your credit card, or stealing your cash, you can avoid this with a prepaid card.

Debit card is another option

If you have a bank account, you have a debit card. This links to your account, so you can’t spend any cash unless it’s in your bank account. This means that you can’t overspend. If you are in the habit of overspending, it is worth considering this instead.

Debit cards can be useful if you want to keep track of your spending and stick to a budget. You don’t need to be concerned about a bill coming through or clearing a balance, as you can only spend the money you have available. It is basically, risk-free!

Improving your credit score without a credit card

It is not necessary to take out a credit card, just for the purpose of improving your credit score. It can be a quicker and easier way to do it, if you manage the card well, but it is certainly not the only option you have at your disposal.

Your credit score naturally rises when you pay your bills, as long as they are in your name. The more often you pay bills on time, the quicker your credit score rises.

References

CONC 13.1 Application

CONC 2.1 Application

CONC 5.2A Creditworthiness assessment

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About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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