Can you earn cheap Avios points buying Tesco Visa gift cards with a £3.95 fee?

I ran an article on 3V Virtual Visa gift cards recently, the first one for a while.  These are the £25 Visa gift cards which you can buy for £25 in Tesco, earning yourself Tesco Clubcard points and generating some American Express spend.  Unfortunately, the uses for 3V cards are now limited as they are no longer accepted for ‘financial’ transactions.

Tesco still sells a different sort of Visa gift card, which carry a fee.  The fee is £2.95 when you buy a £25 card and £3.95 when you buy a £50 card.

Why could buying these cards make sense?

For a surprisingly long time now (over a year) Tesco has been offering 150 bonus Clubcard points when you spend £50 on gift cards in-store.

Here is the Tesco webpage which outlines the deal.

Whilst you do not receive the bonus Clubcard points if you buy Tesco’s own gift cards, all other gift cards qualify – including the Visa ones.

These Visa gift cards come with a huge list of terms, conditions and fees. However, there are only four things you need to know:

A £25 card carries a £2.95 fee, a £50 card carries a £3.95 fee

Tesco limits you to £2,000 of purchases per year (you can get around this relatively easily) and 5 cards per transaction

You need to register the card before you can use it online or by phone, presumably to put a name on file to match up with the card details the retailer enters, but for face to face transactions it can be used immediately. (When you have registered one card, adding additional cards is very quick and painless.)

It is treated as a debit card when you use it

How can I benefit from this?

Let’s assume that you have payments for which debit cards are accepted but credit cards or Amex cards are not.

When you buy a £50 Visa debit card, the maths looks like this:

Fee paid: £3.95

Avios points earned from Tesco: 150 Clubcard points = 360 Avios

Avios points earned with an American Express Gold* = 106 Avios

Total Avios points earned = 466 Avios, or 0.85p per Avios

(* Amex Gold – reviewed here – offers 2 American Express Membership Rewards points per £1 spent in supermarkets for the first year you have the card.  These transfer 1:1 into Avios points.)

0.85p per Avios point is a good but not amazing deal.  It is, of course, far cheaper than buying them directly from British Airways.

You will also get more than 0.85p per point when redeeming, especially if you are using a British Airways American Express 2-4-1 voucher, so you are unlikely to lose money buying these Visa cards.

There is an extra benefit – you can use it to put additional spend through whatever American Express card you use in Tesco, which may help you hit a target for a sign-up bonus or your BA Amex 2-4-1 voucher.

You may be able to buy them below face value for free Avios

Occasionally, Tesco sends out ‘conditional spend’ vouchers in the post or with till receipts.  These are often ‘£5 off £50 spend’ or similar.  Whilst the small print of these vouchers says ‘not valid on gift cards’, it really means ‘not valid on Tesco gift cards’.  The voucher WILL scan at the till if you buy any other gift card.

Some cashiers, not unreasonably, read the small print of the voucher and don’t let you use them.  In these circumstances, the best you can do is to ask them to scan it and see if it works.  To avoid this issue, it is best to buy a few grocery items along with your gift card and put the gift card through first.  The cashier has normally forgotten about it by the time you come to pay.

You would also get an even better deal if you saved the Tesco Clubcard vouchers for an Avios or Virgin Flying Club conversion promotion.  Avios bonuses have been thin on the ground recently but Virgin does offer regular ‘20% bonus’ promotions.

How can I use these Visa cards?

They can be used for all sorts of transactions, including all the companies discussed in my last 3V article.  However, if you are going to use them for one of those companies then you should be buying the 3V cards directly and avoiding the £3.95 fee.

The difference between the fee-charging Visa cards and the ‘no fee’ 3V cards is that you can still use the former for ‘financial’ transactions.

If you pay the Inland Revenue directly, they work just fine – I have done it myself.  You can also pay them into National Savings Direct Saver accounts and they may well work with other bank accounts which accept debit card payments.  Note that there may be a limit to how many different cards you can use per day when paying in.  You cannot do this with 3V Virtual Visa cards now.

If you think that you have an easy way of liquidating these cards, you may find it worth adding a couple to your basket every time you are in a Tesco which stocks them.

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How to earn Avios from UK credit cards (April 2024)

As a reminder, there are various ways of earning Avios points from UK credit cards.  Many cards also have generous sign-up bonuses!

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

There are two official British Airways American Express cards with attractive sign-up bonuses:

You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points. These points convert at 1:1 into Avios.

Run your own business?

We recommend Capital on Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, along with a sign-up bonus worth 10,500 Avios.

SPECIAL OFFER: Until 12th May 2024, the Capital on Tap Business Rewards Visa card is offering a bonus of 30,000 points, convertible into 30,000 Avios. You must have a Limited Company to apply. Click here to learn more and click here to apply.

You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies and has a 30,000 Avios sign-up bonus.

There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.

Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.